What do you think about the MFE degree?

fourkingsplus's picture
Rank: Monkey | banana points 57

I've heard that an MFE (Masters, Financial Engineering) degree is a great way to get past the shitty grunt work and long hours most people face in finance. Yet I've also heard others say that it isn't so, and that it actually puts someone farther away from the good jobs (trading, upper division quant research). What do you read to be the reality for those with this degree? Is it a good deal, or a waste of time and money?

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Comments (40)

Nov 10, 2006

In my opinion you should pursue a degree like MFE only if you truely enjoy the subject matter and shouldn't make decisions on what jobs may or may not get because of it.

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Nov 10, 2006

pensive, why not the masters in finance at Princeton? i'm sure u know what i'm talking about...

i know someone who got an MFE from Cornell... if u want i can give you his AIM SN. he actually went to law school right after that (what a waste), but i'm sure he knows about their job opportunities etc

Nov 10, 2006

I agree unless you enjoy the course work under an MFE program. It really doesn't give you an edge unless of course you are looking for a quant position. Then it may/will become a necessity. But it does pigeon hole you into quant type role and sometimes puts you closer to IT folks, than the transactional side of things.

Nov 11, 2006

Here is my opinion on the MFE, from someone who is in a part-time MFE program, and works full-time as a hedge fund. The MFE basically prepares you for more quantitative jobs in finance (think derivatives trading, pricing and structuring, quantitative Asset Management, etc). These are jobs that generally require a technical graduate degree.

For other kinds of jobs (for example, IB, straight equity trading, etc), the MFE won't help you at all. Groups that hire for these kinds of jobs just don't seek out MFE-type skills, because they're not required.

Some people want the former kind of job, and some people want the latter. I fall in the first camp, and so the MFE track was natural for me. I'd say unless you want a job where you are potentially using math and programming every day (by programming, I mean C++/Java and not Excel) or trading an exotic product, the MFE track won't be for you. In general, zero percent of MFE graduates are seeking IB jobs.

Nov 11, 2006

In my opinion you should pursue a degree like MFE only if you truely enjoy the subject matter and shouldn't make decisions on what jobs may or may not get because of it.

I can't say I would agree with this. Tuition for an MFE could cost as much as $45,000, along with the opportunity cost of not working for 18 months. Those who enter MFE programs are fully committed to finding relevant jobs after graduation.

Nov 11, 2006

In the UK lots of colleges offer an MSc in Financial Mathematics. Is that the same as the MFE?

PS: Rickets, or any else who can help, I'm in the penultimate year of a maths degree. What can I do to get a quant job in derivatives / hedge funds?

Some stuff I'm considering:

  • Do a research project next year on Black-Scholes (I'm good with PDEs and stochastic processes).
  • Do an internship in the summer working with contracts for difference.
  • Get 100% in all of my exams.
  • MSc Financial Mathematics?

Any advice is appreciated.

Nov 12, 2006

I have to agree with Rickets. The concept of education as an end-in-itself lost all of its usefulness back when sunny futures were no longer assured for the lucky-born, professionals stopped working 10-to-4, and shit actually got competitive. This is especially true of professional degrees. To spend money and time on an advanced degree and not get occupational advancement out of it is just wasteful.

MFE, for me, is probably a short-term pay-cut, since straight-out MFE jobs pay less ($65-75k) than I'd be making in 2 years, but I think it might open up a really interesting line of work. So, for those reasons, it's worth it. I don't feel that a BA alone gives enough mathematical sophistication to attack the really interesting problems, unless with a lot of disciplined study... and one might as well get a degree, then, in order to have the study recognized.

As for what I want to do, ultimately, I'd like to do trading, but of a sufficiently math-heavy and cerebral sort that I won't have to look over my shoulder wary of out-sourcing or CBT, and also to have a solid skillset even in the event of an unlucky year or a bad decision that fries me.

Nov 13, 2006

I'd say this: one thing you can do is interview for jobs in the fall if your senior year, and if you don't land anything you're happy with, apply to MFE/MSc Finmath programs. In general, it's difficult to get a good quanty job on the street without a grad degree, but there's no reason you can't go for it out of undergrad. Any research/proficiency you can show with mathematical finance concepts would certainly be helpful.

Nov 13, 2006

Sounds reasonable. Thanks Rickets.

Dec 12, 2009

What do you think is better for trading jobs? Are there more quant trading positions now than traditional trading job (equity, vanilla)?
http://www.quantnet.com/forum/showthread.php?t=3218

Dec 12, 2009

Financial engineering at Baruch requires a near perfect math grade on the GRE. Not sure about Berkeley.

Dec 12, 2009

Okay, that's actually good, because I'd much rather take the GRE than the GMAT. Thanks for the info.

Dec 12, 2009

Honestly, you don't seem like a particularly strong candidate for these programs becase you don't have the right academic background or work experience. A 3.6 isn't bad, but since you're a nontarget without a hard-core quant major like math, engineering, or CS, admissions commitees may not buy into your quantitative skills. Also, I don't think F500 finance/systems is relevant or quantitatively rigorous enough to impress MFE adcoms.

I really don't mean to be discouraging, but you should understand that these will be weaknesses in your application that you will need to overcome.

Money Never Sleeps? More like Money Never SUCKS amirite?!?!?!?

