So you’ve decided to pursue an advanced degree but are having trouble deciding between an MBA and a Masters in Finance (MSF)? With the advent of analytics and artificial intelligence and changing socio-economic pictures of countries around the world, it is a challenge for finance professionals to choose between MBA vs Masters in Finance, to advance their careers. Let us have a detailed look at these, with a focus on career opportunities post each of these degrees.
There are several important differences between the two degrees, and it is crucial to understand them before making your decision. While both degrees are post graduate and require some work experience, there is a lot of difference between the two. Here’s a quick look at the broad differences between them:
Program focus: An MBA program is more focused on general management and leadership whereas MSF programs focus more on finance and financial management. If a career in finance is what you want, an MSF degree might be better.
Curriculum: An MBA program has a wide range of courses such as accounting, economics, marketing, operations etc. An MSF program focuses only on finance related topics like financial risk management, portfolio management, investment strategies etc.
Career path: A Masters in Finance can help you get entry-level or occasionally mid-level positions in finance-related fields such as investment banking and wealth management. The MBA degree also opens up these options but usually after additional experience due to its broader focus.
Jobs after MBA in Finance
The cost of a two year programme is easily around $60,000 or more. This is the basic tuition and administration fees. This will include the livings expenses, books, boarding and few other miscellaneous expenses which will easily amount to $100,000 to $120,000.
The Salary after MBA in Finance can be from a $41,000 to $ 60,000 depending upon your field of study and work experience. Only the highest paid median salaries cross $90,000 per annum.
A career after MBA in Finance was regarded as the best option one could find but owing to so many MBA courses and so many MBA graduates every year, the quality has fallen well below employability level along with the increasing competition which has pushed the concept of a “general manager” with a specialist requirement.
As per a pan-India study done by the assessment services company, MeritTrac, only 23 percent of the MBA graduates are employable. This leads to a huge deficit of budding managers who can become the go-to man of an organization few years down the line.
So what after MBA? How does one differentiate oneself in the industry? Getting into the job market is important for various reasons:
Roles Available after MBA in Finance
One becomes aware of the various roles the industry has to offer and one can get a first hand view of what is important as a generalist and what knowledge base is required for your function.
For example, a financial audit role will require you to be aware of the risk management techniques whereas an investment manager role will require you to be aware of valuation techniques.
Other specific roles are –
- Valuation Analyst – requires you to know valuation concepts and apply through various models along with industry trends,
- Fundamental analyst – requires expertise at reading and analysing financial statements,
- Technical analyst – requires expertise at reading and acting on technical data on stocks,
- Trader – a trader has to be adept at working the trading terminals and making quick decisions for a well-timed and accurate trade for maximum profit for his clients
- Investment Manager/Fund manager- looks after the asset allocation and security allocation of portfolios for clients for their company
In a more generalist financial role, you can switch between specific roles. You can take your time to assess and decide the need for a specific knowledge base or course pertaining to your interest, comfort and job potentials. Examples of generalist finance roles are –
- Financial analyst – this role can vary from analyzing financial statements and research to budgeting and financing study. Each company might describe an analyst’s role a bit differently per their requirement. It can be called as a generalist finance role as it can encompass variety of tasks
- Research Analyst – This profile can require research of various kinds like specific assets (as defined by the role), of industry (auto industry research analyst), sector (real estate research analyst), economy (Macro-economic research analyst).
All these general and specific roles are required in banks and financial institutions like Citibank, J.P. Morgan, Morgan Stanley, Deutsche Bank, Credit Suisse and many such similar organisations which have banking and investment banking as part of their business will have such profiles.
A lot of options are available after an MBA in Finance and more intense training in financial concepts and applications.
CFA (Chartered Financial Analyst), CFP (Certified Financial Planner), Financial Risk Manager (FRM), Chartered Alternate Investment Analyst (CAIA), 3 Certified Information Systems Auditor (CISA), Certification in Risk Management Assurance (CRMA) and many others are available post an MBA.
The idea of a course after MBA is to add more dimensions to your CV as well as knowledge base.
Masters of Finance
Let us compare the current scenario by positioning options available after the valuable MBA degree to doing a Masters in Finance. The reason we are looking at Masters in Finance is because finance as a subject has become too technical to be taught in a two year MBA with many other electives.
Even with a whole year dedicated to your specialization, there are various new changes in the field along with the inclusion of technology that a Masters degree in Finance will give the core understanding of various nuances which can be easily missed otherwise.
As clearly indicated by a study done by ASSOCHAM in 2015-16, only 7 percent of the finance-MBA students were capable of joining the BFSI sector. As they observed, the quality of education across disciplines is poor and does not meet the needs of the corporate world.
Masters in Finance will deal with various subjects like accounting, corporate finance, financial valuation, behavioural finance, capital markets, derivatives, quantitative methods, econometrics, financial modelling, regulations and reporting.
These are covered in much more depth than a regular MBA program. Specialised subjects like Financial Engineering and Financial Planning are also a part of this courseware in many colleges.
Fees
Going as per fee structure put on the websites of various colleges, M.S in Finance can range from $31,000 to $150,000 from a median range to a top rung college. Going as per the breakdown and scholarships, one can carefully select the affordable colleges.
The top ranked colleges for Masters in Finance, as per the well –respected Financial Times annual rankings are –
1) HEC Paris, France
2) ESCP Europe, France
3) IE Business School, Spain
4) EDHEC Business School, France
5) MIT Sloan, USA
Jobs after Masters in Finance
Masters in Finance Program is more specialised than an MBA in Finance program and is looked upon by companies to employ for specific roles under the finance function.
It is expected that it has already conditioned the student to the number crunching and analytical environment needed for a core finance profile.
Most specialist roles like investment managers, risk managers, audit roles and investment bankers are picked from Masters in Finance owing to the gruelling preparation and training which prepares them better in the latest financial softwares, updated market trends and requirements.
- Investment Manager- a person working with an investment company and engaged in advising on investments in portfolios of various clients. Requires large amount of data and information processing, hence is a specialised role.
- Risk Manager – advises and builds systems in place against various risks a businesses or investments might encounter. Requires understanding of various processes and compliance with various standards of operations and regulations,
- Audit Roles – important compliance role as mandated by government and all investment companies and banks employ audit managers to fulfil this and submit periodic reports on behalf of the organisations,
- Investment Bankers – deal making and negotiation along with a knack of understanding value and numbers is required. One can be trained to understand the established concepts to be an effective deal makers.
Conclusion
Finally to conclude, to gain access to specific roles, Masters in Finance will be a better option though for a general finance role where you might be undecided, an MBA in finance will be more suited for a generalist role.
Having said that, one should weigh the pros and cons of getting pre-hand experience for a Masters in Finance. This will help to effectively understand the nuances that will be part of the course and will make studies more useful.
Sources:
https://business.illinois.edu/msf/admissions/fees/
http://www.hbs.edu/mba/financial-aid/Pages/cost-summary.aspx
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