UK
The MBA has traditionally been a staple part of any financial services CV. But with the cost of attending business school getting higher, and the squeeze on City jobs beginning to pinch, does it still give young professionals the key to transform their career in finance?
The decision to go back to school is not one to be taken lightly. An MBA brings no guarantees, and students who study just to have it on their CV may ultimately regret it. Given the costs involved, candidates need to be certain that the qualification is really going to add value. The US schools in particular are phenomenally expensive, and while some firms do offer sponsorships to business school, the majority of candidates must still fund themselves.
Hefty outlay with no guarantees
The cost of taking a career break often means students end up with personal loans to the tune of 40k-50k to fund two years in the States – a hefty outlay for no guarantees at the end.
The good news is that it is still a qualification that employers like to see.
Approximately 80% of top finance professionals have an MBA, and there is little doubt that it does develop more rounded candidates. It is a great way to develop, for example, a junior investment banker from a modelling junkie into a more commercially savvy individual. In addition, students benefit from an insight into the commercial and operational aspects of business.
The MBA provides a forum to combine financial skills with the operational management skill set needed in more senior roles. Harvard, for example, uses case study methods to provoke discussion as students from different fields of experience mix with each other. This closely replicates the business environment, where consultants, strategy consultants, people from the corporate world, bankers and hedge fund executives all work together and frequently benefit from one another’s experiences.
A network to die for
One of the big upsides of business school is that it gives students a phenomenal network. This is an important additional tool on top of the learning experience. The friendships and networks made will often play a useful role in furthering careers after graduation.
A word of warning, though: employers are increasingly selective about which schools they are prepared to hire from. With over 200 institutions offering MBAs in the US alone, choosing the right one has a huge impact on employment opportunities and salary expectations post-MBA.
Which b-schools have the edge?
On the financial services or private equity side, top firms tend only to look at Harvard, Wharton, Columbia and Chicago Graduate School of Business in the US. In Europe, INSEAD and London Business School also have good reputations, but the US schools certainly seem to have the edge. What student who commits to a one or two-year MBA aspires to be in a second or third-rate private equity firm?
School may not be out, but the question of which school is in has never been more important.
Somerled Macdonald is a partner at Redgrave Partners.
Great article. Would like to know which reputation have Instituto de Empresa and IESE from Spain. Are they at the same level than INSEAD and LBS or it is still a long journey?
Thanks,
It used to be fairly easy for someone with no financial (but other professional) work experience to use an MBA at one of the above schools to move into Investment Banking. Is that still the case?
I’m considering an MBA for this reason but concerned I may not reach my goal and all the jobs will go to ex bankers/finance professionals.
And how exactly do Columbia or Chicago have an edge on LBS or INSEAD? Please check any rankings, please check placement reports of these schools … check anything and you ‘ll see an evidence on the contrary.
Is there a way to make sure either people write only about topics that they have some knowledge on or at least write it in a tone that is clearly an opinion and not the conclusive statement. And the editor please do something about the quality of these columns. Most of the content here is superficial with no solid content at all.
Harvard / Stanford(that you comfortably ignored) / and to some extent Wharton have extra advantage because of their solid alumni network. Beyond that LBS / INSEAD are better than any other schools you mentioned in any aspect – student quality, internationalism, faculty.
Apart from the US & European schools are there any Asian schools which standout internationalyy?
Jcmoron,
Instituto de Empresa as well as IESE are very good business schools with a strong network. They both have propelled themselves, in particular IE into the top 5-10 of the global rankings often leaving some of the top US schools behind them. Further there is an optimal price/quality ratio especially compared to the US. The fact that Mr. MacDonald seems to get stuck with a number of Anglo-American B-schools has probably more to do with the familiar arrogance coming out of that part of the world as well their ignoranceabout anything else that is happening in the rest of the world. And don’t worry about your career: I did my MBA at IE long time ago, became a professor in finance at a top 5 business school and
have my own multi-billion dollar emerging markets PE fund., so you are gonna be fine.
Don’t let yourself be distracted by some of his comments, they are biased and should be meaningless to you.
Strictly relating to IE and IESE, the first has done a fantastic job in marketing itself in last years: they look at any area taken into consideration in rankings (e.g. FT’s) and set – and often reach – ambitious targets, even if they are succesful mainly in fields such as diversity.
