How much do Canadian portfolio managers make?

Updated: November 21, 2023

In today’s dynamic and ever-evolving financial landscape, the portfolio manager plays an important role. It’s their job to manage the assets and generate wealth for individual investors, financial institutions, or organizations.

Portfolio managers analyze market trends and make strategic investment decisions, all to maximize returns and minimize risks.

In this article, Wealth Professional provides insight into the earning potential of portfolio managers in Canada. Whether you’re considering a career in portfolio management or simply curious about the job and its potential financial rewards, this piece is for you. 

What factors affect a portfolio manager's salary?

There are a few factors that most employers use as the basis for a portfolio manager’s salary. What influences their salaries the most are:

Level of experience

More experienced portfolio managers with a high level of education can of course command a higher salary.

With the standards of some Canadian financial institutions becoming more demanding, they can be willing to pay top-dollar for portfolio managers with an MBA in economics or finance. Their education, along with years of experience, plus the appropriate licenses and certifications from organizations like the Canadian Securities Institute (CSI), can place a portfolio manager at a higher salary range.

The organization that employs them

Larger financial institutions like banks, brokerage firms, and investment houses will naturally pay higher salaries than smaller companies.

Job location

A portfolio manager who works in a major city or state with a financial district is likely to make more money.

Salaries can vary from state to state due to other factors like cost of living and the state of the job market there. For example, the salary for a portfolio manager in Toronto would likely be higher than a portfolio manager’s pay in Calgary.

What is the average salary of a portfolio manager in Canada?

The average salary for a portfolio manager in Canada is around $85,885. According to Glassdoor, the salary for this job in Canada ranges from $98,000 to $229,000 a year. Some of the companies that pay the highest salaries for portfolio managers include:

Based on estimates, the additional pay for a portfolio manager is around $31,158 a year. This can include a cash bonus, profit sharing, commissions, and tips.

Career progression and salary growth for a portfolio manager

Most portfolio managers start out as financial analysts. Their specialty from the beginning is in stocks, bonds, mutual funds, and other securities on the market. Portfolio managers have to work their way up the ladder, starting from Junior Analyst to Senior Analyst.

Junior Financial Analyst

Graduates with degrees in economics, finance, or business administration can start out as junior analysts. After some years working in this position, they can get their master’s degree in business administration (MBA) or other graduate degrees related to their work, then move up to a senior analyst position.

In some instances, if a new applicant has an MBA with impressive grades, they may immediately get hired as senior analyst.

Senior Financial Analyst

Junior analysts who are promoted to Senior Analyst have often gained years of experience in their roles, and obtaining an MBA is a must. Much of the role of senior analyst entails writing reports and recommendations for specific securities. This is also done under the mentorship and guidance of a portfolio manager.

Much of the senior financial analyst’s job is to do new research and analysis on a particular category of securities. Oftentimes, they are tasked with keeping information about these securities up to date. They do this via research, staying abreast of new developments, and communicating with their contacts in the finance industry.

Once a senior analyst has enough information, they make a thorough analysis then present their recommendations to their superiors and their clients. Senior analysts may also supervise one or more junior analysts.

Portfolio Manager

After some years working as a senior analyst, they may be promoted to senior manager or portfolio manager, unless there’s an opening for assistant portfolio manager. This may sometimes be the case if a more senior portfolio manager needs an assistant in identifying and analyzing investment opportunities while managing an otherwise massive portfolio.

If a portfolio does well, the portfolio manager can be entrusted with larger portfolios with more significant amounts of money under management.

In most cases, the position of portfolio manager is the pinnacle of a financial analyst’s career. However, it’s not unusual for some portfolio managers to become part of the executive committee and/or take shares in their company. Another possible path is for a portfolio manager to start a new firm.

Gender and diversity: a salary perspective in portfolio management

Canada currently ranks 7th in terms of gender diversity in the fund industry. As of March 2023, a Morningstar survey found that out of 1872 fund managers registered with them, only 234 are women. This means only 12% of Canada’s mutual funds have female portfolio managers.

Although this may sound insignificant, Canada ranks better than the US in terms of gender diversity in the finance industry; only 10% of fund managers in the US are women.

Other countries score higher. Singapore is the most inclusive, with 30% of their managers being women. Spain and Hong Kong (China) are tied at 26%.

