Best path to PhD in Finance (MSF or MSEcon)

Try an MFE? A quant-heavy MS Econ could also work.

1.) You need a lot of math and stats coursework to really do published research in Finance.

2.) For a top 15 program, acceptance rates run about 2-4%. It's really helpful to get a reference from someone with research published in a big three journal. So find the schools that are doing the research, figure out which programs you can get into, and which programs you can get admitted to.

At a minimum, I'd be aiming for Duke or NYU; maybe UMich or Berkeley. For MFE programs, you can also go NYU, Columbia, and Cornell.

This isn't an easy path.

Bunch of paths. Probably best would be to apply directly to a PhD program (assuming you have the prerequisites).

I would suggest a masters because it gives you optionality. Now the program you pick will be based on what your 2nd best career option would be. If you are cool with being a quant then do an MFE. If you'd be interested in corp finance, banking, etc, then an MSF would be a good pick.

Every year people do MSF's and go into PhD programs. I think it is a good way to test your interests out. No need to go into a PhD and find out too late that academic research isn't your cup of tea.

ANT it's not exactly easy to get into a top Finance PhD program.

Kellogg gets 250 applications every year and admits about 10. Many of these people have master's degrees.

OP should hopefully have some Finance prof friends who can help him on this question. If his ultimate goal is to be a finance professor, well, there are much better people for him to ask than us. Actually, he should be asking them about this if for nothing else to test the water to see about a rec.

My brother has a 4.0 GPA at UIUC, a few semesters of finance/econ research, and wants to do this. His advisors are recommending he gets an MFE from NYU or Columbia first. He may be able to get a Marshall Scholarship, but a Kellogg or Stanford admit is probably out of the question for him at least straight out of undergrad, according to them.

Here is my understanding of the trick to admission, at least according to my friends applying to these programs, my brother, and the Finance PhDs I've worked with and asked about this:

1.) You need a credible math background. 2.) You need strong recs from at least well-published profs. (A few publications in the JOF, JFE, JOB, or Econometrica would be helpful- a celebrity prof would be even better) 3.) Having an excellent GPA and some coursework in econometrics. 4.) Various indications that you're capable of doing financial research- decent coding ability, strong knowledge of stats and economic theory.

I mean the world doesn't end if you don't get a top PhD.

All depends on the goals of the individual. I think a top PhD is helpful if you want to go into business or teach at a top top school, but you can teach at tons of great universities with a normal PhD.

A problem is that I'm taking a BS in Finance, which has limited math courses. Should I double major in math if it doesn't delay my graduation too much?

Well, it's a five or six year degree, and your pedigree in academia has as big an impact on your career as it does in IBD. While Finance PhDs are in high demand, you'll probably work at a less prestigious institution than the institution that grants your PhD.

If you want to be a finance Prof at UIUC or UW Madison earning $200K/year, you want a PhD from at least NYU or Berkeley or something on that order.

Yes, there are ways around this.

Yes, it's possible to get published in the Journal of Finance from a flagship state school. I've actually worked for a guy who has that story. But it's just that much harder.

You don't need a double major in math.

For a PhD, you probably just need something on the order of these classes:

-Calc I-III -Calculus-based probability -Linear Algebra -Differential Equations (important but not absolutely essential) -Real Analysis (important but not absolutely essential) -Econometrics ----> Ideally this should cover ARMA, GARCH, etc; if it doesn't you need to take a course on time series analysis. -Intermediate/Advanced Micro/Macro

These are not easy classes. They are a challenge at a flagship state school; they are even more difficult in a top MSF/MFE/MS Econ program.

You do not have to do the econometrics, micro/macro, and real analysis to get into an MFE or Master's program. You probably do need them before you do a PhD.

A Finance undergrad is a liberal arts degree that involves some Algebra II and occasional basic stats.

A Finance PhD from a top 20 school is going to require as much math/stats- and as much rigor with that math- as a Bachelor's Degree in Math from the University of Chicago. I'm not going to say that they're two different animals- if you're passionate about finance, and you're good at math, you should do it- but I AM going to say that you're going from Division III college baseball into playing for the Yankees.

There's a reason more Finance PhDs are Stats/Math/ORFE/Econ undergrads than Finance undergrads.

WHY do you want a PhD in Finance. The academic content is freely available to anyone with modicum of curiosity/patience/internet. Look at how well articulated previous answers are re: prerequisites, any finance grad student is going to go do some random thing, there are no extensive postgrad canons of 'phd finance that works/makes money' so ask yourself what is the endgame here

Thanks for the answers @IlliniProgrammer & @TNA! Greatly appreciated!

What do you guys think about Master of Economics at the best Scandinavian business schools? Such as Norwegian School of Economics, BI Norwegian Business School Stockholm School of Economics, Copenhagen Business School? I want to apply for the PhD programs there as well as in the US. I know Norwegian schools pay PhD students about $75,000 annually along with free tuition (plus the schools are great). Would taking an economics degree there limit my options for the PhD programs in the US?

@capitalizeddisinterest: I want to take the PhD to pursue an academic career. I haven't done much research (as I'm an undergraduate), so it's hard to say if I will enjoy it. However, I'm passionate about finance and teaching is something I've always wanted to do.

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ok that's cool if you want to be a teacher, just be sure you aren't choosing academia for the sake of it being a low-risk path, which it is, provided you get into a good school as stated or else teaching probably isn't in the conversation

if you are passionate about finance there are lots of things to do. real things. at the end of the day you can always teach others about your conquests that actually happened in markets. financial fields of academia are not relevant, that Is specifically worded because they are not academic fields of finance, meaning ppl doing finance phd work have more in common with bored physicists/math ppl than with market ppl with responsibilities

I AM short academias ability to stay relevant in finance econ etc as well as other fields

For the record, if you're from Europe, you're playing under a different system. Europe is a bit more rigorous on the math stuff in finance degrees.

I think the University of Stockholm has a good reputation. I also think I've seen Stockholm after a few names published in the Journal of Finance.

This is like asking an Philosophy major what he thinks of the various business clubs or various business fraternities at his school; I've lived in the US my entire life and Scandinavia is 2-3 steps out of my domain of knowledge.

The three UK schools and Bocconi are also good if they have money for you.

I understand that cost is a big issue.

If you can work on a paper at Stockholm that eventually gets published in the JOF with your name as the third or fourth author, you can probably get a professorship at most flagship state schools in the US. I can't speak to Europe.

Again, I'm not... that... familiar with Scandinavia. Consider this a very weak data point that would support the University of Stockholm, but I'd be getting advice from Profs from those countries.