However, IESE has still a better and larger network with financial institutions: indeed, it should still be the third target for recruiters after LBS and INSEAD if we look at Europe-based B-Schools only.
I’m biased by the fact I’m a IESE MBA, but actually it’s much more common to find IESE graduates than IE ones in London (looking at I-Banks, PE Firms, Hedge Funds).
Will you guys stop being pedantic. An MBA from Harvard, Wharton, Columbia, Chicago, Stanford, MIT, LBS and INSEAD will provide roughly the same level of recognition. What will differentiate you will be your past experience, your skills, your past academic history and you as a person.
Stop wasting time arguing about Chicago vs LBS because the fact is both are good schools and both will be as good as each other on your CV.
IESE is also a good school but slightly behind the others mentioned purely in terms of prestige. However an IESE MBA will get you into finance if you have the other important qualities.
As for Asia, if you want to work in the west stick with the US schools. I dont think any Asian MBA has international recognition.
“Approximately 80% of top finance professionals have an MBA”
Yeah right!!
Feel so sorry for MBAs starting in banking – they only start in at Associate level and they’re aged about 30. Lol that’s so pathetic, the rest of us get made Associate age 22-24.
…feel so sorry for those who think to be masters of universe and know evrything after having been made Associate age 22-24.
I’m a bit older and proud of my MBA, even if I know I’m still catching up with those with a number of years already spent in finance.
I have yet to work with an MBA associate that can not be categorised as “Mediocre but arrogant”. Why are these guys always an utter dissapointment, and actually most of the time leave the firm after 1-2 years of poor work, paltry bonus and numerous fights with other analysts and associates?
Speaking for M&A here, i suppose they do just fine in consulting & corporates. Any views?
“Approximately 80% of top finance professionals have an MBA…..” You must be joking.
Where did you come by these statistics? I am a top financial professional but don’t have an MBA
How do the US schools have an edge on LBS or INSEAD??? My friend is a very highly rated head hunter and LBS and INSEAD are the schools that he and his IB clients respect. Of course you will respct just as equally Harvard…but Wharton, Columbia and Chicago Graduate School of Business well they come below LBS in my opinion and every league table as well….if you ask all the MBA’s in most banks, in London they’ll be from European schools mostly and in the US the US schools…simple really. so if you are in Europe go to LBS or INSEAD.
Associate aged 22-24?? What tier 3 bank do you work at Henry where they dish out titles like cups of tea??? Most people start their IB career at the age of 21 after uni…are you saying that after one year you are an Associate. Nope not the case…most banks go to analyst-2 or even 3 which means earliest you may be Associate is 24/25a nd thats if you are good enough to be an associate.
Wharton etc below LBS?? Get a grip on reality. I work at a US BB IN LONDON. Check out the summer placement stats at places like GS, MS etc. Wharton smokes LBS and INSEAD in placements. In my year, of the 30 or so hires at GS, 13 were from Wharton…and 3 from LBS..and 2 from INSEAD.
Judging by a lot of the arguments here about LBS etc vs Warton etc, I’m not sure B-schools graduates can be translated into maturity……
It just goes to show that the majority on here are all students still looking to get into their first role.
I am always amazed at the retarded responses I read on here.
Thanks for the nice answer JSS, but could someone tell me if doing a MBA/eMBA or Ms in Finance in a Financial Hub such as London may have any real placement advantages?
Thanks again,
For Europe, the new MSc in Finance at Cambridge will become the gold standard for associate hirng at Tier 1 IBs. It has the same entrance criteria as MBAs but is focussed on those who wish to pursue a career in IB/PE/Sales/Trading/Structuring
Thus no need to waste time and money on a 2year MBA – all the soft courses will be largely useless
do you think Ms Finance at Cambrigde will be better than LBS?
Why?
It has more up-2-date material and is being sponsered by very senior people at top IBs and funds
cant’ see MSC Finance on Cambridge website – only had a brief look though. Sloan’s a good one too.
“Associate aged 22-24?? What tier 3 bank do you work at Henry where they dish out titles like cups of tea??? Most people start their IB career at the age of 21 after uni…are you saying that after one year you are an Associate. Nope not the case…most banks go to analyst-2 or even 3 which means earliest you may be Associate is 24/25a nd thats if you are good enough to be an associate.”
