Finding accurate data on financial modeling analyst salaries can be challenging.
In this post, we'll walk through comprehensive research on financial modeling pay, including key factors impacting earnings potential.
You'll see national salary ranges, understand how education and experience influence pay, and learn which industries and regions offer the highest financial modeling wages. You'll leave better informed on reasonable pay expectations as an aspiring or current modeling analyst.
Introduction to Financial Modeling Analyst Salaries
Financial modeling analysts are financial professionals who build financial models to analyze data and forecast business performance. Their models help quantify the potential impact of various business decisions. Understanding the factors that impact financial modeling analyst salaries can help those considering this career path.
Defining the Role of a Financial Modeling Analyst
Financial modeling analysts are responsible for designing and building financial models using Excel or other software to analyze a company's past performance and predict future financial scenarios. Common job duties include:
- Collecting and organizing financial data from company reports
- Designing spreadsheets and models to analyze data
- Testing models to ensure accuracy and functionality
- Presenting findings to management to inform business decisions
- Continuously updating models with new data
The role requires strong analytical abilities, financial acumen, and advanced Excel skills.
Core Job Responsibilities
As outlined above, key duties include data analysis, model building, testing, presenting results, and updating existing models. Specifically, financial modeling analysts will:
- Compile historical financial data
- Identify key assumptions and drivers
- Design models calculating revenues, expenses, cash flows
- Run scenarios and sensitivity analyses
- Backtest models with new operating data
- Summarize findings for management
This requires expertise in accounting, finance, spreadsheet software, data analysis, and financial modeling best practices.
Skills and Qualifications
Most employer job listings require:
- Bachelor's degree in finance, accounting, economics
- Proven experience building financial models
- Advanced Microsoft Excel skills
- Strong analytical and critical thinking abilities
- Attention to detail and data accuracy
- Ability to translate complex financial information
Relevant certifications like the CFA or CPA further strengthen qualifications.
Key Factors Impacting Financial Modeling Salaries
Financial modeling salaries can vary significantly based on several key factors. These include:
Impact of Education and Certifications
Individuals with advanced degrees in finance or accounting generally earn higher salaries for financial modeling roles. Common credentials that boost pay include:
- CFA (Chartered Financial Analyst)
- CPA (Certified Public Accountant)
- FRM (Financial Risk Manager)
Ongoing training and certifications also lead to pay increases over time.
Value of Industry Experience
The more financial modeling experience and exposure to different industries an individual has, the higher their compensation tends to be. Specific industries with high demand for experienced financial modelers right now include:
- Investment banking
- Private equity
- Energy and oil/gas
Working for larger, multinational corporations also usually results in higher salaries compared to smaller companies.
Variations by Geographic Region
Financial modeling salaries tend to be highest in major metropolitan areas like New York City and San Francisco where the cost of living is extremely high. However, adjusted for differences in living costs, compensation is often comparable across different regions of the country.
Some geographic trends in financial modeling pay:
- New York City: $85,000-$120,000+
- Los Angeles: $75,000-$110,000
- Chicago: $70,000-$100,000
- Atlanta: $60,000-$90,000
So while unadjusted salaries may appear much higher in NYC or LA for example, the localized costs of housing, food, and other expenses also need to be factored in.
In summary, education, experience, industry, and location all significantly impact financial modeling salaries. Understanding these elements can help financial modelers benchmark and maximize their earning potential over time.
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Financial Modeling Salary Ranges
Typical financial modeling analyst salaries range from $65,000 for entry-level positions up to $150,000+ for Directors and VPs with 10+ years experience.
Entry-Level Salaries
New analysts or associates with 0-2 years experience can expect to earn $65,000 to $85,000 on average. Key factors influencing entry-level financial modeling salaries include:
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Education level - Candidates with finance-related degrees from top universities typically command higher starting salaries.
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Internship experience - Completing one or more internships in financial modeling or related areas provides vital hands-on experience and can increase entry salary offers.
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Technical skills - Proficiency in Excel, financial modeling best practices, accounting knowledge, and programming languages like Python and VBA lead to higher salaries.
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Company and industry - Salaries tend to be higher at elite boutique financial firms and investment banks compared to positions in other industries.
Salaries for Mid-Level Positions
Financial modeling managers and senior analysts with 5-8 years experience make $90,000 to $120,000 typically. Mid-career salaries are driven by expertise gained on the job over time:
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Modeling skills - The ability to build complex financial models for planning, forecasting, valuations and deals expands salary potential.
