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Are you interested in a career in finance? Confidence has grown in the financial markets, with 51 per cent of global senior managers sharing a positive outlook for 2014, and 53 per cent expecting an increase in salary this year, according to a survey from the Association of Executive Search Consultants.
But is it the best route to take? And which course is more suitable for your interests and needs?
On Wednesday 25 June, a panel of experts answered readers’ questions on this page.
On the panel were:
Kate Lander, head of education for the Europe, Middle East and Africa region at the CFA Institute
Before joining the CFA last year, Ms Lander worked as a transition manager at Northern Trust in London. She is a CFA charterholder and has served as director of the CFA programme at 7city Learning and BPP Professional Education.
Andrew Clare, professor of asset management and associate dean for the MSc Programme at City University Cass Business School
Before joining Cass, Prof Clare was a senior research manager in the monetary analysis wing of the Bank of England. He also spent three years working as the financial economist for Legal and General Investment Management.
Heidi Pickett, director of the Master of Finance programme at MIT Sloan School of Management
Before Sloan, Ms Pickett was senior managing director of global business integration at State Street Global Markets.
Mark Shackleton, professor of finance and associate dean for postgraduate studies at Lancaster University Management School
Prof Shackleton’s research interests include real options, option rate of return, corporate finance, and energy derivatives.
Emma Boyde, FT Business Education Reporter and FT Lexicon Editor
Charlotte: Welcome everyone. Here is the first question.
There has been a lot of debate on whether the CFA will become the new MBA, what are your thoughts on this? Should students first consider a CFA qualification given the choice?
Heidi: I believe there is a clear distinction between the CFA and MBA. In my opinion, they can complement each other depending on your career objectives but in most cases one does not substitute for the other.
The CFA is an excellent qualification for financial professionals, particularly on the buy-side but lacks the leadership development skills that you will obtain in an MBA that are necessary as you progress up the ladder.
Andrew: The two qualifications prepare students for different things. The CFA prepares people to become financial analysts at a bank or to become fund managers. Because of this there is a great deal of technical content to the CFA’s qualification.
An MBA prepares people for a management role in business, including finance. A good MBA is ideal for turning a specialist (like a fund manager) into a more rounded manager capable of managing other specialists.
The two qualifications can therefore be very complementary. This all means that the choice between the two will depend very much on what the person wants from their career and what stage of the career they are at.
Mark: The CFA offers a great specialist training for anyone wishing to enter the buy or sell sides of the finance business. It is structured, ethically/compliance driven, up to date and very competitive to complete.
On average, I would guess that a typical CFA candidate is a little younger than that of an MBA and no work experience is necessary (but could be helpful). Its tight syllabus lends itself to dedicated firms such as Fitch Training (7City) who do a great job. Compared to an MBA, it probably gives a great initial salary uplift over the three years that successful candidates would take to complete it.
While CFA completion will give you a real head start in the finance industry, it makes no attempt to train you for management, only for client and product-facing challenges. It is also unlikely that the finance world will demand as many qualified CFAs as the business worlds appetite for MBA. I think the two qualifications will co-exist and a number of candidates will even gain both.
Kate: I agree with Heidi – there are some major differences between the two. The CFA is very much a “technical” qualification focused on financial analysis. An MBA tends to be broader and more focused on the management side.
In fact, the two should not be seen as mutually exclusive – for some, the CFA may be a good addition as they start out in finance, but an MBA may be more appropriate as they rise through the managerial ranks.
Both the CFA and MBA though can bring great networking opportunities – the CFA through conferences and the Society network, the MBA through classmates and the alumni structure.
Emma: I decided to write this story contrasting the two because some MBA alumni were telling us that when they applied for a job in the finance industry, employers appeared to be more interested in whether they had a CFA.
Clearly, the two qualifications cover different material and if you are intending to go into a management or strategic role the CFA will not help you much.
