by Brian DeChesare Comments (380)

Degrees and Certifications: Got CFA + JD + MBA + MD?

Degrees and Certifications: Got CFA + JD + MBA + MD?

Despite my best efforts to bash certifications and give snarky responses to related questions, there’s still confusion on what banks care about, what you can do with different degrees, and the meaning of life.

While I can’t help with the meaning of life (42?), I can tell you which degrees and certifications mean something and help you break into finance – and which will not.

Why the Hate? You’re Already Biased!

I’ve seen lots of aspiring bankers use degrees and certifications as a distraction from more important goals, like getting solid internships, networking, and even getting leadership roles in groups.

You may also think that degrees and certifications are a magic bullet: sure, you have a 2.1 GPA from an unknown school and you’ve worked in telemarketing for 5 years, but if you get that Bloomberg certification, Goldman Sachs will give you an offer right away, right?

Maybe I should get into the business of selling certifications with logic like this…

The Usefulness Of Qualifications Varies By Field

The usefulness of degrees and certifications varies widely by the field of finance you’re interested in.

For example, if you want to be in risk management then the FRM exam is essential; if you’re doing portfolio management or equity research, the CFA is viewed as a requirement. And bankers, of course, don’t care about either of those.

I’m focusing on investment banking and private equity here because that’s what this site is about and what you’re interested in if you’re reading this right now.

For more on other fields and where certifications might be useful, check out these articles from Bionic Turtle:

5 Degrees Above Zero

Let’s start with degrees since they’re less painful to write about.

The only degrees that banks care about are Bachelor’s, Master’s, and MBA degrees, and only for very specific reasons.

But just for fun, let’s jump through the entire list and learn why – and what to do if you’ve taken the plunge into JD/PhD/MD land.

High School / Secondary School

Please, no more questions from 16-year olds who want to get an investment banking internship. Go outside and play in the sun, you’re probably Vitamin D-deficient anyway.

This one is just a check-the-box requirement at banks, and if you’ve only graduated high school you won’t be able to do anything real – you need at least an undergraduate degree (maybe you could work as an assistant but is that what you want to do?).

Your actual performance in secondary school matters more in countries like the UK where A-Levels are huge – in the US, listing high school grades or AP scores on your resume when applying to banking jobs is silly. And where you went to school only matters if it’s somewhere prestigious, like Exeter or Andover, where you might get some networking benefit.

University Degrees

This is the bare minimum you’ll need to actually work at an investment bank, and most other finance firms.

Every week I get comments asking, “I’m 38 and never graduated from college – do you think I can become an investment banking analyst?”

No, you can’t.

Why not?

  1. Supply and Demand – Banks have so many university graduates who’d give up a kidney to work for them that they can afford to reject 99% of applicants and still have more people than they know what to do with.
  2. Work Ethic – If you can’t finish a university degree then banks will assume that you cannot finish any project, which is a problem when you have a 100-page pitch book due in 3 hours.

Yes, I know there are good reasons you didn’t get a degree – you dropped out to start your own multi-billion dollar company, you couldn’t afford college, or you became a pop star and you’re still on leave.

That’s lovely, but life is not fair and if you don’t have a degree you’re not getting into investment banking or private equity.

Maybe you could trade for a small prop trading firm if you’re a baller trader without a degree, but even there it’s tough – they care less about pedigree than banks, but everyone else there will have the degree.

It’s approximately 100x more difficult to get into banking coming from a “non-target” school (one where banks don’t recruit) compared to a “target” school (the Ivy League, LSE, Oxbridge, and so on), so go to the best school possible.

What you major in doesn’t matter too much as long as you get decent grades and internships, but you can review your options right here.

Master’s Degrees

There are several good reasons to get a Master’s degree:

  1. You need the prestige because your undergraduate school was unknown.
  2. You had poor grades and need to press Ctrl + Z on your transcript.
  3. You didn’t get an offer and want to try again, with better access to recruiters.
  4. You’re in Europe and 5-year programs that include both the Bachelor’s and Master’s degree are common.

