Ranking Master’s In Finance Programs

Cash Man

The Financial Times Ranking of Masters in Finance Programs

 

Don’t want to spend two years in business school? Looking to focus on one specific area of the business? If that’s the case, you may want to join the growing legion of students enrolling in specialized masters programs.

According to the 2014 Prospective Student Survey, the Graduate Management Admission Council found that 20% of all GMAT test-takers were focused exclusively on a specialized masters. That was up from 13% over the previous year (with test takers devoted to the MBA declining from 55% to 53%). Even more, it was female candidates driving this trend, outpacing men 27% to 15% among those targeting a master’s degree.

For many, the appeal is obvious. Let’s start with the commitment, which is usually 12-16 months, as opposed to a two-year MBA (making it less costly in many cases). Master’s programs also require less work experience and allow students to play to their academic strengths. Plus, certain disciplines, such as finance and human resources, require more in-depth technical knowledge than areas like marketing or management. And there’s no better program for preparing students for the three CFA level tests than a Master’s in Finance.

Of course, master’s programs also carry distinct disadvantages compared to MBAs. For starters, an MBA’s broad-based curriculum exposes students to all facets of business operations, producing more well-rounded employees. In fact, MBAs can receive in-depth training in certain areas, such as finance or logistics, giving them the best of both worlds. Most important, MBAs enjoy greater flexibility, whereas a finance specialist also risks being pigeonholed in their role, even as their career progresses.

Make no mistake: A Master’s degree in finance is a valuable credential in the business world. And that’s especially true in finance (and particularly true overseas). For the latter, consider this study by eFinancial Careers, which shows the degree being quite helpful for entrance into the investment banking sector. That said, the salaries are significantly lower than they are compared to starting offers for graduating MBAs. According to the Financial Times, graduates were earning an average of $64,000 three years after graduation (with American graduates averaging $87,000). How does that compare to MBAs? At the top 50 American MBA programs, starting salaries range from $87,198-$138,346to start.

Advantage MBA.

This past week, the Financial Times released its annual ranking of Master’s in Finance programs, a largely European-centric list because many U.S. schools see little reason to participate in this beauty contest. The publication conducts two rankings: Pre-experience (programs where students possess little to no background in finance) and post-experience (programs comprised of students who have already worked in the financial sector. It’s interesting to note that U.K. pre-experience programs represent 31% of the ranked list, while U.S. pre-experience programs represent only 17% of the ranked list, especially since New York and not London has long been the financial capital of the world.

In any case, here is how schools become eligible to be ranked. The Financial Times’ surveys to alumni of participating schools must be answered by at least 20% of the alums with a minimum of 20 responses for a program to be ranked. This year, the FT surveyed 4,120 graduates from pre-experience programmes and 433 graduates from post-experiences programmes. The two surveys achieved a response rate of 42% and 39%, respectively.”

Some 55% of the weight in the survey are on six criteria, including salary, placement, and international mobility. The remaining 45% comes from school-provided data such as “diversity of teaching staff, board members and finance students, according to gender and nationality, and the international reach of the programme.”

For the fourth consecutive year, the London Business School topped the list of post-experience programs. Their graduates earned $129,741, on average, within three years of graduation. In surveys, the school ranked #1 for fostering career progress and providing value, while ranking #2 in career services (“placement”) and aims achieved. The University of Cambridge, which was unranked last year, jumped to #2 in 2014, with graduates earning $119,992 after three years. Two American programs – the University of Illinois and Florida International University, ranked #3 and #5 respectively.

Among pre-experience programs, HEC Paris ranked #1 overall, placing #1 in the value survey. Here, graduates earned an average of $90,798. Esade, Edhec, Essec, and IE Business School rounded out the top five. MIT Sloan ranked as the top American school at #10. However, it posted the highest average salary among pre-experience programs at $106,502. Boston College, which ranked #21 on this list, produced the second-highest salaries at $94,750.

To see the Financial Times’ Masters in Finance rankings, check out the next page.

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  • jackofalltrades

    Great perspective into this specialist degree. Any reason why NYU Stern/HKUST and INSEAD’s masters degree in finance programs are not included in the post-experience list? Can it be because they are relatively new programs in the market?

    On another related topic, I would like to clarify the statement regarding the MBA having the best of both worlds. Since I have had first-hand exposure to both the full-time MBA and a specialist finance degree, I would say the latter gives you deeper, more practical, and a wider breadth in the field of finance than any MBA (even though there is a focus on finance) can ever give you. Some of the cases may be the same, but the depth of discussion and focus on actual calculations put the specialist degree a few notches above the generic degree. In an MBA, a non-finance person is able to squeak by the course without any major hitches, while a specialist degree actually makes you do the work, to the point that you are able to absorb different angles of a particular theory.