This content is from: Portfolio

Financial Education: Masters of Finance Versus the MBA

Upstart master’s programs in finance or financial engineering are starting to give MBAs a run for the Wall Street bonus money.

“I don’t really hire MBAs,” confides Tat Sang Fung, head of financial engineering for Misys, a British provider of software to financial services and health care companies. “My team has MAs in financial engineering, engineering or statistics, but no MBAs.”

Fung argues that although MBA graduates still have a function as general business managers, for the quant skills needed in financial engineering, the master’s in finance wins hands down.

“With an MA in mathematical finance, you won’t be able to run a toothpaste [assembly] line,” Fung maintains, “but you will be able to manage and execute derivatives.”

Fung, who teaches part-time at Columbia University’s master’s in mathematical finance program, is at one pole of a growing Wall Street debate over the MBA versus the master’s in finance. Upstart master’s programs in finance or financial engineering — some 70 exist worldwide, says the International Association of Financial Engineers — are starting to give MBAs a run for the Wall Street bonus money.

Of course, to compare an MBA with a graduate finance degree is a bit like comparing a stock with a bond. They’re akin in function yet distinctly different. The finance master’s lacks the core leadership and marketing course work of an MBA and instead offers a specialized curriculum geared to providing quant skills.

To be sure, the graduate business degree is hardly obsolete on Wall Street. “The MBA ultimately offers you more options, including a financial career,” contends Jim Aisner, a spokesman for Harvard Business School. “You get a lot of finance but also are taught a broader point of view.” According to HBS’s career services director, Jana Kierstead, the main value-add of an MBA is not narrow technical skills but “critical thinking.”

How is retrenchment on Wall Street affecting holders of finance diplomas? “The quantitative nature of our program prepares our graduates for a number of roles,” says Wendell Collins, director of corporate relations for Princeton’s master’s in finance program. Placement is holding strong, he asserts, drily noting that some Princeton students already have MBAs and are seeking MAs in finance to hone their quant skills. One quantitative measure of the program’s success is that applications tripled, to nearly 600, from the class of ’04 to the class of ’09.

But perhaps even an MBA and an MF won’t be sufficient in the future. On the horizon: the practitioner Ph.D. in finance. Offered by French business school Edhec–Risk Institute at campuses in London, Nice and Singapore, this program allows students to work full-time while plugging away at Ph.D.s in finance.

Related Content