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Can an MBA Land you a Sell-Side Trading Gig?
 

West Coast FX's picture
AM
(Baboon, 110
 
Points)
 on 7/6/12 at 3:30pm
Screens

After scouring the internet and employment reports for the answer to this question, the only conclusion I've become confident with is: It’s possible. It appears, unfortunately for those of us that missed the bus, that most sell-side trader recruiting on the street takes place at the Undergraduate level, rather than the Graduate level. How then, is the best way to break into the industry if you already hold an undergraduate degree?

By "sell-side trader" I’m referring to any type of flow-based (non-prop) trader at an investment bank. I’ve read through countless forums regarding this topic in addition to each of the top MBA and Masters in Finance programs’ placement reports, and this post is meant to serve as a summary of my findings.

First and foremost, there seems to be much confusion about the topic, even from people on sell-side desks! Some claim the Undergraduate recruiting program, or "knowing people" is the only way to break in. Others insist a solid "P and L" from your personal account is what’s needed. Many suggest the degree of choice is now the Masters of Financial Engineering, or something similar. Yet others are convinced the MBA is still a valid way to go.

Each path seems to have its own disadvantages. Knowing the right people seems to perhaps be a way to get an interview, but one would think a majority of these candidates would be weeded out during the interview process, as they may not be as qualified as others. The "P and L" argument makes sense to me for a prop-trading role, but not necessarily for a flow-trader. The MFE sounds good, but what if you don’t have the math background to be admitted? Many argue that these programs prep one mostly for programming/quant rolls instead of trading anyhow. There’s the Masters in Finance, but aside from the selective programs at MIT or Princeton (which require nearly as much math as a MFE), these programs don’t seem to be targets.

So what about the MBA? From what I’ve gathered, the few top MBA programs in finance have placed between 3% and 6.5% of their 2011 class into Sales & Trading. Of this relatively small proportion, it’s commonly believed that more than half of these roles are actually in Sales, rather than Trading- due to the reputation of the MBA being more of a "soft skills" degree. In other words, the chances aren’t good.

However, these trading roles are in much shorter supply than other popular MBA career destinations such as IB or Consulting- so the chances should be lower. Since most MBA applicants are shooting for other industries, there may be reduced competition for these positions as well.

In conclusion, it seems that although the odds are not high, it appears to be possible to land a career in sell-side trading by getting an MBA. My advice for any aspiring traders, without the technical background for a MFE, would be to select a top 10 program with a quantitative reputation and take an abundance of math-oriented courses.

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Comments

Futures Trader Man's picture

+1 SB thanks for the info.

RE
(Orangutan, 318
 
Points)
 on 7/6/12 at 3:23pm

+1 SB thanks for the info.

"Well, you know, I was a human being before I became a businessman." -- George Soros

grapefury's picture

trading is going the way of

(Baboon, 120
 
Points)
 on 7/6/12 at 3:36pm

trading is going the way of the dodo.

Seeker's picture

There's only one safe choice.

(Baboon, 149
 
Points)
 on 7/6/12 at 3:44pm

There's only one safe choice. MIT MBA.

Bobb's picture

been trying to break into a

AM
 
Points)
 on 7/6/12 at 4:09pm

been trying to break into a sell side trading role and have been debating an MBA for a little bit. I am torn...

Barbarian@theGate's picture

Anecdotal only, but I know a

 
Points)
 on 7/6/12 at 5:22pm

Anecdotal only, but I know a recent grad each from Booth and CBS that are in the type of positions you describe.

Brady4MVP's picture

S&T gigs for MBAs are getting

HF
(Neanderthal, 3,161
 
Points)
 on 7/6/12 at 5:23pm

S&T gigs for MBAs are getting a lot more difficult. Trading desks are cutting down and are directly promoting analysts to associates or hiring those from other firms. The vast majority of MBAs who do go into S&T end up in sales, with a few in structuring and "pure" trading.

Macro Arbitrage's picture

In Canada the recruiting for

HF
(King Kong, 1,407
 
Points)
 on 7/6/12 at 11:08pm

In Canada the recruiting for S&T rotational program predominantly consist of MBA hires.

"I swear, by my life and my love of it, that I will never live for the sake of another man, nor ask another man to live for mine."

Imperialian's picture

I think someone posted this

ST
(Baboon, 173
 
Points)
 on 7/7/12 at 12:21am

I think someone posted this awhile back.

http://www.wallstreetoasis.com/forums/wsj-article-...

look, if u r hell bent on trading, why do u want to waste ur time studying modules like marketing and human resource courses in your MBA?

if u tell me MBA gives u more career choices like consultancy and PE. Fine. I agree. But when you talk abt trading, its more math based and financial market experiences.

ke18sb's picture

something of note that much

PE
(King Kong, 1,111
 
Points)
 on 7/7/12 at 7:06am

something of note that much be considered is the self selecting nature of MBAs. It is probably safe to assume that not many MBAs want to do trading and thus it correlates to the low numbers. While still competitive, it might not be as bad as the numbers look at first blush.

JerutheDamaja's picture

They will hire an MBA if you

(Chimp, 5
 
Points)
 on 7/7/12 at 11:29am

They will hire an MBA if you have a solid quant background or prior trading experience. For example, if you did great at Cal Tech and got an MBA from a top 10 program, they'll definitely consider you.

But even if you're in flow trading, you still need to be good at sales/bringing in business, otherwise you'll be working for 2 years and get booted.

If you're past your UG and looking to switch careers, you need a quantitative masters degree from a top program or MBA as a minimum to even get an opportunity.

West Coast FX's picture

I actually agree with you

AM
(Baboon, 110
 
Points)
 on 7/12/12 at 1:32pm

I actually agree with you Imperialian... It's just that there's only so much math one could study without a prior background in math. Without the background, you wouldn't get into (or understand) the quantitative finance programs. You could get into a masters of finance program, but like I said, these for the most part don't seem to be large targets. At least the top MBA programs actually have these recruiters coming to their campuses, even if the chances of securing a position are small... It also seems a MBA with a highly customisable curriculum could help to circumvent some of the non-finance/math related courses, and allow one to focus more on the more relevant ones. Thenagain, without much of a math background, it's possible one wouldn't be considered for these positions anyway...

See my other WSO blog posts

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