by Brian DeChesare Comments (143)

Master’s in Finance Programs: The Best Last-Minute Path into Investment Banking?

Investment Banking Masters Programs

If you don’t succeed the first time around, should you try and try again?

It depends on your reasons for not succeeding the first time around, but most people ignore that point and jump straight to the “try and try again” part.

And one of the most popular methods for getting a “do-over” is the Master’s in Finance (MSF) program offered at universities around the world.

These programs can be useful if you use them correctly.

But most students don’t understand when they’re helpful, which leads to wasted time and money and big disappointments:

Why a Master’s Degree?

Many students and professionals believe that a Master’s in Finance degree is a magical solution for getting into investment banking.

That explains how we get emails like the following:

“I’ve worked in marketing for two years, and I have a B.A. from a Top 50 university in the U.S. I decided to change my career a year ago, and now I am pursuing a Master’s Degree in Economics at a Top 20 university.

I have no experience in finance, but I am currently taking accounting and finance classes. Which area of investment banking should I apply to?”

I hate to be the bearer of bad news, but a Master’s degree is not a great idea in this case.

But first, let’s define a “Master’s in Finance” degree and explain how it differs from other options like an MBA.

What is a Master’s in Finance Degree?

A Master’s in Finance program is shorter, cheaper, and narrower than a traditional MBA:

  • Length: Usually one year rather than two.
  • Cost: Far less because of the shorter length, though tuition still adds up to tens of thousands of USD, GBP, or EUR.
  • Scope: Covers just accounting and finance; classes are more focused than those in MBA programs. You won’t learn about operations, management, or marketing unless it’s a Master’s degree in Management or another, broader area.

You might apply for this degree right after finishing undergraduate, or you might do it after working for 1-2 years.

Applying after 5-10 years of full-time work would not be useful – go for an MBA or skip the degree altogether.

There are also Master’s degrees in other areas, like Economics or Management, but you’re best off with Finance or the Finance track if you want the types of roles featured on this site (investment banking, private equity, corporate development, etc.).

There are exceptions to the rules above: For example, many top European MBAs last for one year (INSEAD, Bocconi, etc.), and some MSF programs last for two years.

Finally, there are some differences between the U.S. and other countries because 4- or 5-year combined Bachelor’s/Master’s programs are more common in the rest of the world.

What MSF Programs Can and Can’t Do for You

MSF degrees are most useful when you’ve decided on investment banking late in the process, but not too late.

So, you have some finance-related coursework, internships, or full-time work experience, but not enough to get into banking out of university.

Here’s a specific example:

  • Useful: You majored in accounting and became interested in banking in your last year of university. You have no IB-related internships, but you did win a Big 4 full-time offer. You’re planning to work there for 1-2 years and use that experience, plus a Master’s degree, to get into investment banking.
  • Not as Useful: You majored in biology, worked in a lab for 1-2 years, and you’re going to apply to MSF programs to make a career change into banking. You were not interested in banking until you started working full-time and got bored with your job.

In the second case, you’ll have no relevant work experience, which is a big problem since you need a sequence of finance-related internships or full-time roles to get in.

An MSF degree would make sense in the second case only if you could complete finance internships before or during the program.

Here’s another example:

  • Useful: You became interested in banking when you were attending university in China, but it was too late to win real IB internships. However, you did complete a corporate finance internship at a local firm. You’ll apply to Master’s programs in the U.S. or U.K., complete several internships, and move into IB from there (a similar story from a reader).
  • Not as Useful: You completed a technical degree in India and worked as an engineer for 1-2 years. You have no finance experience. Now, you want to make a complete career change and apply to Master’s programs in the U.S. or U.K. and get into investment banking from there.

It’s the same problem as in the first example: It’s a big leap to go from no finance experience to investment banking solely through a degree.

Even if you completed an MBA instead, you would still need a pre-MBA internship in finance or something more relevant to have a good shot.

A Master’s in Finance degree helps you with:

  • Re-Branding – If nothing in your background seems related to finance, the degree will move you closer if you also get work experience.
  • Boosting Your Prestige – If you went to a lesser-known university, you could make up for it by completing a Master’s degree at a top school.
  • Access to Recruiters – If you attend a program that offers on-campus recruiting, you’ll have a much easier time winning interviews.
  • Access to Internships – You’ll also have an easier time winning internships before and during the school year if you contact firms and say you’re an incoming or current MSF student at University X.

But there are also some limitations.

For example, you won’t win IB roles as an Associate from an MSF; banks recruit Analyst-level candidates from these programs.

The usefulness of MSF programs also varies greatly by region.

They’re the most helpful in the U.S. and U.K. because of the sheer number of IB roles and because many banks recruit students from these programs.

