If you have considered pursuing an MSc in finance, you may have come across other degrees that sound similar, such as a Master’s in mathematics of finance, a Master’s in financial engineering or a Master’s in computational finance. Several aspects of these courses overlap. So what is the difference?
MSc in finance is intended to prepare students for a wide range of careers both inside and outside the financial industry, including financial engineering and risk management, quantitative asset management, macroeconomic and financial forecasting, quantitative trading, and applied research. It aims to produce finance generalists, whereas these other programmes aim to train ‘quants’ – specialists in derivatives, fixed income, alternative financial instruments and risk analysis.
These ‘quant’ programmes are different from a Master’s in financial economics, which focuses on theoretical finance and on developing models and theory. The nature of this degree varies between universities, though in most cases it is largely theoretical, and prepares graduates for research positions, for doctoral study in economics, or for roles in applied economics. However, some degrees are positioned as professional degrees and are comparable to the MSc in finance.
Thus, it is advisable to evaluate the programme at each university you are considering to determine the key focus areas — do not just look at the name of the degree. Carefully consider your learning objectives and career goals before picking the programme and university, says Aman Aggarwal, who holds an MSc in accounting and finance from the London School of Economics and an MBA from Columbia Business School. Aggarwal spent time talking to deans of the universities he was considering, professors and even four Nobel Laureates, to get their advice on which programme and university would be best suited for what he wanted to learn. He considered the exposure he would get to key financial markets, industry, government and to leading thinkers in his field. He also considered how other schools at the university would benefit him — while at Columbia, he took relevant courses at the Law School and the School of Interna- tional and Public Affairs.
Even if you decide to pursue a more ‘quant’ degree, you could still end up with a more generalist finance career. Amit Sanghani, who holds a Master’s in mathematics of finance from Columbia University, says he leveraged the programme as a “springboard to get into the finance industry”, joining Bank of America after graduating to work in structured finance. He decided to opt for a one-year degree, because “the programme can be covered well in a year”. He does caution potential applicants though: “You only have one year to land the job you want, so make sure that you plan in advance, so that you can start your job search immediately.”
However, if you do want a ‘quant’ job, then an MSc in finance will not get you there. If you have a computer science background, are strong in mathematics and are interested in finance, a more ‘quant’-based career may well be right for you.
Many MSc in finance programmes have no work requirement at all, enabling younger students to apply for MS programmes. However, this is not true for all programmes – the London Business School and Camb- ridge University require that MS applicants have relevant work experience in the finance industry. So, make sure you understand the requirements in advance.
The writer is the CEO of FutureWorks Consulting, www.futureworks.co.in, an admissions consulting firm