If you’re trying to find a qualification that will guarantee you a job in banking, the choices are obvious. You can go for the CFA charter, which will take 900 hours of home study in the evenings and weekends and cost a few thousand dollars. You can for a Masters in Finance, which will cost you anything from £20k to £30k in fees ($31k to $47k). Or you can try a top MBA, which will set you back to the tune of £68k ($106k) if you opt to study somewhere like the London Business School.
In the circumstances, it’s hardly surprising that aspiring bankers are taking CFA exams and Masters in Finance qualifications in increasing numbers. More surprising is the fact that banks seem to be increasingly preferring Masters in Finance students over MBAs.
Our own data (derived from the eFinancialCareers CV database) suggests that there are more individuals with Masters qualifications than with MBAs in all front office roles in investment banks. This doesn’t just apply to sales and trading, where Masters qualifications are usually seen as most appropriate, but to investment banking divisions (IBD) which encompass M&A and corporate finance. As the charts below show, Masters-qualified individuals are particularly prevalent in Europe, but they dominate in the Americas and Asia too.
Ok, not all Masters qualified individuals will have studied a Masters in Finance. Anecdotally, however, the qualification is gaining momentum. “MBA hiring into investment banks is relatively small now compared to what it used to be,” says a former head of graduate recruitment at a major bank who now heads the careers service at a UK business school, speaking on condition of anonymity. “Sales and trading desks are looking for a more technical skill set with a higher level of quantitative skills than you get with an MBA.”
It helps too that Masters in Finance students enter banks as analysts, whereas MBAs go in one run above as associates and are therefore more expensive.
Recognizing the demand for Masters in Finance students over MBAs, business schools are increasingly offering both qualifications. London Business School’s MiF qualification is best established, but Judge in Cambridge has also offered an MFin to experienced students since 2010, while Oxford’s Said Business School offers an MSc in Financial Economics, which it says is the ‘UK’s Number I Masters in Finance Programme’.
“Our Masters in Finance students are popular with all financial institutions and with consulting firms too,” says the careers service head. “By comparison, if you have an MBA but no experience in banking, you will find it very hard to get in now.”