But they’re useless in a place like Australia because most banks recruit only top undergrad students with Law and Commerce degrees, and post-graduate recruiting is underdeveloped.

The physical location of the university is also important.

It’s easier to win investment banking roles if you’re close to London, New York, or another financial center than if you’re in a small town with only a few local firms nearby.

Finally, if you’re an international student, you have to look up whether or not the degree qualifies for STEM treatment.

If it does, then you can work in the U.S. for 36 months after graduation (the OPT program) without applying for an H-1B visa, which makes it far easier to win job offers.

You cannot necessarily go by the lists of the “top” programs – you have to make sure anything you pick qualifies as STEM.

For example, the Princeton and Vanderbilt programs both qualify, so they are much better options than programs that do not.

The Best MSF Programs

On that note: I am allergic to rankings, but I’ll link to a few lists here.

In Europe, places like LSE, Imperial, HEC, LBS, Esade, IE, and several others offer the best MSF options (the eFinancialCareers list here is a good starting point).

You can find a partial list of the “top” U.S. programs here.

Note, however, that many schools are not on the list because of terminology differences.

For example, the UVA program is well-regarded, but the school calls it an “M.S. in Commerce” and offers a Finance track within that degree, so, technically, it is not an “M.S. in Finance.”

You’ll see that many of the best schools for MSF programs are not Ivy League universities, but are good state schools (UT Austin, UVA, etc.) and Top 20-30 schools (Vanderbilt, WUSTL, Notre Dame, USC, etc.) instead.

Many of these schools have stronger placements into certain industries than others, so you should always look up or request placement stats from the school before applying.

There’s an example for Villanova here.

How to Apply and Get In

It is extremely competitive at the top schools, which is another reason why these programs do not offer a sure-fire path into IB.

For example, the admissions rate at MIT appears to be ~10%; at Princeton, it’s closer to 5%.

These programs aren’t as competitive as Ph.D. programs with ~1% admission rates, but they’re also far tougher than community colleges with ~80% acceptance rates.

So, your GMAT or GRE scores must be high, your personal essays must be great, and you must have glowing recommendations and interview performances.

It goes back to the point I made in the beginning: Master’s programs are appropriate if you became interested in IB too late to get the required internships, but they aren’t a panacea.

We don’t do admissions consulting here, but a few application tips include:

  • Show That You Can Win Job Offers – These programs, especially the ones with smaller class sizes, care a lot about placement stats, so they’re more likely to admit someone who has front-office (or even middle-office) finance experience than someone who is coming in as a total career changer.

If you haven’t had full-time work experience, play up your internships and finance-related coursework. You need to give the impression that you could have won a front-office finance job if you had applied for one.

  • Show That You’re a Real Human Being – Have at least one solid interest outside of work and academics. It’s the same as telling your story in interviews, and your interests, or lack thereof, will come across in admissions interviews.
  • Show That You Can Bring Something Unique to the School – For example, some programs are more research-oriented, so if you have published research, emphasize it (even if you have no intention of pursuing a D.).

What to Do When You’re There

Much of the advice in our MBA-level IB recruiting articles applies here as well:

  • Get Internship Experience ASAP – Many of these MSF programs are full-time, so you’ll have to go for part-time, school-year internships. You should try to take time off before the program to complete a “pre-MSF internship” as well, especially if you’re making a big change.
  • And Maintain Reasonably Good Grades – Now you have two sets of grades, and they both have to be reasonably good.

As with MBA programs, the notion that you can “reinvent yourself” in MSF programs is completely false: You have to prepare for recruiting long before you set foot on campus.

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Master’s Programs: The Ultimate Second Chance?

If you use a Master’s in Finance program correctly, you won’t have to try and try again because you’ll win the offer you want the first time around.

But that only works if you’re the right candidate for MSF programs and you approach the entire process correctly.

Get any of that wrong, and you’ll be back in the “try and try again” camp for a long time to come.

M&I - Brian

About the Author

Brian DeChesare is the Founder of Mergers & Inquisitions and Breaking Into Wall Street. In his spare time, he enjoys memorizing obscure Excel functions, editing resumes, obsessing over TV shows, traveling like a drug dealer, and defeating Sauron.

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Comments

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  1. Hi Brian,

    I just got accepted into a target Masters in Management program in the US. I work as a Fortune 75 Financial Advisor. I have no IB internship so probably can’t get an IB job out of the gate. What jobs should I go for that I can use to lateral to IB after a couple years?

    1. Independent valuation firm, Big 4 firm, maybe corporate development or corporate finance.

      1. At the Big 4, I should go for valuation roles?

          1. Thanks for the advice Brian. What is the job title for valuation roles?

          2. Analyst? Try searching on LinkedIn to get ideas.

  2. Hi Brian, I am a 1st year student at a non-target UK university. I got grades BBC at A level, but I have a Corp Fin internship lined up this summer at a small, local firm. Should I try to leverage my internship and apply for BB summer 2019 internships with such low grades/non-target university, or just focus on getting into a top MSF and breaking into IB that way?

