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June 20, 2011 2:17 am

Behind the numbers: Insights into opportunities for would-be financiers

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The economic downturn and its consequences brought into sharp focus the importance of formal training in finance for professionals in that sector.

As institutions toughen up their entry requirements, those hoping to join this potentially lucrative world will find that specialised academic qualifications are increasingly necessary.

The 2011 inaugural Financial Times rankings of full-time masters in finance programmes seek to provide insights into which educational institutions offer the best opportunities for would-be financiers.

Two rankings have been calculated (based on surveys of schools and their alumni), reflecting a divergence in the marketplace.

One concentrates on the more common “pre-experience” programmes, aimed at students with little or no professional experience.

The other includes post-experience degrees, designed for those looking to develop their careers.

There are 30 programmes in the pre-experience ranking and an evident European dominance.

In total, 26 of the schools are located in Europe, with four in the US. A European School, HEC Paris, takes the top spot.

The French business school’s superiority is, in part, due to the successes of its alumni.

Based on a survey of graduates from the class of 2008, data show HEC alumni were the highest earning of any cohort.

They reported an average salary three years after graduation (exclusive of bonus) of close to $100,000 (based on purchasing power parity equivalents).

Graduates of the Saïd Business School, part of the University of Oxford, were the only other pre-experience group that reported earnings in excess of $90,000.

The Paris based school also comes top in the career progress section of the ranking.

This measures the seniority of alumni, based on their reported job titles.

Comments from HEC graduates underline the career-enhancing nature of the school’s masters in international finance.

“I entered this school as an engineer and I left it as a banker with an excellent overall knowledge of the financial sector,” writes one HEC graduate, who is working as a financial consultant.

The FT report also includes full-time post-experience programmes. This year only three schools are included.

Given the relatively small number of post-experience masters in finance degrees worldwide, as well as the range of delivery options — full-time, part-time, online — creating a ranking of such programmes is more challenging.

London Business School heads the group of three and boasts the highest earners in the entire FT sample.

LBS alumni reported average salaries in excess of $130,000, an increase of 72 per cent compared with before the masters.

An analysis of information collected from participating institutions and the 1,200 responses from alumni gives an indication of the demographics of masters in finance students.

The data also highlight differences between pre- and post-experience programmes.

Unsurprisingly, age is a factor.

The median age of alumni starting pre-experience programmes was 23, five years younger than their post-experience counterparts.

Levels of work experience also differ considerably.

While two-thirds of pre-experience graduates had, at most, one year of work under their belts when they began studying, more than half of those entering post-experience programmes had four year or more.

In addition, students are more likely to be male than female.

For pre-experience programmes, 40 per cent of those who enrolled between April 2010 and March 2011 were female.

This compares with 33 per cent for post-experience degrees.

A handful of programmes buck this trend, with female enrolments outnumbering male at the University of Bath School of Management (73 per cent female), the University of Edinburgh (61 per cent) and Lancaster University Management school (51 per cent).

A gender imbalance is also evident in alumni salary data.

Overall, graduates of pre-experience programmes re­ported an average salary of $65,500 three years after graduation and the average bonus amounted to $29,700.

But for men, the average is $70,600, $15,800 more than the average earnings of female graduates.

This difference may be partly explained by the types of jobs done by alumni — 86 per cent of graduates overall went into jobs in the financial sector, but this figure was lower for women (84 per cent).

Average salaries of alumni in the sector were higher by about a third.

Nonetheless, even when they work in the same sectors, female alumni generally earn less than men.

Differences in pay between the sexes may also be a function of differences in expectations, according to research by Universum, a consultancy.

From a Europe-wide poll of almost 20,000 students, the study concluded that women expected to earn less than men in their first job by an average €8,600 ($12,400).

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