When is an investment bank job?
The average investment banker is now earning more than $100,000 annually.
But that is just the tip of the iceberg.
When you start looking at what the average investment banking job pays, the picture starts to change.
Investment banking is a very lucrative job, but the paychecks aren’t as great as they used to be.
“It is very rare that a investment banker will be making more than $150,000 per year,” says John F. Kennedy, president of Fidelity Investments, which owns more than 30,000 investment banks and invests in more than 1,300.
The average annual compensation for a financial analyst is $110,000, which includes bonuses, stock options and other compensation.
A financial analyst also receives a bonus if they’re paid more than 5% of their annual compensation, which Fidelity defines as an “above average” performance.
“When you’re working on the investment side of the bank, you’re really spending time in the financial market,” Kennedy says.
The top investment bankers earn $200,000 and over.
“The investment bankers have been earning the lion’s share of the money,” Kennedy adds.
The pay is often in the mid-to-high hundreds of thousands per year.
But when it comes to making a career out of investing, the average financial analyst still gets paid a salary below what investment bankers once made.
According to Fidelity, the median annual compensation of an investment banking analyst was $125,000 in 2016.
The median investment banker’s annual salary has risen steadily for decades.
The first financial analyst to receive a bonus in the U.S. was Arthur E. Smith in 1946.
In 1950, Smith earned a $100 bonus, which was more than five times what investment banking analysts earned in today’s dollars.
The next year, the bonus was increased to $200.
By the mid 1950s, investment bankers earned nearly $400,000.
In 1954, the pay was increased from $100 to $175.
By 1955, the top investment banker earned more than twice as much as his investment bankers.
In the early 1980s, the compensation of investment bankers was capped at $75,000 for financial analysts, $90,000 as of the beginning of 2016, and $100 per year in bonuses.
The cap was lifted in 1992, and the pay for investment bankers has remained fairly steady ever since.
Since 2007, the federal government has cut retirement benefits for investment banks, and since 2012, the number of financial analysts has dropped by more than 70%.
For some investors, retirement savings might be the reason investment bankers haven’t had a big payday.
The financial industry has been plagued by a large number of high-profile financial crisis-related losses, and retirement accounts have become a popular way to save for retirement.
The Securities and Exchange Commission (SEC) says that in 2014, 3.7 million 401(k) plans and 457 plans had less than $1 million in assets, and 3.6 million had more than that amount.
The majority of people who invest their retirement savings into an investment account don’t realize the impact it can have on their financial future.
“A 401(K) is a really good way to protect your money, because it gives you the flexibility to invest the money that you don’t need and you’re able to make more money,” says Scott Bresnahan, a financial planner and senior adviser at PNC Financial Services Group.
“But a 401(M) is the most convenient way to get your money out of the system.”