In London, at JPMorgan, Merrill Lynch, Lehman, Deutsche, UBS etc in sales/trading you can become an Associate after 2 years on the desk if you’re good enough. Hence most people I know become Associate at 23 (and VP at 25). And some of us skipped a year at school, or get headhunted early hence some 22 year old Associates around. But 23-24 is the norm for British grads, who hit Director/ED level at the same age MBA dimwits come in as Associates.
To Jcmoron (I hope that’s not your real name)
I graduated from IESE and I can tell you that its one of the top programs in the world. In terms of rankings it made #1 on The Economist Intelligence Unit survey in 2006. The program is very challenging and attracts all the top firms for campus recruiting. It also has arguably the best facilities of any business school in the world. I recommend going to one of the open days- you will be impressed. One indicator of a strong program is the caliber faculty it attracts- browse thru the website and look at all of the prominent professors coming to teach there. Good luck
No I think MS Finance in Princeton is better than MS Finance in Cambridge and LBS, and I think Stanford is better than Wharton. LBS and Chicago are saved by their location rather than quality of the studies, I think their past years exams papers are easier than the rest. Also, don’t study in US, their banks are being bought over by Asian cos they have lousy bankers. And don’t study in UK either, they are being bought over by Middle East, cos they have drinking bankers. Bwaa Haha, Seriously, any of the top univ will do you fine, at the end its about the quality of the candidate and your job performance. This article is written by someone from Redgrave Partners and that doesn’t sounds like any top company, so irony. And lastly, the world is not all about finance guys!
Cambridge and the London School of Economics recently introduced Masters in Finance only because of the huge success of the MiF offered by the London Business School, of which they’re actually copycats.
As of now, Cambridge and LBS cost approximately the same (ca. 30k) and LSE ca. 22k. The schools with the most electives to choose from are, in order, LBS, Cambridge, LSE.
Only time will tell if one of the 3 programs will stand out or if they’ll be absolutely equivalent. Chances are, the quality of the classes will probably be almost the same. As for the quality of the network, again, too early to tell.
I like the fact that LBS has a dedicated career service for MBAs and MiFs, whereas it’s not clear to me whether Cambridge and LSE offer a dedicated one, or one that’s to be shared with all the other graduates in completely different fields, and may therefore be less focused.
A few things I’d like to discuss:
I always wondered how selective business schools can really be. After all, the very best candidates are the ones who don’t need an MBA or a MiF, because they already have a great job in a top-notch firm/company/bank! If you join Goldman Sachs at 22 and are promoted to associate at 25, there’s no point whatsoever in an MBA – unless maybe you want to switch from banking to marketing :)
For someone with finance experience who wants to stay in finance, isn’t a MiF (the LBS one, for instance) better than an MBA? The pros I see are: shorter duration, cheaper tuition, more focus on what you will be doing (no time spent on hot air you won’t need, like marketing). If we trust the career reports published by business schools, it seems to me that MiF graduates don’t do any worse than MBAs – if anything, most do better, because finance tends to pay better than marketing or other areas. The downside I see is recognition: I’m afraid a MiF is not as recognized as an MBA programme. What do you guys think?
A Master’s in Finance is a focused programme which teaches very specific topics. But an MBA is so generic I struggle to see the value it really adds. I do wonder to what extent MBAs are hired because they really learnt something useful they didn’t know before, and to what extent simply because they became part of a network. In other words, to what extent do MBAs pay a tuition to be taught something, and to what extent their tuition is like a “bribe” to the business world to join an elite club, a network? I’d love to hear your thougts, guys.
Anon,
it’s weird you couldn’t find the website: a search wth google should have provided the results. Anyway, the links are:
http://www.london.edu/mif.html
http://www.lse.ac.uk/collections/finance/prospectiveStudents/mscFinanceFT/Default.htm
http://www.jbs.cam.ac.uk/programmes/mfin/index.html
Most of the comments here underline the fact that finance professionals are the most inward looking bunch of overpaid individuals on the planet. Splitting hairs on which similar business school is best when they all teach the same basic programme?!
Seamus, I don’t understand your comment. What would be wrong with gathering as much information as possible on similar programs offered by business schools, and what would be so peculiar and negative about finance professionals?
If someone wants to become, say, a caridologist, an engineer or a biologist, shall he/she choose the school to go to at random, or would it be a far more sensible approach to gather as much information as possible on several schools, even though the programs offered by most schools are very similar on paper?