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The Changing Scenario of Management Education in India
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It is crucial to make the right choice

By Kavita Singh

Planning to pursue an MBA abroad? Should you consider pursuing a Masters in Finance rather than an MBA in Finance?

I have come across a number of potential applicants to universities abroad who either are unaware of what a Masters in Finance is or assume that an MBA with a specialisation in Finance is a better option no matter what you want to. While both degrees could lead you to the same job or career, they don’t necessarily do so. It’s well worth exploring which option is really better for you if you are planning to study abroad. When you pursue these degrees abroad, the programs themselves, career options and the return on your investment can be different when you pursue them in India – so here’s an overview on what programs and career options are when you study abroad.

So what exactly is a Masters in Finance? If you have looked into pursuing an MSc in Finance abroad, you may have come across other degrees that sound similar such as a Masters in Mathematics of Finance, a Masters of Financial Engineering or a Masters in Computational Finance. Several aspects of these courses overlap. So what’s the difference?

The 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 the other programs aim to train "quants" – namely specialists in derivatives, fixed income, alternative financial instruments and risk analysis.

These ‘quant’ programs are different from a Masters of Financial Economics, which focuses on theoretical finance and on developing models and theory. The nature of this degree differs by university, 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.

Given this, it is advisable to evaluate the program at each university you are considering to determine the key focus areas – don’t just look at the name of the degree. Carefully consider your learning objectives and career goals before picking the program and university, says Aman Aggarwal who has an MSc in Accounting and Finance from L.S.E. and an MBA from Columbia Business School. Mr Aggarwal spent time talking to Deans of the Universities he was considering, Professors and even four Nobel Laureates to get their advice on which program 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. Further, he considered how other schools at the university would benefit him – while at Columbia, Aman took relevant courses at the Law School and the School of International 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 Masters in Mathematics of Finance from Columbia University, says he leveraged the program 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 program 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 programs have no work requirement at all, enabling younger students to apply for MS programs. This is of course different from an MBA degree, where the average work experience tends to be about 4-5 years. So if you want to get into the finance field immediately, a Masters in Finance may be a good option for you. However, as this is not true for all Masters in Finance programs – London Business School and Cambridge University requires that MS applicants have relevant work experience in the finance industry – make sure you understand the requirements in advance. Amit refocused his courses doing his last year of his undergraduate program to fulfil the academic requirements for Columbia University.

So how does an MSc differ from an MBA with a specialization in finance? Both degrees can lead you to positions in investment banking and corporate finance. However, MBA programs have a broader management focus with an emphasis on leadership, while an MS degree enhances your knowledge and skills in specific area which then, enhances your career and job potential in that specific area. So it is important to have a clear sense of what type of finance job you want and what career track you are looking to follow. Talk to people in the industry to understand the difference in these job functions, to help you assess what career path you want to pursue. And start planning early in college, so that you have time to explore which career and degree is most suited for you.

 

The author is an MBA graduate of Columbia Business School and holds a BA (Hons) from Oxford University. She has over 13 years of experience working in the U.S. and India and is the CEO of FutureWorks Consulting, www.futureworks.co.in, an admissions consulting firm.