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Domain knowledge - Deep experience modeling for a specific sector like healthcare, real estate or energy commands higher pay.
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Leadership ability - Managing teams and client relationships starts around this experience level.
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Continuing education - Relevant certifications like the CFA demonstrate ongoing learning.
Salaries for Advanced Roles
More seasoned professionals in director and VP level roles with 10+ years experience can earn $120,000 to $150,000+ on average. Factors influencing the highest financial modeling salaries include:
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Management scope - Overseeing larger teams and department budgets drives salaries higher.
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Client facing skills - Directors and VPs tend to interface directly with clients and lead projects.
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Technical specialization - Unique modeling expertise in M&A, project finance, risk, etc. is valuable.
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Firm leadership - Becoming a partner or senior leader at an established financial services firm increases earning potential.
In summary, financial modeling analyst salaries progress from entry-level to mid-career to senior-level based primarily on acquired functional expertise, leadership capacity, client relationships and specialized technical skills built up over time. The highest salaries go to those directing large teams, managing client engagements and providing unique modeling capabilities.
Projecting Future Earnings Potential
With the proper certifications, experience, and performance, six-figure salaries are achievable for many financial modeling analysts after 7-10 years in the field. However, it's important to set realistic expectations about salary growth and understand the different factors that impact earning potential over time.
Earning Potential with Continuing Education
Ongoing learning and credentials can provide a boost to salaries over time. Top performers with advanced degrees like MBAs and CFAs can expect higher compensation, but it takes significant time and effort to attain those credentials. More realistically, completing annual training courses and skills development in areas like Excel, financial statement analysis, and business valuation can steadily increase an analyst's market value year after year.
Overall, motivated professionals who consistently invest in developing new skills and expertise tend to see stronger salary growth over the long run. However, an MBA or CFA is not an instant path to doubling your income. Be strategic in acquiring credentials that align with your long-term career goals.
Salary Growth Trajectories
For a newly certified financial modeling analyst starting around $65,000, exceptional performers at top firms could see $10,000 to $15,000 base salary increases annually for the first 5-7 years, plateauing around the $150,000 level. However, the median salary growth is likely to be more modest at steady 3-5% annual increases.
Rather than focusing on lofty end-goals, strive for year-over-year career development through impactful work, new responsibilities, and skill expansion. Sustainable salary growth comes from the compounding benefits of gaining broader knowledge, tackling new modeling complexities, and demonstrating analytical leadership.
Equity Compensation Opportunities
In fields like investment banking, private equity, and hedge funds, bonus payouts and equity shares can dramatically increase total compensation for top talent. However, the earning potential through bonuses or stock options is highly variable and dependent on firm performance.
While lucrative compensation packages may be enticing, evaluate the holistic pros and cons of any job opportunity. Consider work-life balance, company culture, intrinsic enjoyment of the role, and long-term career trajectory. Weigh both the tangible and intangible factors when planning your career path.
Conclusion and Key Takeaways
In summary, financial modeling analyst salaries range from $65k to $150k based heavily on credentials, experience and performance. Upside earnings potential is high for top talent willing to gain expertise and outperform.
Median Salary is Approximately $100k
With 5-7 years of experience, the median base salary for financial modeling analysts is about $100,000 in the U.S., with bonuses and equity further increasing total compensation. Key factors impacting salary potential include:
- Years of experience in financial modeling and analysis
- Specific domain expertise such as banking, energy, or technology
- Advanced credentials like the CFA or MBA
- Ability to create complex models and data analysis
Education and Certifications Impact Earning Potential
Ongoing learning initiatives, credentials like the CFA, and graduate degrees in finance or business dramatically boost earning potential. Some key education recommendations include:
- Earning an MBA with a finance concentration
- Gaining the Chartered Financial Analyst (CFA) designation
- Taking financial modeling training courses
- Learning programming languages like Python and R
These measures demonstrate expertise and expand career options that offer higher compensation.
Specialization in Banking and Energy Pays Off
Gaining deep modeling expertise in high-paying industries like investment banking, private equity, venture capital, and energy leads to higher salaries. Developing specialized skills in these domains signals talent and ability to potential employers. Key specializations to consider include:
- Investment banking and mergers & acquisitions
- Private equity and venture capital
- Energy trading, utilities, oil & gas
- Technology sector analysis
Pursuing a niche allows financial analysts to command higher salaries while advancing their careers.