I am a student in the MSc Management, Information Systems and Digital Innovation at the LSE. I am also a candidate for the CFA Level I. Despite the fact that I lack a degree in finance, can I still be considered for a position in the financial services? I would like to work in investment banking or as an equity analyst. More precisely: Does my degree in management and information systems hinder me? Or would I be able to leverage it as a strength versus the other candidates with financial degrees? ~ Marc-Antoine
Andrew: You are definitely at a disadvantage compared with those people that already have a finance qualification at undergraduate or masters level. However, judging from the title of your degree, you do have a quantitative background. These skills are always in demand in the City. If you can add to these skills with the CFA qualification (or via an MSc in Finance) then you have a good chance of pursuing a successful career in finance.
Heidi: Investment banking is a very tough area to get into and very competitive, particularly since the financial crisis. You will be competing with many candidates with finance degrees which may put you at a disadvantage. If you have not taken finance courses, you may want to consider this if possible.
Also, investment banks continue to hire analysts from their summer internship programme. If you can secure a summer internship role you will have a much better chance of receiving an equity analyst role upon graduation. Good Luck!
Mark: I guess that some employers would like a specific first or second degree in finance (or accounting), but once you can demonstrate mastery of the CFA syllabus, most firms would leave the rest to their in-house training. Your info systems degree would be an advantage if you wanted to research the tech sector for instance.
Kate: The job market is extremely tough but in my experience (and nearly nine years working for a bank), employers are not purely obsessed with what degree you have done so I think you can still be considered.
However, it is important to get some financial knowledge through something like the CFA programme – this demonstrates both competency and commitment. It is also vital to identify what other skills you have to offer – strong communication, quant, IT, etc. In other words, demonstrate how your degree, combined with something like the CFA programme, can offer an employer a well-rounded individual.
Emma: It is hard for me to comment without knowing what other experience and qualifications you have gained. I expect you would need to be ready to explain why you chose the MSc you are studying for right now. Also, I suppose it depends what role you are hoping to apply for.
I am considering doing a Masters in Finance. How do you recommend I go about choosing a course?
Heidi: There are many factors to consider: quality of finance faculty, flexibility of curriculum, employment statistics, location, length of programme, etc. Your background (undergrad major and work experience) will help you determine programmes that may be a better fit for you.
There are plenty of resources, including the recently published FT Master in Finance ranking, that can help you sort through the variety of programmes out there. From there, I suggest you do more research on the programme websites and participate in information sessions and campus visits to determine the right fit for you.
Kate: My advice is to think broad and consider a number of aspects: content, reputation and recognition of the school, location and the peers on your course. Try and also think about a MiF in the context of your long-term career – is that school recognised in the country where you want to work? Is it more focused on one aspect of finance or a generalist course?
At CFA institute, we work with more than 300 universities worldwide who teach a large proportion of our syllabus – this can be useful if you want to go on and sit for the CFA programme at some stage of your career.
Andrew: If you’re thinking about undertaking a Masters in Finance, and therefore thinking about forging a career in the finance industry, I would focus on two things. First, the curriculum. Is it up to date? Does it include courses on new areas of finance, for example, alternative investments, credit derivatives, etc?
Second, the faculty. What experience in the finance industry do they have and what links with the industry do they have currently? The finance industry moves rapidly, unless the curriculum is up-to-date and the lecturers are on top of industry developments, the course may not deliver what you need.
Mark: As with an MBA, I would consider the network that you would be joining when starting a Masters in Finance. Apart from immediate job openings, a good set of contacts is key in any career. Location is also important, especially in finance where financial centres still reign, but with increasing online provision that will be overcome in time.
I am a computer engineer that has been working in banks for three years now, with exposure to risk and market data, but I want to move closer to financial roles, leaving pure IT a bit on the side. When I apply for jobs, I have the impression that employers only see me as “an IT guy”, even though I have a masters degree in banking consultancy and I just sat for the Level II CFA exam. I believe learning on the job is the most important part of learning, but until I can move to the desired position, I was thinking about pursuing a masters degree in financial engineering/quantitative finance. Got any advice about schools in Europe? Given my background, what would be some typical positions I could realistically pursue? ~ Alfonso
Kate: Through your masters degree in banking consultancy and the CFA programme, you have already demonstrated a strong commitment to learn about finance and picked up a valuable knowledge base; pursuing a further qualification might add more knowledge but be mindful it will not overcome the “experience gap”.
