A quantitative analyst uses quantitative methods to assist companies in making financial and business decisions. Quantitative analysts are often employed by investment banks, asset managers, hedge funds, insurance companies, and private equity firms to help them pinpoint possible investment opportunities while reducing risk. (Investopedia.com).
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Quantitative analysts are in high demand in the trading world today. The 21st century has witnessed a surge in the popularity of electronic trading that focus on numerical algorithms. Rather than having live traders on the floor of the NYSE making buy and sell orders, computer software is used on several stock exchanges, buying and selling stocks when prices reach levels the algorithm has determined are profitable.
The computer algorithm does the number-crunching work, but quantitative analysts are actually the brains that create the algorithms. The best quantitative analysts make their companies millions of dollars each month by programming these algorithms that are efficient and fast enough to find the best trades before other companies do.
On the sales side, quantitative analysts help financial institutions value each of their securities. On the buy-side, they find profitable investments and measure the level of risk versus the benefit. Outside of financial institutions, quantitative analysts might work for an insurance company to help them devise pricing models and strategies to mitigate risk. Some in this field, instead of crunch data, may work on the back end of things developing software to evaluate financial data.
Quantitative Analyst Degree Salary
To become a quantitative analyst, you need a bachelor’s or master’s degree in business, IT, computer science, statistics, or mathematics. You also will need several years of work experience in the field to snag a really high salary.
SEE ALSO: Best Online Masters in Business Analytic Degrees
Before you start to earn your degree, please review the detailed salary outlook below for quantitative analysts.
Bureau of Labor Statistics
BLS does not provide salary data in this field, but it does have information for the related profession of financial analyst. BLS states the median salary in this field is $85,600 with a range between $52,500 and $167,400. Top paying industries for financial analysts are: (BLS.gov)
- Securities, commodities contracts, and other financial investments: $101,400
- Professional, scientific and technical services: $84,500
- Management of companies and enterprises: $83,600
- Credit inermediation and related activities: $81,400
- Insurance carriers: $78,700
Payscale.com
According to Payscale, the average salary for quantitative analysts is $83,900 with a range between $56,000 and $131,000. (Payscale.com). Some of the specific salaries mentioned by company include:
- PNC Financial Services Group: $87,000
- AllianceBernstein: $95,000
- Google: $120,000
- Options Clearing Corporation: $106,000
- US Bank: $83,000
- Bank of America: $118,000
Popular skills for quantitative analysts and salaries are:
- Data analysis: $81,900
- Statistical analysis: $83,100
- Financial modeling: $87,800
- Data modeling: $81,700
- Python: $87,900
Experience level also will influence your salary as a quantitative analyst:
- Less than one year of experience: $70,200
- One to four years of experience: $81,600
- Five to nine years of experience: $106,100
- 10 to 19 years of experience: $102,600
- More than 20 years of experience: $109,700
Pay for quantitative analysts also varies by city:
- San Francisco: +33%
- New York City: +16%
- Boston: +16%
- San Antonio: +1%
- Charlotte: +1%
- Chicago: -1%
- Pittsburgh: -17%
Glassdoor.com
Glassdoor.com reports the average base salary for quantitative analysts is $119,000 with a range between $84,0000 and $174,000. (Glassdoor.com).
Investopedia
This publication reports that compensation in finance is quite high, and quantitative analysts tend to follow the trend. In some areas of New York City and Chicago, it is not uncommon for quants to earn salaries of $250,000 or more, with $500,000 possible with performance bonuses. Of course, as with most careers, the key to landing one of these high-paying gigs is to have a lot of experience in the field working with well-known financial employers.
The highest paid jobs in the field tend to be with trading firms and hedge funds. Part of your compensation will depend on how much the company earns. At the bottom of the pay scale, an entry-level analyst may earn $125,000 or $150,000. But this position usually has a quick learning curve and much room for increased salary as experience increases.
Some of the lower-paid quantitative analyst positions may be more quant developers, which is more focused on software development. A top quant developer could earn $250,000, but that is about as high as you can go in that specialty. (Investopedia.com).
Quantitative Analyst Job Outlook
BLS does not have employment outlook data for quantitative analysts, but it states that job demand for financial analysts will rise by 6% by 2028. An increasing number of financial products and the need for better knowledge of certain geographic regions will lead to robust growth for these financial professionals.
Demand for quantitative and financial analysts tend to mirror economic growth. The economy is doing well, and financial analysts are required to review investment opportunities when new companies are established or current businesses grow. Also, emerging markets all over the world offer new investment opportunities. This fact requires financial expertise in the regions where those markets exist.
Job demand for quants and financial analysts should also occur with the growth of Big Data and improvements in technology allow these workers to access better data and perform more precise analysis.
