If You’re Not Confident You Can Get Into Investment Banking, Should You Apply to Master’s Programs to Hedge Yourself?

588 Comments | Investment Banking - "Plan B" Options, MBA & Master's Programs - Using the Degrees to Break Into Finance

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Crossing out Plan A and writing Plan B on a blackboard.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?

About the Author

is the Founder of Mergers & Inquisitions and Breaking Into Wall Street. In his spare time, he enjoys learning obscure Excel functions, editing resumes, obsessing over TV shows, and traveling so much that he's forced to add additional pages to his passport on a regular basis.

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588 Comments to “If You’re Not Confident You Can Get Into Investment Banking, Should You Apply to Master’s Programs to Hedge Yourself?”

Comments

  1. LR says

    I have a question if any one can help me. Between LSE and LBS, What university for a masters in finance would be more prestigeous worldwide and is more reputable ?
    Thanks

  2. Raghav says

    Similar question. Please suggest if SUNY Buffalo for MS in finance is a good degree and placements opportunities further :)

  3. RAVEESH says

    Hi ,
    I am an Engg grad with 1 year Consulting experience . What are mychances to get into an internship program at Barclays , Morgan Stanley ? Should I apply ?

  4. Charlton says

    I literally completed my undergrad last week and you could classify me as one of those who realised they liked finance a little too late. I’m considering a Master’s because I haven’t gone to a target school, neither do I have an acceptable GPA (the bad grades in management offset the good grades in finance).

    Personally, I believe that a Master’s will help me re-brand myself and give me a shot at networking with BB bankers whilst inflating my GPA.

    I’d like to know whether I’m correct or just swinging in the dark. Any help would be deeply appreciated.

    • M&I - Nicole says

      Yes a Master’s program at a target school can help you rebrand yourself and increase your chances of breaking into IB.

      • Sam says

        I’m in a similar situation and I’m not sure what to do.

        I graduated Cornell with a degree in labor relations. The only jobs I can get at this point are in HR or something labor/legal related. I’m one of those “realized too late” people.

        My issue is that I underperformed during my undergrad and got a 3.0 which is far below the median GPA for most masters programs. I also can’t really afford to go anywhere else except for New York State public colleges like Baruch, SUNY Buffalo, etc. (If I can even get into these programs).

        If I did get into one of these programs, the “prestige” factor that you mentioned wouldn’t be in my favor since Cornell significantly outranks any of my potential masters programs. Cornell has one of the best undergraduate business programs (Dyson) and a very reputable graduate program (Johnson) – so I’m afraid going to a “less prestigious” school after already graduating Cornell would raise some questions.

        I could easily self-teach myself most of the finance stuff I need to learn. (I already have started teaching myself, which is why I know I would want to pursue a career in it). But that poses a problem I wouldn’t have a good way of proving my knowledge to recruiters.

        Any advice?

        • M&I - Nicole says

          In this case, I wouldn’t go for another masters program. Focus on networking with alumni and see where that takes you.

  5. Jesse says

    I’m not from the US/UK so I’m not sure what to search for, but is there a list of prestigious/target schools that offer the 1-year MSc in Finance type of masters? I’m planning for my timeline in terms of GMAT prep, exam dates and application deadlines. The only schools that I’ve heard of are the “Ivy Leagues” but those only seem to offer MBAs and not MSc in Finance degrees. What schools should I look at that can effectively rebrand myself, assuming that difficulty of admission is not a factor?

    • M&I - Nicole says

      LBS has a strong Masters in Management program I believe. You may also want to check out INSEAD, Warwick, etc.

  6. ProspectiveMonkey says

    Hello,

    I’ve looked up some master’s programs but I can’t seem to find any requirements for entry. I don’t know much about master’s programs but I noticed you said Princeton was one of the best. On Princeton’s website I couldn’t find any admission requirements or acceptance rates. Do you just enroll then automatically get accepted? I’d just like a little clarification as to how it works.

    Thanks for your help here,
    -Ryan

    • says

      It’s really outside our area of expertise, maybe check out sites like poetsandquants.com or Master’s-focused sites. Not familiar with the admission requirements. You definitely DON’T just get accepted automatically (when does that ever happen?).

  7. shubhang misra says

    Hey,

    I ws confused between the msc in finance and msc in management courses… would both the programs be good enough for getting into ib?

  8. Ekemini says

    Hi,

    I have just over 2 years of work experience (I work with the Central Bank of my country), just passed CFA level 2 exam and got an admission into IE Business School in Spain for the Master in Advanced Finance (MIAF) which starts in January. I do not have any investment related experience but have a lot of grasp of the concepts and intend to use the MIAF program to break into IB. How would you rate my chances plus will IE help me achieve this (the rankings are good but I want more inside information).
    Thank you.

    • M&I - Nicole says

      Yes IE can potentially help you; I think you’d have a better chance on the buy-side given your CFA experience.

  9. Kumar says

    Hi,

    1. I was wondering what would be best for getting a SA internship at a BB IB, a BBA at the Ross School of Business or a Masters in Management at Ross. I ask this because right now I could get and economics undergraduate degree and Masters in Management from the University of Michigan in 4 years, or I could spend 4 years getting both a Ross BBA and BA in Economics.
    2. Also is the University of Michigan considered a “target school”? If so does this include their economics program or only the Ross School of Business.

    Thank you.

    • says

      1. I don’t think there’s a huge difference, but earlier is better with internships. Ross is significantly better than UMich as a whole for finance recruiting.

      2. Technically, yes, but in reality Ross has much better access to recruiting than the school as a whole. So you are much better off if you complete a degree or program from Ross.

  10. JT says

    Hello! I’m curious about a future in Investment Banking. I am currently going to Business School in the Dominican Republic (college is called PUCMM).

    After that I plan on moving to Miami and getting a Master’s of science in Finance at University of Miami.

    I’m wondering if this helps me achieve Associate or does it even get me in the door of iB?

    • M&I - Nicole says

      Having the relevant work experience and network from a target school will most definitely help. In your case I’d focus on gaining relevant work experience in finance.

      • JT says

        Thanks for your reply! Another thing I forgot to mention was that I plan on joining the Navy Reserves as an Officer when I move out to Miami, do you think that has a positive boost on chances of landing in iB?

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