MBA in Finance
For those seeking a career that deals with money, an MBA specialization in finance can prove to be invaluable. It is a career field which requires one to possess skills in mathematics, economics, and financial theory, all of which are covered in great detail in a finance degree, specialization or track.
An MBA in finance balances mathematical rigor with management classes, and can be a good way to direct your career towards c-suite jobs in finance. As well as what you learn in the classroom, you will be able to undertake a finance internship (at most schools) allowing you to expand on your MBA while actively researching whether or not a career in finance is right for you.
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What does a finance MBA cover?
A finance MBA prepares students for careers in:
- * Accounting
- * Financial planning
- * Banking
- * Corporate finance
- * A number of other careers in, and closely related to, the financial sector
Since you’ll be dealing almost exclusively with numbers, mathematics is an essential part of any finance degree. Courses focus on investment, investment strategy, local and global economics, mergers & acquisitions (M&A), corporate risk & insurance and financial theory.
Finance MBA courses/curriculum
While courses vary from school to school, finance MBAcourses typically include:
- * Corporate investment management
- * Portfolio management
- * Hedge fund management
- * Small business and corporate finance
- * Coverage of global financial institutions, valuation, volatility, fixed income securities, international markets and macroeconomics
Typical coursework and projects include financial modeling, global macro and micro economics, private equity projects, stock market pitch projects, entrepreneurship projects based in mergers and acquisitions, real estate investment, development and design, and investment strategies.
International economics programs will, obviously, require a bit of international travel. The Wharton School, for example, has campuses and programs in conjunction with other business schools around the world, which makes it very accessible to anyone who is looking to take their MBA in finance onto a more global setting in their future endeavors.
An MBA in finance or a specialized master’s degree?
An MBA in finance will prepare students for senior level and management jobs in the financial sector, with courses focusing more on management, communications, marketing, business leadership and organizational behavior. Almost all MBA programs require the GMAT or GRE for acceptance.
An MSc in finance, on the other hand focuses more on technical and operational competencies, with classes such as linear algebra, differential equations and multivariable calculus taking precedence over management skills.
Generally, an MBA in finance is geared more for leadership positions in the financial sector while an MSc in finance – generally more targeted at pre-experience candidates as well as those looking to move into specialized technical roles – is better suited to candidates moving into operational functions. Where an MBA in finance might pave the way to a CFO or hedge fund manager role, an MSc in finance might be appropriate for actuaries, economic theorists, economic behavioral modeling and financial analysts in the making.
Finance MBA prerequisites
A strong background in mathematics is required for an MBA in finance, on top of the usual communication and managerial skills demanded by the MBA qualification as a whole, and a minimum of two years of experience for entry to most schools.
Finance is an ever-popular discipline, so getting into a top school will require a competitive GMAT score. Average scores for top business schools can be well in excess of 700 (in North America in particular). Since finance programs are looking for the math savvy, most schools are looking for quantitative section numbers in the 40-60 range; Wharton, for example, has an average quant score of 47.
MBA in finance vs. finance courses in an MBA
Every school includes at least a few finance courses in their core MBA curriculum. These are generally quite broad overviews that give students the skills and vocabulary they need to communicate in the finance sector, monitor the finances of a company and generally ensure a firm remains in rude financial health.
From this base, courses then tend to move on to more advanced topics such as financial analytics, financial policies, macro and microeconomics, and business transactions such as hostile takeovers and mergers & acquisitions.
An MBA in finance covers these broad areas but will also delve deeper into the ideas that these subjects touch upon. Classes cover areas such as securities, hedge funds, international finance, international financial markets, risk management, portfolio management and small and large business finance.
Specializations within finance
While an MBA in finance typically prepares graduates for a broad range of careers, some business schools offer a deeper specialization for those with a particular field of interest in mind.
A Certified Public Accountant (CPA) specialization allows holders to practice accountancy as an individual, or as part of a corporation. Many independent CPAs deal with tax services, personal wealth, personal investments and smaller amounts of money on the private side. When working for a larger firm, the CPA specialization means that certificate holders will operate in the financial arm of the company, particularly with taxes, corporate money, wealth management and other investment and monetary based roles.
The Certified Financial Adviser (CFA) works both publicly and privately with either individuals or companies to help them make wise investments and purchases, build investment portfolios, and generally manage their money.
A Certified Management Accountant (CMA) handles almost all of the financial aspects of a company, from forecasting the profit margins of specific projects to advising directors on the best means of achieving financial growth and protecting their company from potential risk.
International finance is not only a huge sector, but, according to the QS Jobs & Salaries Trends Report 2014/15, a growing one as well. Specializing in this field opens up opportunities in international investment, banking and taxation, as well as allowing international financiers insights into developing markets.
Financial economics focuses more on microeconomics in terms of optimization, equilibrium and comparative statics. This specialization is more observational, looking at the models of how producers and consumers function in a given economy.
Corporate finance is where most finance MBAs will be looking to end up, as a fund manager for instance, or financial personnel manager. Topics within corporate finance are typically focused on how to grow the corporation’s capital by means of mergers & acquisitions, financial forecasting, managing investments and managing investment strategies.
Top Business Schools for Finance
The US and UK dominate the Global 200 finance MBA rankings, collectively laying claim to just over half of the top 50. India and the rest of Asia also do well. Three of India’s IIMs feature in the ranking, with IIM Ahmedabad in 11th, IIM Bangalore in 16th and IIM Calcutta in 19th position. Singapore is the next strongest Asian performer with INSEAD (6th) and NUS (17th) both placing inside the top 20.
