If You’re Not Confident You Can Get Into Investment Banking, Should You Apply to Master’s Programs to Hedge Yourself?
It’s always on your mind, but especially so when the economy is in shambles and shows no signs of recovery:
Plan B.
We’ve looked at a number of different options, from becoming a ski bum to becoming a cocaine addict and moving to Buenos Aires, but today I wanted to focus on one of my most frequently emailed questions:
Should I do a Master’s Program? If I don’t get into investment banking during full-time recruiting, should I go to graduate school instead? Will these programs help me get in?
Are they worth it?
Definitions
By “graduate school” I’m not referring to MBA or Ph.D. programs – those are completely different ball games, and you’re probably not considering them if you’re still in school.
And if you are, think again – getting an MBA to get into finance is only helpful with several years of experience and a Ph.D. is only helpful if you want to be a quant.
In this article, we’re referring to programs that last a year or two and result in you getting a Master of [Something] title, where “Something” is usually related to finance.
Some Answers, Please
The short answer is that these programs by themselves don’t help you, but going to a better-known school and delaying recruiting by a year could definitely help you.
When I went to career fairs at schools, Master’s students would always come up to me and say, “So, once I finish my degree I can start working as an Associate, right? How do I get an interview?”
But that’s not how it works: you don’t come in at a higher level. You’d still be an Analyst or at least starting at whatever the bottom position is called wherever you end up.
Another common question: “So if I do this program, they’ll see that I’m really interested in finance, right? And then I’ll have no problem beating all those guys with PE internships this summer, right?”
The answer, again, is no. It does help incrementally – more so if you were not an economics/finance major – but no amount of classes, school, or training will ever make up for non-existent internships.
So if these programs themselves don’t actually help you, why should you bother instead of just moving to South America for a year?
They help you when you lack either prestige or preparation (or both).
Lack of Prestige
I hate the word “prestige,” but I use it here to mean, “You don’t go to a brand-name school that most banks recruit at” (otherwise known as a “target school”).
We all know that it’s very, very difficult unless you want to spend months cold-calling, going to other schools’ career fairs, and networking with alumni.
It does work, but it’s very time-consuming and you’re unlikely to get into the largest firms like this.
Long-Term Prestige?
But the lack of a brand-name school also hurts you with exit opportunities after banking and business school admissions.
There’s always debate over how much a top school helps you with getting into a top business school, but it never hurts.
And with exit opportunities – private equity especially – firms are distinctly biased toward picking people who have had a track record of well-known names on their resumes.
Yes, you can get in without having a brand-name background, but it’s not common. Even at smaller PE firms, the tendency is to interview based partially on how well-known your school is.
But What About Networking?
Yes, networking works but networking with a well-known school on your resume works even better.
So if you’re serious about finance, then applying to Master’s programs at top schools is a good idea – even if you think you have a good shot at getting full-time offers.
Of course, if you don’t have a shot at getting into top programs due to grades or other factors, then this “Plan B” is not as viable.
Lack of Preparation
Master’s programs could also help you when you’re not prepared for recruiting.
Maybe you just got interested in finance over the summer and you’re about to graduate in a few months; or maybe you’ve had some finance internships but just haven’t had time to properly craft your “story” and figure out what you’re going to tell recruiters.
In this case, it’s still worth going through recruiting because you never know what’s going to happen – and it’s good to get the practice anyway.
Some people underestimate how random the recruiting process is and don’t understand how even tiny details can tip the scales one way or the other. Remember, there’s a reason you didn’t get an interview from JPMorgan.
Time, Not Prestige?
If you’re in this position, you’re after extra time to prepare rather than prestige – you could be after both, but if you’re reading this right now and you’re not at a target school, you’ve probably already done a ton of preparation on your own.
If you just need extra time to get your act together and you already have a brand-name school on your resume, where you go for your Master’s program doesn’t matter as much. You could just stick to your current school and complete a program there, if they offer it.
Just make sure you actually use the extra year to prepare – i.e., don’t sit around playing Wii Tennis and catching up on Lost and 24. Set aside at least a few hours per week to network, work on your “story,” and learn finance if you’re weak technically.
If You’re Already Working…
If you’re already working, a Master’s program isn’t nearly as relevant as an MBA.
Yes, you can re-position yourself with a simple Master’s program but you’ll run into problems when you hit recruiting and have more work experience than everyone else: they won’t know what to do with you.
There’s always debate over how much experience is “too much” if you want to do this, but if you’ve had 1-2 years or less of full-time work, you can probably do a Master’s program if you want to get into finance without an MBA first.
Just be aware that standards will be higher the more experience you have. And if you’re trying to make this type of move, you better have a really good “reason why” you’re now pursuing investment banking when you chose not to right out of undergraduate.
International
And yes, before anyone brings it up I’m aware that outside the US and especially in Europe, it’s common to stay in school for more than 4 years and complete the equivalent of a Master’s program before you even apply to banks.
So if you’re in this situation, the recommendations above are not quite as applicable to you.