The most common question on Master’s degrees:

“So, if I go for a Master’s in Finance program I can start as an Associate, right?”

No, you can’t, because:

  1. You would need at least 3-5 years of previous work experience or 2 years as an IB analyst first.
  2. Master’s programs are less of a time and money commitment compared to MBA programs.

I must have heard this question 500 times at career fairs and the answer is always the same: “You’ll still be an Analyst.”

MBA

This is the only advanced degree that allows you to “level-up” when you start working.

IF you have had enough experience (usually 3-5 years in a normal industry, or 2 years as a former IB analyst), then you’ll start out one rung above the Analyst: you’ll be an Associate instead.

Which means you get paid a bit more, have more responsibility, and you get to sleep 6 hours per night instead of 4.

But do not assume that just because you get an MBA, banks will automatically interview you or think that you can be an Associate.

There are plenty of ways to screw it up, including going to a non-top-tier school, not having enough work experience, or not showing a clear progression toward being interested in banking.

So make sure you learn how to properly re-brand yourself and how to use MBA programs the right way in the first place.

JD

While Damages the TV series is awesome, most law firms are not even close to that interesting in real life: the Partners at your firm might be sadistic, but they’re still far from Patty Hewes.

So many lawyers get the bright idea that they could go into finance instead and make bank while abusing their former co-workers.

Just one small problem: banks don’t give a crap about law school.

OK, that’s not 100% true and it’s viewed a little more favorably than the MD or PhD – but there’s no added bonus for going to law school and it’s a much more indirect path to banking.

You have to graduate from law school, work in corporate law for a few years without going insane, and then network your way into banking from there.

Having the law background may benefit you in areas like Restructuring and Distressed Investing where there’s legal overlap, but it’s a stretch to say that you should go to law school specifically to get into those fields.

If you’ve already taken the plunge, you can’t exactly abort midway through – so finish, do corporate or securities law, and then network into banking after working for a few years.

You may actually start as an Associate if you do law school and then corporate law before banking, so the JD can be another way to level-up.

PhD

If you thought bankers looked down on lawyers, you’ve never seen their reaction to PhDs – ouch.

Bankers and PE-ers don’t care about the degree because the math in both fields is trivial: arithmetic and a few circular references in Excel.

You might be the next Stephen Hawking, but that doesn’t matter because you don’t need to understand wormholes to be a banker – you just need to understand how to change the font size in pitch books.

Most bankers think that PhDs are too well-educated to go back to fixing printers and scouring through SEC filings, so there’s a significant bias against hiring them.

Sometimes you can still get into finance if you have the degree, but usually you have to:

  1. Target a boutique that fits your background exactly – like an industrials-focused firm if you have a PhD in materials engineering, or a healthcare-focused firm if you completed an advanced degree in biochemistry.
  2. Go for equity research instead. They actually care about the degree because they want people who understand an industry in-depth – again, you would focus on groups that match your background.
  3. Go the quant route (works best with physics/math/related degrees). Sure, trading will never be what it once was, but firms always need quants and smart math people to build their models.

MD

You face a similar problem here: you’re over-educated and banks will assume that you have no interest in spreading comps if you’ve qualified to perform open heart surgery.

They may also assume that you’re unable to commit to anything and stick with it: how could you have made it through years of med school without realizing you wanted to do business earlier?

In this situation you’d have to follow the PhD advice above and go after boutique banks in the healthcare/biotech/pharmaceutical space and/or look into equity research. You don’t have the ideal background to be a quant, so that’s not the best idea here.

You’ll also need a really good story about why you’re making this move – not just “I realized business was so much cooler!”

You need a specific incident or person that made you interested, and a perfect explanation of how you realized that medicine was not for you after years of doing it, but how you’re simultaneously certain that finance is for you with 0 years of experience.

Combo Degrees – JD + MBA?

Combo degrees get another “thumbs down” from me.