Quantitative Analyst Salary by State
| State | Hourly Wage | Annual Salary |
|---|---|---|
| New York - Quantitative Analyst Salary | $62.42 | $129,837 |
| Massachusetts - Quantitative Analyst Salary | $61.91 | $128,776 |
| New Hampshire - Quantitative Analyst Salary | $60.75 | $126,370 |
| Maryland - Quantitative Analyst Salary | $57.68 | $119,982 |
| Hawaii - Quantitative Analyst Salary | $57.05 | $118,665 |
| Alaska - Quantitative Analyst Salary | $57.04 | $118,652 |
| Nevada - Quantitative Analyst Salary | $57.04 | $118,652 |
| Montana - Quantitative Analyst Salary | $57.04 | $118,652 |
| North Dakota - Quantitative Analyst Salary | $57.04 | $118,652 |
| Wyoming - Quantitative Analyst Salary | $57.04 | $118,652 |
| Idaho - Quantitative Analyst Salary | $57.04 | $118,652 |
| Vermont - Quantitative Analyst Salary | $56.95 | $118,456 |
| Nebraska - Quantitative Analyst Salary | $56.88 | $118,300 |
| Connecticut - Quantitative Analyst Salary | $56.80 | $118,151 |
| Washington - Quantitative Analyst Salary | $56.72 | $117,975 |
| Rhode Island - Quantitative Analyst Salary | $56.15 | $116,789 |
| California - Quantitative Analyst Salary | $56.09 | $116,662 |
| Virginia - Quantitative Analyst Salary | $55.81 | $116,090 |
| New Jersey - Quantitative Analyst Salary | $54.68 | $113,729 |
| Arizona - Quantitative Analyst Salary | $54.41 | $113,170 |
| West Virginia - Quantitative Analyst Salary | $54.30 | $112,951 |
| Colorado - Quantitative Analyst Salary | $54.17 | $112,673 |
| Pennsylvania - Quantitative Analyst Salary | $53.98 | $112,284 |
| South Dakota - Quantitative Analyst Salary | $53.91 | $112,130 |
| Minnesota - Quantitative Analyst Salary | $53.90 | $112,106 |
| South Carolina - Quantitative Analyst Salary | $53.81 | $111,925 |
| Oregon - Quantitative Analyst Salary | $53.76 | $111,827 |
| Tennessee - Quantitative Analyst Salary | $53.71 | $111,715 |
| Delaware - Quantitative Analyst Salary | $53.57 | $111,418 |
| Utah - Quantitative Analyst Salary | $53.41 | $111,098 |
| Kentucky - Quantitative Analyst Salary | $53.32 | $110,913 |
| Kansas - Quantitative Analyst Salary | $53.09 | $110,430 |
| Ohio - Quantitative Analyst Salary | $53.00 | $110,236 |
| Indiana - Quantitative Analyst Salary | $52.74 | $109,690 |
| Oklahoma - Quantitative Analyst Salary | $52.61 | $109,421 |
| Wisconsin - Quantitative Analyst Salary | $52.41 | $109,021 |
| Iowa - Quantitative Analyst Salary | $52.34 | $108,873 |
| Louisiana - Quantitative Analyst Salary | $52.17 | $108,506 |
| Maine - Quantitative Analyst Salary | $51.92 | $108,003 |
| Texas - Quantitative Analyst Salary | $51.39 | $106,901 |
| Alabama - Quantitative Analyst Salary | $50.99 | $106,066 |
| Georgia - Quantitative Analyst Salary | $50.99 | $106,055 |
| Arkansas - Quantitative Analyst Salary | $50.95 | $105,978 |
| New Mexico - Quantitative Analyst Salary | $50.53 | $105,093 |
| Mississippi - Quantitative Analyst Salary | $50.25 | $104,520 |
| Michigan - Quantitative Analyst Salary | $50.04 | $104,089 |
| Illinois - Quantitative Analyst Salary | $49.92 | $103,844 |
| Missouri - Quantitative Analyst Salary | $48.95 | $101,807 |
| Florida - Quantitative Analyst Salary | $48.00 | $99,848 |
| North Carolina - Quantitative Analyst Salary | $43.70 | $90,901 |
Source: Ziprecruiter.com, January 2020.
Summary
Becoming a quantitative analyst could be an excellent growth job for years to come. The 2008 financial crisis exposed some of the limits of our financial systems. There is now a much higher demand for risk transparency reporting from the federal government, and investors want better risk infrastructures to protect their money. These developments represent a major opportunity for quantitative analysts.
As mentioned earlier, the salary in this field is highly competitive and job demand is rising. If you enjoy a job that is intellectually stimulating and allows you to solve complex financial problems under pressure, this could be the ideal career for you.