But you could always decide to stay in school even longer or complete other graduate programs – in which case, the same tradeoffs apply.
The Bottom-Line
It’s almost certainly a good idea to apply to Master’s programs if you’re an undergraduate right now approaching full-time recruiting in the fall, if only to “hedge” yourself in uncertain times.
It’s like how you always apply to “safety schools” for colleges and business schools, even if you think you have a 95% chance at Harvard.
It does take time, so I would not kill yourself with polishing your applications unless you really have no shot at full-time recruiting.
Any questions?
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Hi, brian
Am a an undergraduate of a school here in Nigeria.with a GPA of about 4.0. After my undergraduate course in Banking and finance. I would love to go futher in my studies but the problem is that i dont knw if an Msc or an MBA would be better. Please advice me were would be better to do my Msc or MBA is it America or London.
MBA is more useful because it is broader in my opinion. I prefer the education in the States but maybe I am biased.
Well here’s my story
I’m South African/British- hold dual citizenship
I’m 19- Doing a BA in English through University Of London.
I may have an opportunity to double major with LSE as it’s a college within University of London and they’re looking at opening this up.
Question: 1) How do you think a Masters/MBA from University of Capetown (Top 60 in the world)would look in America coupled with LSE undergrad backround- would it add an international flair or would Oxbridge/LSE/Top US school be better?
2) I have several IB internship opportunities at Goldman/JP Morgan in South Africa during my holidays- How would Ibanks in the USA look at experience from emerging market branches?
3) Would I have better chance at Asian/Middle Eastern ibanks with the British/SAfrican backround and experiene? – Do people often move around to various countries within iBanks or is that uncommom?
*Assume I do not need VISA/Greencard sponsorship in the USA scenario.
1. Top US school because top US schools have better reputation within America unless you are interviewing w non-Americans I believe
2. Such experience would be useful for emerging market roles based in the States or elsewhere
3. Yes, and yes. And getting a visa in the States is hard these days.
Quick question: Would it be pointless to go for a Master’s in Finance after 2-3 years work experience? For example, at a top school? I am currently working in a government job dealing with the markets and want to get into IB sooner than later thus the interest in the Master’s program. Any help would be appreciated!
Not necessarily. I don’t think the Masters will guarantee you an IB job though
Hey,
I’m doing a Masters in Finance at a target in Britain. I have some work experience.
Would it be looked down upon if I had other degrees too such as Maths & English – from Open University (OU)?
Granted I don’t have to list them on my CV, but I thought I’d ask. Even though OU isn’t a target, would the fact I have a 1st class honours at undergrad as in a non-target (and in the degrees I mentioned) and have a target on my CV with – hopefully – a good grade in the end help?
Or would the fact that OU isn’t a target not help my chances in spite of my Masters being from a target?
OU would not help your chances but if you’re from a target that would help
So if I had a Masters from a target, but side degrees that are relevant i.e. Maths, it would be okay?
Even if the latter would be gained after the Masters?
What being in a target offers you is the network of alumns and access to info sessions which being in a non-target couldn’t offer. Of course the prestige also matters. In your case, having the target on your resume should work but I hope you used the connections/opportunities you had from a target to network w bankers!
Thanks, Nicole!
I did. :P But I wanted to know if adding another degree – part time; OU – on my CV would be deterimental.
Larry: I don’t think it would hurt you necessarily but there’s no point doing it in your case, at least in the context of breaking into finance.
Thanks, Brian!
Though the OU Maths degree is more for interest’s sake as opposed to breaking into finance.
hi,
i am a Mathematical Economics major, from a Canadian University and i was wondering what path for my masters would yield me more advantage in the future? 1) An MBA or a Masters in Finance or Management?
2) Also do you think getting this graduate degree in England would be better than doing it here in Canada? or the States?
I am scared of a Masters in Economics because i don’t know what else i could do with it apart from furthering it to a phd level..which i’m not interested in..
Please any help would be appreciated! thanks!
1. MBA
2. Depends on where you want to work
Thanks Nicole!
I would love to work in Canada.Would it make much difference if i did my MBA in England, then come back to canada to work?
Hey M & I, Right now i’m doing MBA in Bangalore. India. I’m Finance specialization student and my CGPA is 8.2. What would be the best choice for me to break into Investment Banking.. There isn’t a good scope for Investment Banking in India so would you suggest any better programs/internships any where in States or European nations??
Do you have a visa to work in US/UK? Otherwise, it might be difficult
No sir..
Can you suggest any post masters program so that i could get a student visa.
I might read this interview for some tips: http://www.mergersandinquisitions.com/foreigner-visa-uk-ficc-trading/
I just graduated from the university with a BSC in banking and finance,i will like to go my masters degree abroad but most of the universities requirements includes TOEFL or GMAT.please i will like to know if there are universities that accepts only Bsc without having to sit for TOEFL or GMAT and what courses can i do with my Bsc.thanx
We help people how to get jobs in banking, not which university accepts BSc. I can’t help with this one!