Senior investment analyst is a coveted career path in the investment industry. As an entry level position, it offers new graduates and young professionals valuable opportunities to learn about financial analysis, modeling, valuation and more. Though compensation varies across firms and sectors, this role provides a solid foundation for future advancement. By understanding the career progression, required skills and compensation benchmarks, new entrants can set appropriate expectations and maximize long-term success.
Investment analyst career progression usually starts from junior level
Most investment firms have structured career ladders for analysts. Positions like investment banking analyst or private equity analyst are typical entry points for undergraduate and MBA students. Initial titles are junior analyst or associate for 1-3 years. After gaining foundational financial modeling, valuation and sector knowledge, they may be promoted to senior analyst. Some may leave after several years for business school, while others continue advancing to portfolio manager or other leadership roles. The junior period is key for developing hard and soft skills needed for investment analysis.
Core technical abilities like financial modeling are must-haves for entry level investment analysts
While each investment role has unique requirements, some core technical skills are universal for those starting out. Excel modeling is perhaps most vital, as analysts build complex financial models of companies based on historical performance and projections. Additional important capabilities include financial statement analysis, valuation using multiples or DCF, writing research reports, investment memos and presentations. Soft skills like communication, collaboration and attention to detail enable analysts to work effectively with colleagues and clients. Leadership potential is also evaluated for advancement.
Base compensation for entry level investment analyst positions averages $65K-$75K
According to industry compensation surveys, base salaries for first year analysts generally range from $65,000-$75,000. Junior analysts in top investment banks can earn $85K+, with lower base pay at smaller buy-side firms. Bonuses average 20-50% of base compensation. Total first year all-in compensation thus spans $80K-$120K. Geographic location also impacts pay, with New York City and San Francisco at the high end. As analysts gain experience, base salaries incrementally increase, with total compensation rising more significantly through bonuses and profit sharing.
Significant pay growth occurs as investment analysts are promoted to senior roles
The career trajectory for successful analysts includes promotion to senior analyst, then to portfolio manager or fund manager over time. As analysts advance, they gain autonomy over larger portfolios and investment decisions. With greater responsibility comes substantially higher compensation potential. Senior investment analysts can earn $150K-$250K all-in, with portfolio managers averaging $200K-$500K. Top-tier fund managers take home multi-million dollar pay packages. The long-term earnings upside makes the junior years an attractive dues-paying period for those seeking high careers in investment management.
In summary, junior investment analyst positions offer new entrants to the field a promising start, with strong pay growth over time as they progress up the career ladder. Gaining financial modeling, valuation and communication skills early on establishes a solid foundation for future advancement and reward.