Career Advice May 23 2012

Oh, the Decision: M.B.A. or a Masters in Finance?

Are you a natural-born leader or a lover of numbers? Answering that question may help you decide between the management-focused M.B.A. and the more quantitative Masters in Finance degree.

The latter degree, which has grown in popularity in recent years, gives students a serious edge when it comes to high-level finance knowledge, says Heidi Pickett, director of MIT's Master of Finance program, which launched in 2009. "The curriculum has double the amount of finance courses that an M.B.A. non-finance track student would take."

Beyond academics, the two degrees have plenty of differences when it comes to tuition costs and length of study, job offers, and even networking opportunities. But figuring out which of the two pricey degrees is right for you can be challenging, but both promise to land you an on-target job with a hefty paycheck.

If you're looking to go back to school, here's what to know about an M.B.A. versus a Masters in Finance degree:

Navigating the Courses

Long popular in Europe, specialized finance programs are often a year long instead of the two years required for most full-time business degrees. When it comes to academics, it's easy to assume that a Masters in Finance program is just a shortened version of the M.B.A. That's simply not true, says Shane Torchiana, a consultant at Boston Consulting Group, who graduated from MIT's program in 2011. "Given that a significant portion of the [program] is taught at a Ph.D level of rigor--it's very quantitative," he explains. "Unlike M.B.A. students, we spent little time developing entrepreneurial skills or general management skills, improving our communication ability, studying marketing, or taking social impact courses." Business school faculty teach both programs so the quality of instruction is the same.

Tapping the Network

As a relatively new degree, the Masters in Finance has significantly fewer alumni and is not always known by employers, says Matt Gardner, a graduate of Vanderbilt University's MS Finance program, which launched in 2005. At times, getting the attention of companies who traditionally recruit from the M.B.A. program was difficult and Gardner spent more time selling his skills. "It was a little bit of a narrative, but it gave me the opportunity to talk to someone," says the 30-year-old who received four job offers upon graduating last year and now works in real estate development. "As Master of Finance programs get a little more public, that perception will change."

Deciphering Acceptance Requirements

Generally, an M.B.A. is more competitive when it comes to certain admission criteria. Finance applicants are younger and may only have internship experience at the start of the program, while M.B.A. applicants need at least three years of work experience.

"Instead of full-time experience, we may look at the number of internship experiences and the quality of those experiences," says Blake Gore, senior associate director of the Vanderbilt University's Owen Graduate School of Management's Career Management Center in Nashville. Requirements for the Graduate Management Admission Test (GMAT) score are the same for both programs, he adds. With more work experience, students applying to business school tend to be older than students in finance-specific programs.

Acceptance rates are often similar considering the number of applicants and size of the program, says Francisco-Xavier Gómez-Bellengé, associate to the dean, at Ohio State's business school, which started a finance program last year. This year 25% of applicants were admitted to the M.B.A. program versus 27% of students to the finance program, he says.

Comparing Job Placement

At MIT, big name employers like Barclays Capital, J.P. Morgan Chase and Bank of America Merrill Lynch hired Master of Finance students this year. Median base salary for MIT finance graduates is $105,000 compared with $119,000 for M.B.A. While salaries are comparable, job opportunities are narrower in scope. "Graduates primarily focus career opportunities solely with financial service firms or finance positions," MIT's Pickett explains.

"M.B.A.s often serve as formal or informal coaches for our less experienced MS Finance students," Vanderbilt's Gore says. "For example, a second year M.B.A. who is seeking a full-time associate position at an investment bank can provide a great deal of insight, advice, and networking introductions to an MS Finance student seeking an analyst position in the industry."

Figuring Out Long-Term Goals

Targeted finance programs cost less and can be obtained much more quickly than an M.B.A. That also means students are unemployed for a shorter time. For example, the 10-month Specialized Masters in Finance program at Ohio State costs $49,000, compared with about $85,000 for the university's two-year M.B.A. program.

But saving money and time are only parts of the equation. Before you apply, it's worth taking the time to reassess your own career goals and see how they align to the degree offerings. Since both are quality degrees, it's about choosing the right fit. Not sure finance is where you want to end up? Consider the M.B.A. "The M.B.A. core [group of classes] is broader in scope than the MFin, covering accounting, statistics, economics, organizational processes and communication," Pickett says. But if you're simply after extensive finance knowledge, the specialized degree can be a better bet.

Deciding what degree is a better fit can be difficult and varies for each person. But it's a misconception "that one degree is better than the other," Ohio States's Gómez-Bellengé says. "They simply serve needs of different students."

Write to Alina Dizik at alinadizik@gmail.com




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