We already learned that adding a Master’s degree on top of a normal bachelor’s degree, for example, won’t let you start as an Associate.

But what about that famed JD + MBA combination – surely that must open up more exit opportunities, right?

No, not really. Most jobs are geared toward law or finance, but not both.

It would be most useful in areas like Restructuring, Distressed Investing, or arguably Real Estate / Project Finance where there’s overlap with the law and legal codes.

But even there, it’s a stretch to say that the JD would add much: even the MBA might not be terribly helpful if you’ve had previous, relevant experience.

You may also face a branding problem if you have a law degree and a business degree: business people will think you’re a lawyer, and lawyers will think you’re in business.

There’s always a temptation to think that more = better when it comes to degrees or certifications, but that’s just not true.

You want the minimum investment required for maximal gain – anything more than that reduces your ROI.

What about other combinations like JD + PhD + MBA, or JD + MD + MBA? Please, don’t even waste your time and money – it’s just silly.

Adding more advanced degrees like this will hurt you and make you look like more and more of an academic and less and less like someone who can actually make money in the real world.

Certifications

This part will be shorter because certifications matter far less in banking and PE than degrees.

The main one that generates debate is the CFA and whether or not it’s helpful for breaking in – others are either completely useless or marginally helpful at best.

Series 7 / 63 / 65 / 66 / 79 / 84563X2

If you have a ton of free time, you’ve already networked extensively, and you already have great internships and/or a full-time job lined up, then sure, knock yourself out.

Just be aware that if your bank requires them, you’ll complete the exams during training anyway.

If you really want to set yourself apart before you start working, you’d be better off moving to another country for a few months and doing something interesting there.

CFA

I’m not going to rehash all the arguments for and against the CFA here – go consult this article if you want to go down that path again.

The short version is that it’s not the best use of your time for investment banking or private equity in developed countries, but it may be more useful in emerging markets or in fields like equity research, portfolio management, or some types of hedge funds.

And do not think that it will cover up an unknown school, low grades, or no work experience – it won’t.

Think of it as an added bonus and something to look into if you already have top schools, high grades, and great work experience.

CPA / FRM / Other Certifications with C and F in the Names

Look, if you want to be an accountant or a risk manager or perhaps other things outside of IB/PE, then sure, go ahead and pursue these.

There’s an alphabet soup of other certifications out there, and David from Bionic Turtle does a great job of summarizing them here.

There’s nothing wrong with any of these – it’s just that they will not help you much with IB/PE, because getting in is based almost entirely on practical experience.

In the future, who knows, there may be an exam to get “certified” in investment banking – but for now no one takes anything like that seriously (yes, I’m talking to you, “Certified M&A Advisor”).

There’s another critical reason why such certifications don’t apply to IB and PE: at the top levels these fields are based on sales, relationships, and negotiation skills – skills that can’t be tested on a written exam.

Bloomberg / FactSet / Other

Don’t even bother – you’ll learn everything you need to know (which is not much) when you start working, and you don’t even use the complex features in banking.

These may actually hurt you because you do not want to be known as “The Bloomberg Guy” or “The VBA Guy” or anything else that results in annoying requests to fix other peoples’ broken-beyond-repair spreadsheets.

Standardized Tests: SAT, GMAT, GRE, A-Levels…

These aren’t quite “certifications” but why not throw them in here anyway?

None of these is as important as grades in university, but in the US most banks will still ask for your SAT scores, and GMAT scores can be helpful if you have low SAT scores (under 2100 in the new system). No, don’t bother going back and re-taking them if they’re low: not worth the effort.

As with grades, these tests are more about whether or not you meet the minimum score they’re looking for rather than “standing out” – so please do not re-take the GMAT if you got a 720.

Got Degrees or Certifications?

I hope not – unless you mean a university, Master’s, or MBA degree (or one of our highly-practical investment banking courses).

Otherwise, save your time and money and if you’re already too far down a path to turn back now, cut your losses and change direction as soon as you can.

