MBA - To be or not to be?

Dear Forum,

I am an equity research analyst at a boutique investment firm. I joined the company right after college and have been at the firm for four years. Last year, I completed my CFA and was promoted to VP (all-in income of $275k).

Overall, I would say that I enjoy my job but I am getting increasingly frustrated with the lack of visibility for future growth at the firm. The company is small with a flat organizational structure and I am concerned that my career trajectory over the long term is somewhat capped. Moreover, the firm has material key-man risk.

With that in mind and thinking over the long term, I wonder if pursuing an MBA would improve/hedge my chances of finding another job, especially in the event that the key-man risk materializes. Would I be better off focusing on the job and building my network gradually or would an MBA truly be a distinguishing factor? When recruiting for a new job in, say 2-3 years, would I be competing against a pool of MBA graduates, which might put me at a disadvantage? If that is the case, should I consider a part-time MBA vs. a full-time MBA?

Thank you,
Confused Analyst

 

Had a friend in a very similar situation who opted to NOT do the MBA. Was an A2A IBD promote and then moved to at a VP / Research Analyst level buyside role. His rationale: "Why do an MBA and potentially compete for Associate level roles when I graduate?"

I don't think a current VP1 (pro forma VP 3 in 2-3 years time) should be worried about MBA credentials when thinking of moving, especially when you mentioned you completed CFA. Unless I'm missing something, I don't think you'd be competing against MBA grads. Maybe if you want the MBA credential, consider an ExecMBA?

My two cents.

 

You seem to have done well at your current firm. Can't you network around to get an ER gig at a bigger bank? or get some clients to hire you on the buy-side?

If you are happy with the content of your work, you should consider part-time MBA. What do you want to do in the long-term? MBA has to be time and money well-spent for yourself, if you want to be in this pretty exclusive industry (I am on the outside trying to break in), I really don't see the point of doing an MBA at all. ER groups will love to hire someone with direct experience (like yourself) to fill a spot.

 
Best Response

You have different considerations than most people that go to get an MBA. You wouldn't be going to recruit for associate roles in IBD or consulting. Most starting jobs out of MBA's pay less than you're currently making. And many of your classmates will be there to recruit for the type of job you already have. So if you view an MBA through the framework of the typical MBA applicant, it doesn't make sense for you to go.

However, there are longer term considerations, such as branding and network. Unfortunately, these are the intangible considerations, so you've really got to weigh your risk tolerance and do your research to try and value these. Do you come from a relatively unknown undergrad and/or boutique? If so, would that be an obstacle you would struggle to overcome in the case your current situation ends? Would your current firm be open to hiring you back into your same role post-MBA? Do you work in a niche industry/subsector where your existing network / knowledge base provides a 'floor' for your career in that industry/subsector?

It's hard to argue that an MBA would improve your career over the next ~5 years, and there's a significant chance it would end up causing you to take a step back in both compensation and position (and very likely set your personal balance sheet back a number of years). The biggest risk to me would be finding a job immediately after the MBA, given that you don't want an associate-level role in IBD or consulting. However, it could also provide a floor, upward mobility opportunities, and branding over the next 40 years.

How you value that trade off is up to you. If you haven't read CompBanker's 'To Anyone Considering an MBA' thread, I suggest you do. He lays out a good argument for why it makes sense for someone in your situation - already in a successful high-paying job that they enjoy - to get an MBA.

 

I think what you really need to do is ask yourself, what do you see yourself doing long term and work backwards from there...

assuming you want to continue your career in ER, either sell or buy side, you wouldn't need your MBA...a research analyst should most likely have their CFA (which you do already), deep and reliable knowledge of their sector and coverage universe (which you should have), and presumably a network of CEOs within (and maybe a little outside of) their coverage universe (which you also should have)...what would an MBA do for you? other than the obvious costs/opp costs involved, you wouldn't gain anything to offset them.

i say screw the MBA...and look elsewhere where you see more growth prospects.

i'm in a similar boat...3 years banking as an analyst at a boutique shop + 3 years corporate strategy/M&A at a REPE...now in a role that i don't really see myself doing long term...so i'm seriously considering doing my MBA.

 

at this stage an MBA is really not necessary. the opp costs are too high. The only upside would be the name and network of an H/S/W program. Otherwise you will make one step backwards for a while as others before mentioned. The good thing about an MBA is of course the 20 months off with all the partying and traveling. 4 days of 6 hour classes a week? that is a nice life!

Make Donald Drumpf again
 

i would think the mba is only if you want to make a career change in this case. It seems like that is part of your thinking and that's totally understandable. I would be sure to only go to a top tier school or not at all (in any event).

If you like ER and are making decent bank (not sure what city you are in but i'm surprised at the comp) stick with it and start looking around for a senior analyst slot or better firm to lateral into..i know many think ER is pretty static but i've seen lots of turnover in some sectors; just be careful BC those firms are usually structured poorly causing turnover (sales force runs the firm, comp sucks etc.)

The other option of course is be the guy the key-man takes with him and eliminate that risk all-together, not sure if that's viable (different sector etc.)

 

You would be a complete moron to get an MBA. How long do you think it would take you to recoup the ~800k you would spend on an MBA program that places maybe 1% of its graduating class into a position that you ALREADY have?

“Elections are a futures market for stolen property”
 

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