    1. If you’re still a 1st year student, you still have plenty of time, so you should not give up on IB yet. Also, you’d be applying for summer 2020 internships likely next year. You should at least try that and see what happens before committing to a top MSF and spending even more time/money on it.

      1. Thing is, because I’m at a UK university doing a 3 year degree, my penultimate internship would be in 2019. Does this change your advice?

        1. No. Low A-Levels will hurt you, but if you have at least a 2:1 in university, you should still apply for internships. An MSF is only worth it if you got started very late (which is not you since you have the corporate finance internship this year) or if nothing else has worked out.

  3. Thank you very much the article, it definitely relates to my current situation. I’m currently enrolled in an online MSF program, and was wondering if there is any stigma in the industry about web based degrees?

    1. Some, but the bigger issue is whether or not an online MSF program will give you access to recruiters and companies. That’s the main benefit of any degree, including an MSF.

  4. Hey! Great Article and information. What would you suggest to a Swiss citizen student studying Computer Science and Business at a semi-target in England? I have had a spring week insight at a BB and am in line for a summer internship at the same BB. I want to do a Masters in the US to help me break into that region and also want to complete my education.

    Thanks for your help

    1. I’m not sure I understand your question. Your plan is reasonable, and it sounds like you’re already in good shape to work in banking. For international students in the U.S., please see this article for more:

      https://www.mergersandinquisitions.com/international-student-investment-banking/

  5. Hi Brian,

    Great article as always. Unfortunately, I’m in the “pre-med biology degree” category that you mentioned. Graduated in 2015 and I’ve been working as a medical scribe. Long story short, I’ve found the medicine isn’t the right path for me. Since you don’t recommend going into a MSF at least straight away, what would be the most reasonable path for me to break into finance? I was thinking finding any sort of Finance internship. Thoughts?

    1. At this point, you would probably need an MBA to have a realistic shot of getting into investment banking because you’ve been out of school for several years already. You might be able to win other finance-related roles if you can learn the basics on your own and network aggressively. See: https://www.mergersandinquisitions.com/medical-school-to-investment-banking/

  6. I’m thinking of getting a Master’s in finance in Canada.. I have a degree in engineering with 2.9/5 gpa in Nigeria. How do you suggest that I go about it? Thanks

    1. ??? I’m not sure what you’re asking. Apply to various programs, complete the requirements, and… get in.

  7. jake smith

    Brian,

    Thanks for the article. Very useful as I decide whether this degree makes sense. I’d love your thoughts on whether this degree makes sense for me. I gradated with finance degree, 3.1 gpa, from a top 40 semi-target (many of those with 3.5+ and networking are now working at top investment banks). I had a boutique IB internship as a junior, however, I didn’t network in school and ended up nowhere in the recruiting period. I am now almost 2 years out of school working as an analyst at a commercial bank and feel like I am not gaining any skills that I could sell in an interview as to why I’m a good fit for an IB analyst. I am wondering if you think the MSF program could benefit me, assuming a finish with a 3.5+ GPA and network throughout my time? My thinking is that it could give me a chance to somewhat reset on grades and gain the modeling/excel skills that I can sell for an analyst position. I also was wondering if you knew anything about the reputation of the program at the University of Maryland?

    1. Yes, an MSF program could help you, but you need to move quickly because once you go beyond 2-3 years of experience, it’s difficult to win Analyst-level offers. I don’t know much about the program at Maryland, but you should check sites that do rankings and reviews.

  8. Aaron Isakov

    Hi Brian,

    I’m a long time lurker here and your site has definitely helped me out, but I’d like your advice for my situation. I’m currently a graduating senior at a semi target undergrad school, economics major, with only one current internship as a private equity intern at a small search fund. I got into the investment banking game super late because I was shooting for law since I was 15 and realized this December in the middle of my LSAT that I didn’t want to do law, i just wanted to do M&A. Realizing this I was super late to the game and wasted all 4 years working not networking or really applying to IB internships or roles. My background in terms of work experience is that I have a Research position from a FX firm, and a PE internship rn. No job opportunities lined up after graduation this may. I’m looking at MIT, NYU, Columbia, and my current school Baruch for MSF programs but don’t what my next step should be. Any insight into my journey would be much appreciated!

    1. You should apply to those programs, get in, and then complete another internship before it begins or during the program. And then start networking with alumni at banks to win internships. I’m not sure about the timing for 1-year programs because summer internship recruiting for undergrads now takes place over a year in advance… but I assume they can’t possibly do that for 1-year programs.

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