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 read your articles often and would like to end up in PE later in my career ideally. I’m about to go into my final year of a russell group university studying BA PPE (with a focus on economics). I have also just finished a summer internship in Audit at a big 4 firm. I am considering attempting a transfer into Transaction Services (financial due diligence) for my grad job offer and study for the CAIA Charter in my own time. Is this a worthwhile career move if I’d like to end up in PE? I’m also considering Internal Audit grad jobs at banks as it would be easier to get into following my internship and would get my foot in the door at a bank but I am worried it will be too unrelated to financial markets to be useful. What are your thoughts?

    Thank you – keep up the helpful content!

    1. No certifications will help you get into PE. Only your university name, transaction experience, and academic results matter. The only certification that is even marginally helpful is the CFA because at least it shows time and effort and dedication. The CAIA will not help because PE firms recruit people who work at banks in IB Analyst roles, not people who got the CAIA.

      If you want to work in PE, then you need to win an Analyst role at one of the top investment banks to have the best shot.

  2. Avatar
    Dan Ortiz

    Great read Brian. Question, I have a BBA in Finance with a concentration in Financial Analysis from a non-target school, with mostly A’s and B’s. During undergrad I landed an Internship with Raymond James as an ERA. Stayed with them for 4 years after that, still as an ERA but also a Finance Ops. Mgr. I moved into REITs as a Valuation Analyst, and now have a total of 6 years of Analyst experience. I will finish my MBA with a dual concentration in Finance and Data Analytics from Syracuse in 2020. I passed the Level I and will take Level II next June, then Lvl III the following June after that.What would you recommend I do to start moving in the direction of IB/PE, and how hard do you think it will be for me to break in to the field coming from non-target schools?

    1. It’s going to be very difficult because there aren’t many non-target openings at the MBA level, and the CFA doesn’t count for much in IB… it makes an incremental difference, but mostly if you have a non-finance background and need to prove yourself. Basically, it comes down to networking and focusing on smaller banks. Please see:

      https://www.mergersandinquisitions.com/non-target-mba-to-investment-banking/
      https://www.mergersandinquisitions.com/back-office-non-target-mba-to-investment-banking-associate-canada/

  3. Avatar
    Albert Cuspinera

    Hi man,

    Thank you for the information. It is very useful. I want to start my carrer in investment banking but I have to do a master because I think I am late (graduating this year and haven’t done any internship in I.B.). Which master do you recommend? And where?

  4. Thanks Brian for the article.
    I am currently a final year law student pursuing his undergrad from a top law school here in India. I interned with a BB (as you rightly pointed out, law overlaps with distressed products, and that is where I was), but it didn’t translate into a full time offer. I signed up for CFA and would be writing L1 soon, any thoughts on whether or not I could land an analyst offer in my country? If yes, where should I look? (I have already applied to multiple other banks, but nothing seems to be working out for me).

    1. My response for all India-related questions is the same: it is a very different (and worse) market, and your chances of getting into IB are poor unless you’ve attended one of the top 2 IIMs. It would be best to leave the country and work elsewhere or to think about other options there:

      https://www.mergersandinquisitions.com/investment-banking-india/
      https://www.mergersandinquisitions.com/startup-investment-banks-india/
      https://www.mergersandinquisitions.com/india-big-4-transaction-services/
      https://www.mergersandinquisitions.com/private-equity-india/

      https://www.mergersandinquisitions.com/investment-banking-university-student-high-school-student/

      1. Hey Brian,

        Thanks for the prompt response, those articles are extremely helpful. Correct me if I am wrong, but as far as my reading and understanding goes, undergrad entry into IB/PE seems to be largely dependent on networking/cold-calling/emailing unless you come from IITs, which are the so-called Indian target schools. However, would you still maintain the view if I hail from an ivy-league equivalent law school in the country? And additionally, do you mind clarifying your point on leaving the country and working elsewhere? Are you referring to off-shore jobs? If yes, I have been handed a few rejections on grounds of “skill-sets don’t match”, which also seems to be the issue with Indian IBs.

