This winter, 60 five graduate students studying for their Masters of Financial Engineering earned, on average, an annual salary of $94,068 working at Wall Street firms. As interns.The generic term for what the students are studying to become is “quants,” financial engineers that (generally) design trading systems.
Four years ago, $90,000 was about the average starting base salary paid to quants who had already graduated. But this year, at least 65 graduate students made that much as interns (the actual number of graduate student “quant” interns is undoubtedly much higher).
Of course their salary was paid monthly, $7,839 per month, and it was only for 3 months, but the significance is in the annual number. Because Wall Street interns are typically paid salaries comparable to what they would make as employees — without bonus — their annualized salaries provide a good starting point by which to measure what a firm would pay as a base salary if it hired them.
So it’s reasonable to guess that if graduate student interns are making around $100,000, that’s on the low end of the average base salary for a quant heading into his or her first year on Wall Street this year. (Most likely, they aren’t going to work on Wall Street for the base salary. They’re going for the bonus. But anyway.)
What that means is: Base salary pay per year for quants has spiked a lot since four years ago, according to a person familiar with hiring on Wall Street.
Four years ago, he says, quants (financial engineers with degrees) were looking at annual base salaries in the range of $85,000 to $90,000. But now Wall Street firms are paying graduate student interns that much, and quants are looking at starting base salaries more in the range of $200,000, he says.
And remember that’s just the average, so some firms are paying a lot more. For example, $94,068 per year is the average of 65 students at the Haas School of Business at the University of California at Berkeley, seven of whom went to Goldman Sachs in New York, 16 of whom went to JPMorgan, BNP Paribas and the Global Emerging Market Group in New York. We assume that those seven who went to Goldman Sachs bumped the average up quite a bit.
Obviously, these are number worth bragging about. Here’s what it says on the website for the Haas School of Business at the University of California at Berkeley:
60-five students have been placed in the winter internship program, which runs from mid-October to mid-January…
This year, of the 23 students with internships in New York, seven will be at Goldman Sachs; the rest will be at JP Morgan, BNP Paribas, The Global Emerging Market Group, and other firms. Nine interns are in Asia, including five at JP Morgan Asia, and another student is at Corpbanca in Chile. The interns are earning, on average, $7,839 per month.
Obviously the downside for the well-paid interns is that their hours are long and the work is difficult. They’re paid like employees for three months, they work like employees for three months.
For example, one of the students, who interned at Goldman Sachs Asset Management, helped the team design portfolio strategies so that insurance companies around the world can manage their assets and risk. (Risk management is a standard job for a quant because it involves structuring the different layers of risk that the firm is exposed to via its positions in order to measure how, in different circumstances, those positions could affect the firm’s bottom line.) Another worked at JPMorgan as an associate structurer.
Another downside: word about their high salaries got out already. In the past 10 years, the number of quant finance programs in grad schools has exploded according to Quant Network.