Private client investment managers in the US are making as much as 60 per cent less than their institutional colleagues, according to a surv...

Private client investment managers in the US are making as much as 60 per cent less than their institutional colleagues, according to a survey by the CFA Institute and Russell Reynolds Associates.

Managers to the affluent had median total compensation of $150,000, significantly less than the $245,000 paid to mutual fund managers and below the median compensation for all managers of $170,000.

The HNW managers' lower pay is likely a reflection of the fact they work in smaller boutique firms or banks, according to the survey. These types of firms pay less than securities houses and pure money management firms.

For example, banks paid median compensation of $151,000 compared to broker dealers or mutual funds, which had median compensation of $185,000 and $240,000, respectively. The survey of 10,229 full-time domestic money managers not surprisingly found hedge fund managers brought home the highest compensation, $250,000.

But hedge fund managers may be losing ground to their mutual fund counterparts, according to the survey. Hedge fund pay rose 19 per cent from 2003-2005 while mutual fund compensation rose 30 per cent.

Compensation overall rebounded from 2003, largely due to an increase in incentive compensation, which rose 17 per cent from $30,000 to $35,000; non-cash compensation dropped by half, from $10,000 to $5,000. Base salaries rose 3 per cent to $113,000.

Total compensation rose across the board from 2003 ($145,000), when the survey was last done, though it still has not reached 2001 levels when the median was $182,000.