        Best

        1. India is a bad market for IB jobs because the number of jobs is very small compared with the eligible population, and it’s more difficult to get in than in countries like the US, UK, where there are so many positions that you can always find openings at smaller/newer/local firms. I don’t know if a top law school there would help at all. If you have corporate law experience, you might be able to use that to get in. But I don’t know whether this specific path is possible or likely there. By “leave the country and work elsewhere,” I mean literally leave the country and find opportunities in better markets such as the US, UK, HK, Singapore, etc.

  5. Thanks Brian for sharing this great content.

    I’m an actuary in France and planning to do a Msc in Finance or a MBA by 2020 to work in IB. I will have 3 years of work experience by then. Which one will be more efficient in my case (MBA or Msc in finance)? Do you think that switching from actuary to IB is possible?

    Thanks in advance.

    1. If you have 3 years of work experience in actuary, you will almost certainly need an MBA to move into IB. But be careful because the whole industry is different in France, and the normal rules do not necessarily apply:

      https://www.mergersandinquisitions.com/france-investment-banking/

      Your best bet is to go for a top MBA in the U.S. or U.K. and aim to work there (even post-Brexit, most IB jobs in Europe will still be in London). It is possible to switch from actuary to IB, but you will need some more relevant experience before/during the MBA as well.

  6. Avatar
    Ankita Singh

    I have completed my undergraduate program in banking and finance. I want to break into Middle Eastern Financial Market. Is there any course or diploma that I can pursue for breaking into investment banking other than CFA? I want to pursue MBA after some years before that I want to work with an investment bank across Middle East.

    1. No, not really. You can learn financial modeling via our courses or others, but those are not really diplomas in the same way the CFA is. Getting into IB comes down to undergraduate name/reputation + GPA + past internship experience + networking.

  7. Great article! So in your opinion would an MD/MBA from a top 10 business school with no work experience start off as an IB analyst and not an associate? Is there no chance of the latter?

    1. They wouldn’t even know what to do with you. Just don’t do that. You always need several years of work experience + ideally a top business school to be hired as an Associate.

  8. This is a great site Brian, would a masters degree cover low undergraduate grades?

  9. Avatar
    Oluwaseun

    Hi, thanks for your support on this thread.
    I have about 11 years experience cutting across; Retail banking, Public Sector Banking, Commercial and Emerging Corporate Banking, Agribusiness Commodity and Structured Trade Finance and recently Corporate and Investment Banking. I have been involved in several structured and project financing with least ticket size being USD5m, i have initiated and concluded handful of transactions valued over $100m. I had my Bachelor’s degree and MBA from Nigeria but am currently in the US seeking job opportunities within the banking sector preferably Investment & Corporate Banking. What are my chances and any certifications do i require to have to work in the US.

    1. If you need a work visa, it’s almost impossible to get one if you’re not in school and your current firm in Nigeria is not sponsoring you. You pretty much have to win an internship and convert it into a full-time role (while at a U.S. university) or get an international firm to sponsor you to have a good shot.

      1. Avatar
        Oluwaseun

        I currently have work permit.

        What are my chances of securing work with the bank?

        1. If you have a lot of work experience and interview well, your chances are as good as anyone else’s in the same position. I can’t really say without evaluating you in an interview, which is obviously impossible in the comment thread of this site.

          1. Avatar
            Oluwaseun

            Thanks for your response.

            Do you run interviews? If yes what are the procedures towards further discussion with you? Am grateful

          2. We do not currently offer mock interviews but will post an announcement if anything changes.

  10. Thnx Brian for the answer. Brian i have one more question, can i get a job OFFER from GS or JPM from US if i am studying in Canada or will i have to go to US for job application to get a job in GS and JPM

    1. Theoretically, yes, but your chances would be much better if you were studying in the US.

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