In another recent Morningstar survey, it was revealed that women’s total compensation (gross salaries plus bonuses and other compensation) is still roughly 23% less than their male counterparts. And performance is not the issue. To combat this, the Canadian government passed the Pay Equity Act to mitigate the gender wage gaps.

Under this law, employers in federally regulated areas with at least ten employees will have 3 years to identify and correct any pay disparities in their workplaces.

The Act also requires employers to check that their employees receive salaries equivalent to the work and value they bring, considering their skills, efforts, responsibilities and the working conditions.

Change may be slow, but it is coming; women considering a career in finance should also know that there is a growing demand for female managers in the finance industry.

Challenges and rewards of being a portfolio manager

The job of a portfolio manager is very demanding, for a few reasons:

The cost of entry is high

While you don’t pay a fee to become a portfolio manager, the “cost of entry” into finance is high compared to other industries. Beginning with the bare essential of a high level of education, you’ll also need an MBA with high marks to work your way up to become a portfolio manager.

Also, no one becomes a portfolio manager overnight. You'll need many years of experience as a financial analyst before you can even be considered for the position. It can cost a lot of time, money, and effort to become a portfolio manager.

You have to learn constantly

To become a good portfolio manager, you have to keep learning new things. Working in finance is like always taking a class or training program in something new and unfamiliar.

Apart from getting your licence and CSC certification, working your way up involves staying updated with current events, new technologies, and financial trends. This can be advantageous for those who like to be kept on their toes, but challenging for those who may be averse to change.

It involves big responsibilities

You can be under a lot of pressure if you handle a portfolio with millions of dollars' worth of investments. These days, some clients also expect their portfolio managers to exercise corporate social responsibility when creating investment portfolios. Working at these levels of responsibility is not for the faint of heart, but it can be exciting for those who like a challenge.

Another dimension of this responsibility means staying receptive and faithful to your client’s needs. You are duty-bound, if not contractually obligated, to work in the interests of your client or employer and manage the portfolio with their goals, budget, investment strategy, and risk tolerance in mind.

The work hours are long

Starting early and finishing late is a common practice in finance. In the high-stakes financial industry, you may end up having very little time for personal interests or relationships as you work your way up.

As for the rewards, you need only look at the average salaries, bonuses and additional cash that portfolio managers can earn. The job can also be fulfilling, knowing that you successfully handled assets worth a lot of money.  

Given the rewards and challenges that come with the job, are you interested in the career path of a portfolio manager? Yes? Then here’s a video that might be helpful. This was made by an ex-portfolio manager, and she candidly offers interview tips that can help you land that portfolio manager job:

Factors influencing future salaries of portfolio managers

There are internal and external factors that can influence the growth (or reduction) of your salary as a portfolio manager.

Internal factors can include:

• The company’s annual budget
• The company’s pay scaling or hierarchy
• Your skills, experience, and performance

External factors can include:

• An economic recession or expansion
• Inflation
• Geopolitical conditions like trade wars or political instability
• Natural disasters, unusual weather events due to climate change

The main difference between these factors is control. Internal factors are within your control while external factors are not. Your skills, experience, performance for the year, client feedback – these you can directly or indirectly influence. Factors like these are assessed by the company’s management to see if you’re worthy of a pay increase.

As for external factors, these can affect your prospects of a salary increase or promotion directly or indirectly as well. A downturn in the housing market, international trade wars and sanctions – adverse events like these can have a ripple effect that elevates risk and potentially affects your portfolio’s earnings.

Less money earned due to these factors can put a freeze on salary increases. But in good times, there’s always the possibility of a pay increase, a bonus, or even a promotion.

Is a career as a portfolio manager worth it?

Whether a career in portfolio management and working your way up to portfolio manager is worth it depends on the individual. The field of finance and portfolio management is very competitive, challenging, and stressful to say the least. Not to mention that it takes a long and arduous process of diligent study, thorough research, and years of practice to become good at this job and reap its rewards.

At the same time, it can be a fulfilling profession, with the potential to provide you with great financial rewards. Other benefits include the opportunity to expand your knowledge in finance, economics, business, and perhaps other fields like technology make it an appealing career choice.

A good way to know if this career is for you is to do some research. You can read stories of successful portfolio managers. See if you can talk to some of them directly about the job and their experiences – then you can decide if it's right for you.

Now that you know a bit about the job and salary of a portfolio manager, is this a profession you’d consider? Why or why not? Let us know in the comments!