My advice would be to try and focus on “incremental” steps rather than leaps – i.e. try and find roles still in technology that move you progressively towards the front line, rather than making one big step. It might take longer, but it will also help you get a better idea of whether it is a long-term path you really want to pursue.
Without knowing too much about your background it is hard to define a good role. Maybe something like a business analyst role – assessing IT projects within the business.
Andrew: At Cass Business School in London we offer a range of specialist finance masters courses, part-time and full-time, that can help students make the leap from “an IT guy” to “a finance guy”.
Our position at the heart of the City of London also means that during their time with us, students have plenty of opportunity to meet and network with financial firms who see each student primarily as “a Cass student”.
After that, the career any student pursues in finance is really up to them. Other universities offer similar courses, but I’ll let them speak for themselves!
I graduated two years ago with a degree in financial maths from the University of Sheffield and unfortunately obtained a 2:2 grade. In terms of applying for graduate roles in anything, I require a 2:1 grade in any discipline to even apply. I have a keen passion for finance and in 2013, after no luck in the job market, I decided to enrol on the CFA programme; I passed Level I and the IMC in December 2013 and I have just sat CFA Level II. I have been through recruitment companies and they all say that my CV is good but either “I lack experience” or “I am too overqualified”. I then went to the HR teams that select candidates for their grad schemes and they cannot see past my 2:2 grade. It’s very frustrating as I have pretty much hit a huge brick wall. Please can I have some advice? ~ VB
Kate: Unfortunately the job market in extremely competitive and firms are inundated with applicants, so it is inevitable they use certain parameters to review CVs. It may be that you need to take a role slightly away from your preferred position in order to get some experience to “compensate” for the degree grade – maybe in a sector which supports the finance industry.
Mark: Firstly, although you would like a job asap, you seem to be progressing your training very well on your own. I really hope you get CFA Level II, if so you should definitely push through for Level III, then many of the comments you have encountered will stop.
What you have found is the screening process in place due to the very high number of applicants who want to enter finance. An MSc would help but I would only do one if you have the interest and want the degree itself.
Heidi: Unfortunately you are a victim of a very competitive market right now. It is hard to give you specific advice without knowing your background (i.e experience since graduating) and what roles you have been applying for. Perhaps you can consider a two-step process to get to a true finance role by obtaining a supporting role in a financial organisation first and then moving over.
Another thought is to explore finance roles outside of the finance industry such as corporate finance roles in other industries. You may have more success and still have an exciting career using finance skills.
I am a software professional with seven years of work experience looking to switch my career to finance. I have started with CFA, applying for Level II this year, but unfortunately I will not have the qualifying work experience to get the charter. What is my best avenue to switch to finance? An MBA is way too expensive for me ~ Rodan
Mark: If you are successful at Level II, I would expect a job offer to come your way. There are also masters aimed at converting tech skills to management. I know MBAs (and MiFs) are expensive but there are part-time options which mean that you don’t have to leave your current role.
I am a graduate in commerce with a major in finance. I wish to study and work further in the field of finance. My questions are: What is the scope of (pre-experience) Masters in Finance these days in the corporate world? What advantage or disadvantage would I have if I go for a Masters in Finance over those who have their MBA in Finance? Would a Masters in Finance provide an added advantage if I am also pursuing CFA? Where do you think the growth is expected to be concentrated in the coming few years for Masters in Finance graduates – in the US , European or Asian region? ~ Aparna
Heidi: A Masters in Finance over an MBA in Finance tends to provide more quantitative and technical training. Certainly, completing a Masters in Finance along with a CFA qualification is a powerful combination that will benefit you in the job market. I see growth in all of the regions you mention, though I still believe there are more opportunities in Asia for Masters in Finance graduates.
Mark: An MBA in Finance is closer to an MBA than an Masters in Finance. Both are valued in the corporate world. Asia has seen the greatest growth in financial jobs as its economy and service sector catches up. Although they cover similar material, the Masters in Finance and CFA are complementary in the sense that the CFA is applied and focused whereas Masters in Finance are more conceptually driven.
Although I teach on the latter, it would take me many more hours of preparation to successfully sit the CFA as many contributors have; hats off to you guys!
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