Here’s How Much ETF Employees Make and Why It’s a Problem

For an industry that loves a tight spread, there’s a mismatch in the ETF world that’s getting harder to ignore: compensation. 

As investment in ETFs continues to surge, there’s a significant premium for employees who directly influence flows, liquidity and execution. Average salaries and bonuses total around $573,000 for trading roles, $369,000 for capital markets, $362,000 for sales and $350,000 for portfolio management, according to the recently released Blackwater salary index. But operations roles pay around $214,000 and research and strategy about $239,000. While most of America won’t feel sorry for employees making generous six-figure salaries, the gap could pose a problem for ETF issuers. 

“As product complexity rises, the cost of underinvesting in research, operations and platform infrastructure also rises,” said Erum Stefan, managing director at Blackwater ETF. 

Time for a Raise 

To be fair, roles that are cost centers generally are paid less than sales and trading roles, which are revenue centers, said Deborah Fuhr, founder of research firm ETFGI.  “ETF trading and capital markets is becoming more important and more challenging, given the growth in the number and types of ETFs and the various exchanges and countries where they are listed,” she added. “And the pool of qualified talent is small.” 

But nearly half of ETF professionals think they’re underpaid, according to the data. The solution isn’t necessarily blanket pay inflation, Blackwater’s Stefan told ETF Upside: 

• “The answer is more precise compensation design,” she said. “ETF issuers need to build pay bands by function, seniority, region and business impact.” 
• Trading, sales and capital markets may justify higher premiums because they directly influence liquidity, flows and execution, Stefan added. But operations, research and strategy jobs need to be repriced if the roles carry platform risk and product-quality responsibility or affect client credibility. Bonus structures should also be more clear. 

Mind the Regional Gap. US workers are also making significantly more than their overseas counterparts. Their average total compensation is approximately $471,000 compared with $340,000 in EMEA and $318,000 in the Asia Pacific region. “For global ETF businesses, this creates a real talent-planning issue,” Stefan said. “A single global compensation band no longer works. If a firm tries to hire or retain US ETF talent using European or APAC benchmarks, it will struggle.”