Table-topper Wharton has long been considered to be a powerhouse in finance. London Business School sits in second place and also boasts an established reputation in finance – unsurprising for the leading institution in one of the world’s financial capitals. The rest of the top 10 consists of:
Chicago Booth (3rd): Booth has had seven Nobel Prize winners in its history, more than any other business school in the world.
NYU Stern (5th): Located in Manhattan, just minutes away from Wall Street, the heart of finance in the US (and, as some would say, the world).
Columbia Business School (6th): Also in New York City, is one of the oldest business schools in the world, having been founded in 1911.
INSEAD – Singapore (7th): Can also boast a prime location for financial services, and works in conjunction with Wharton for some electives.
IE Business School (8th): Based in Spain, making it the highest-ranking school in continental Europe.
Stanford Graduate School of Business (9th): Can lay claim to alumni such as Nike’s cofounder and chairman, Phil Knight, and GM CEO, Mary Barra, (the highest-placing Fortune 500 company to have a female CEO at its helm).
Kellogg School of Management (10th): A truly global business school with campuses in Germany, Hong Kong, Israel and Canada – though its main base of operations is in the Chicago area of the US.
Careers in financial management can vary from business to business, but financial management careers typically include asset management, corporate finance, investment banking, sales and trading, personal finance and insurance.
A financial advisor, as the name suggests, advises individuals and corporations on how to invest their money wisely. Financial advisors typically command salaries in the range of US$65,000, but top earners can pull in around US$160,000 – plus, of course, healthy bonuses. Their duties include meeting with clients, managing investment accounts and researching other investment portfolios and opportunities.
A career as a financial analyst often necessitates close contact with the stock market - analyzing stocks and investments, looking for optimal times to invest and the best stocks in which to invest. This also means meeting with companies or individuals to go through their wants and needs in order to lay out an investment strategy for them. Average salaries for financial analysts are in the US$75,000 range with the top 10% looking at salaries of almost double that, at around US$140,000.
Financial planners help individuals and companies to plan their financial futures through budgets and financial goal setting, working with financial advisors, investment managers and mutual fund companies. Salaries for financial planners range from US$35,000 to upwards of US$100,000.
Finance officers have wide-ranging job duties that depend almost completely on who they work for. Most work for banks, finance companies and credit unions, or other companies that deal almost exclusively with money. Duties and titles range from president, CFO and vice president to loan officer, controller and securities trader. Salaries for finance officers are commonly in the US$100,000+ range and companies typically require an MBA, MSc, or other master’s degree in finance.
Investment bankers work with their companies or clients to build strong stock and bond portfolios in order to help make their company’s or client’s securities grow. While investment banking is known for its long hours and rigorous, competitive workload, compensation is typically above US$100,000 and, in many cases, upwards of $150,000.
Other career options for finance MBAs
There are a lot of other ways you can use your degree outside of overtly finance-specific fields. The math and accounting skills that are taught in advanced finance courses might not translate directly to other fields, but the analytic and strategic thinking they hone can easily be transferred to marketing, general management – especially managing accountants and other financiers – and entrepreneurial activities.
The finance sector enjoyed an 11% rise in new opportunities in 2014, according to the QS TopMBA.com Jobs & Salary Trends Report. This is a marked recovery from the 3% drop seen in 2012. Average earnings for finance MBA graduates according to WealthScale.com are around US$115,000, with chief financial officers coming in as the highest paid at US$222,908 and senior financial analysts earning salaries at around the US$82,000 mark.
An internship while pursuing your MBA in finance can be a great step towards both improving your résumé and opening the doors to a top company. Forbes’ ranking of finance internships includes companies like Evercore, Northwestern Mutual, Houlihan Lokey, PwC, and Capital One – the big names you might expect to see. Since many of these companies have multiple locations across the globe, an internship might be the perfect way to get a bit of international experience as well.
Interns are typically responsible for assisting the accounting team or finance department with audits, balancing a company’s books, forecasting, data entry, and financial reports. As MBA candidates, they are also expected to take on managerial duties, such as working with senior clients, developing proposals, helping to develop junior bankers or investors, managing transactions every step of the way as well as problem solving as challenges arise.
Companies hiring finance MBAs
Almost every company has opportunities in finance. But, of course, many students will undertake an MBA in finance with the goal of working for a purely financial institution. Goldman Sachs is one of the biggest names in this regard, and hires MBAs into its investment banking and private wealth management sectors: “Goldman Sachs looks for MBA candidates who are well rounded with a diversity of experiences, have strong problem solving skills, are innovative thinkers and are intellectually curious,” says Leslie Shribman, a Goldman Sachs spokesperson adding: “Those who wish to work at Goldman Sachs should have a genuine interest in learning more about our industry and our firm, and be able to articulate why they want to work here and build a potential career in this industry.”
A finance internship, as mentioned above, is a great way to segue into a full-time job, with many of the aforementioned companies hiring directly from their pool of interns. According to GMAC’s latest hiring report, the amount of companies hiring finance MBAs is on the rise across the board.
MBA careers for different specializations within finance
If you chose to specialize in a particular aspect of finance during your MBA program, it will almost certainly be with the goal of working in that specific area. There are plenty of options for those that have their CPA, CFA, or CMA certificates in both the private and public sectors; the very reason why the specialized courses exist!
Moving into a financial career
Switching careers is a popular reason for pursuing an MBA and moving into the financial sector from either elsewhere, or changing specialties within the industry as a whole, is indeed one of the most popular reasons that people choose to pursue the degree.
The structure of the MBA classroom makes it the perfect place to get to grips with the relevant mathematical functions and ideas required in the financial sector, and will help career switchers to be able talk the talk – a prerequisite in this competitive sector!