Salary Outlook with Financial Engineering Degree

By Henry R. Steele - August 7, 2018
Reading Time: 4 minutes

Financial professionals are seeing higher demand for their services today. As the US economy is getting stronger, there is more need for financial experts to work in banks, investment houses and lending institutions. When you combine engineering and financial management skills into one skill set, it can make you very much in demand as a team leader in many companies, including engineering and financial and banking organizations.

If you are thinking about getting your degree in financial engineering, you may want to consider how much money you can earn with this degree. Your salary will ultimately depend upon these factors:

  • Whether you earn your bachelor’s or master’s degree
  • The type of job that you select
  • How many years of experience you have in financial engineering
  • Where you live geographically

With this information, you will have a good idea of what your salary can be in this field.

Type of Financial Engineer Degree

Experience and research shows that people with a master’s degree have the potential to earn a higher salary over time. The Bureau of Labor Statistics notes that professionals with a bachelor’s degree have an average salary of $56,000 per year, while those with a master’s degree earn $68,000 per year. It is possible that some professions with a master’s degree will have a higher or lower salary than the average amount. See also Highest Paying Engineering Careers

BLS reports the following salary information for these related professions in terms of bachelor vs. master’s salary:

  • Mathematicians and statisticians: $60,000 vs. $80,000
  • Environmental scientists: $62,000 vs. $80,000
  • Chemists and material scientists: $60,000 vs. $71,000
  • Financial managers: $78,000 vs. $110,000
  • Transportation, storage and distribution managers: $62,000 vs. $90,000

Payscale.com also notes these salaries for various positions in finance with a bachelor’s in finance:

  • Financial analyst: $56,900
  • Senior financial analyst: $75,700
  • Finance manager: $82,400
  • Financial advisor: $55,700
  • Credit analyst: $45,700
  • Portfolio manager: $72,600

For a master’s degree in finance, these are the typical salaries:

  • Financial analyst: $61,400
  • Senior financial analyst: $78,300
  • Financial controller: $83,700
  • Finance manager: $93,100
  • CFO: $144,800
  • Finance director: $134,000

With a master’s degree in financial engineering, you may eventually be able to move into a VP of Finance role. This can land you a salary of $140,000 per year or more.

Having a master’s degree in financial engineering or finance will usually give you a higher salary in most occupations.

Type of Financial Engineer Occupation

The occupation you choose with your degree in financial engineering will be key to determine your ultimate salary. Common roles with this degree are:

Financial Engineer

A financial engineer works for many types of financial institutions, including banks, investment houses, and mutual fund companies. They must be experts in applied mathematics, economic theories, statistics and computer science. Financial engineers need to know how to use analytical and mathematical tools so they can create algorithms that are used for financial analysis. They also need to be able to provide detailed financial analysis of the asset classes and products for their company.

The financial engineer is mostly responsible for providing backend development for analytical processes, and acting as a middle man between clients and the IT team. Their work is critical for developing analytical systems and strategies to make good financial decisions for organizations.

Aspiring financial engineers earning their degree should have a high degree of skill in various programming languages and applications: Python, SQL, UNIX and Javascript.

Payscale.com reports the median salary for a financial engineer is $79,200, with a range between $58,000 and $120,000.

Financial Analyst

A financial analyst is responsible for giving guidance to individuals and businesses that are making important investment decisions. They mostly assess the performance of stocks, bonds and other investments. Financial analysts are usually either buy side or sell side analysts. Buy side analysts are responsible for developing investment strategies for firms that have millions of dollars or more to invest. Sell side analysts provide investing advice to financial services sales agents who sell bonds, stocks and related investments.

Many financial analysts focus on the economic trends that affect a certain industry, or a geographic area or type of product. These financial managers are responsible for the health overall of the financial portfolio. They are also supposed to provide explanations for investment decisions and strategies in meetings with shareholders.

The Bureau of Labor Statistics reports the median salary for financial analysts was $84,300 in May 2017. The lowest 10% earned less than $51,000 per year while the top 10% earned more than $165,000. Financial analysts earned the following salaries in these industries:

  • Securities, commodity contracts, and related financial investments: $100,100
  • Professional, scientific and technical services: $83,900
  • Management of companies and enterprises: $82,500
  • Credit intermediation and related: $80,800
  • Insurance carriers: $76,800

Financial Manager

A financial manager is responsible for overseeing the financial health of an organization. They make financial reports, direct activities in investments, and formulate strategies and plans for the long term financial health of the company. The role of the financial manager is changing as there have been so many technology advances over the years that are reducing the time needed to produce financial reports. The major job of a financial manager today is to do more data analysis and to provide advice to senior managers on how they can increase revenues.

Financial managers often perform tasks that are related just to the industry or organization. A government financial manager has to be an expert on government appropriations and budgeting processes, while healthcare financial managers need to be experts in healthcare finance.

The median salary for financial managers is $125,000, with the top 10% earning more than $208,000 per year. Median salaries for financial managers in the following industries are:

  • Professional, scientific and technical services: $147,000
  • Management of companies and enterprises: $141,000
  • Manufacturing: $124,000
  • Finance and insurance: $123,000
  • Government: $110,000

Work Experience

How much experience you have with your financial engineering degree will affect salary. For example, a finance manager with the following levels of experience will have different salaries:

  • Less than five years of experience – $72,000 salary
  • 5 to 10 years of experience – $95,000
  • 10 to 20 years of experience – $99,000
  • More than 20 years of experience – $84,000

Geographic Location

Where you live in the US will also affect what you earn. The average salary for a finance manager in the US is $92,500. But this salary will go up or down according to residing in these cities:

  • San Francisco CA: +25%
  • Seattle WA: +17%
  • Atlanta GA: +14%
  • New York City: +11%
  • Houston TX: +11%
  • Denver CO: +10%
  • Cincinnati OH: +10%
  • Washington: 0%
  • Miami FL: -5%
  • Austin TX: -8%

With a degree in financial engineering, you will have the skills, knowledge and tools to qualify for many high paying finance positions in banking, insurance, lending and more.

References

Henry R. Steele
Henry R. Steele
Managing Editor
Henry is Managing Editor of BusinessStudent.com. He is a seasoned business professional who regularly consults with local business's throughout Southern California. Henry pursued his undergrad in Business and Economics at the University of San Diego and gained valuable life changing experience through a unique internship upon graduation.Follow on Twitter.com

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