Dec 12, 2009

Check out this thread:
http://www.wallstreetoasis.com/forums/top-master-f...
Here's my comment from the thread:

joe_monkey:

Just dug out my notes from a Berkeley MFE info session. No guarantee of the accuracy of what I scribbled down:

-Finance experience (FT or internship) + CFA level I required.
-Programming experience required. There is a crash course in c++ offered right before the term begins.
-Almost all students had degrees in math/stats/physics/engineering. Many had advanced degrees in those subjects.
-Very very few students with degrees in business administration are admitted (unless coupled w/ quantitative second majors or advanced degrees).

Here's IlliniProgrammer's:

IlliniProgrammer:

Andy Nguyen at Quantnet.com is the de-facto expert on MFE admissions. And his advice/help is absolutely free.

Recommend posting this there.

Don't believe everything you think.

Dec 12, 2009

Yeah that's what I was worried about. As MB said, I will probably have to ace the GRE to have a chance. Do you think the intro/preprograms will help at all if I can do well in them/impress the profs, or do they not really put much stock in those?

Dec 12, 2009
MonkeyWrench:

Yeah that's what I was worried about. As MB said, I will probably have to ace the GRE to have a chance. Do you think the intro/preprograms will help at all if I can do well in them/impress the profs, or do they not really put much stock in those?

The thing is that even if you got in, you will be having a very very difficult time surviving the program, let alone competing your fellow engineers for top jobs....

Dec 12, 2009

Oh Ok.. Thanks Joe, sorry I didn't see that before. Thank you all for the responses, very helpful.

Dec 12, 2009

Another thing I remember from the info session- the head admissions lady meant fucking business.

At one point, she went around and asked everyone their academic background. One guy had a non-quantitative degree and she got on his case. When he got defensive, she asked him to come to the front of the room and solve an integral. He, of course, was unable to do so. It was pretty hilarious.

Don't believe everything you think.

Dec 12, 2009

Ouch. Yeah if I was that far behind I wouldn't even attempt applying. I mean I've definitely got some work ahead of me but I've at least had the basics (differential, integral, multivariate, etc). The programming is what I'm more afraid of. I've heard horror stories from my CS friends.

Dec 12, 2009

First off, you'll get much better help posting this on quantnet.

What's your math background? Have you taken PDEs, numerical analysis, and/or real analysis? You definitely need some programming experience (as you've pointed out), whether that be in the form of classes or work experience. Your disadvantage is that you don't seem to have much of a quantitative or programming background, and you're competing with math, comp sci, and engineering majors. You've got the finance part covered, but that's not going to make up for a lackluster math and programming background.

Why the hell do you want an MFE anyways?

Dec 12, 2009

Reiterate my QuantNet.com recommendation. Andy Nguyen is a Baruch MFE alumn, former bigwig in algorithmic trading at a major BB, and the defacto expert on MFE admissions and all other things quantitative. Graduated from the school of hard knocks and has sat in on everything from the admissions process to the hiring process to the bonus allocations. You may not like what he has to say, but he's worth hearing out.

In general, for most programs (Baruch and Berkeley are a bit tougher than most, but this still largely applies), a 790 or 800Q GRE score along with a some sort of indication of programming ability and probability based calculus course somewhere on your resume is most of what it takes to get in. Graduating is a different story.

Dec 12, 2009

I will definitely post to Quantnet. IP you are probably right, I probably won't like his answers, but knowing where I stand for sure will be helpful. JDawg, I have taken PDEs, but not numerical/real. As to why I am considering the MFE, the company I work for is heavily IT oriented, so I figured if I had both programming and improved quant skills under my belt it would be more beneficial to my growth/advancement at the company than MBA or MSF. Plus, the degree sounds interesting. Thanks!

Dec 12, 2009
MonkeyWrench:

I will definitely post to Quantnet. IP you are probably right, I probably won't like his answers, but knowing where I stand for sure will be helpful. JDawg, I have taken PDEs, but not numerical/real. As to why I am considering the MFE, the company I work for is heavily IT oriented, so I figured if I had both programming and improved quant skills under my belt it would be more beneficial to my growth/advancement at the company than MBA or MSF. Plus, the degree sounds interesting. Thanks!

MSF is a much better option!

Dec 12, 2009
MonkeyWrench:

I will definitely post to Quantnet. IP you are probably right, I probably won't like his answers, but knowing where I stand for sure will be helpful. JDawg, I have taken PDEs, but not numerical/real. As to why I am considering the MFE, the company I work for is heavily IT oriented, so I figured if I had both programming and improved quant skills under my belt it would be more beneficial to my growth/advancement at the company than MBA or MSF. Plus, the degree sounds interesting. Thanks!

This is the problem, BTW- most MFEs wind up back in IT when they graduate. It adds $5-10K to their salaries but does not help them advance. It just turns us nerds into super-nerds.

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Dec 12, 2009

IBD? No, they have almost no relevance. And it makes no sense. Why would someone spend 100k+ and a year or two on getting a degree that has little relevance to their desired career path.

Dec 12, 2009

Perhaps, but only if the graduates are not the stereotypical quant (engrish and/or huge nerds who have never thrown a ball in their life...hey I said stereotype).

After all, at the end of the day banking is sales. Yeah, at the analyst/associate level you are locked in a closet under fluorescent lighting but to progress to VP, and definitely to make MD, you have to be able to bring in biz. Excel time is over and it's time to catch a plane and do some hand shaking. The MD's I have met are almost all guys I would want to hang out with socially...though granted we were in social situations at the time. The media might use a variety of adjectives to describe bankers but "slick" usually comes before "brilliant".

The other consideration is whether someone who has a financial engineering background would even enjoy IB. I would think someone who has been doing that kind of high level quant stuff would be a bit nonplussed when they're asked to format a slide deck for the nth time. Maybe I'm off base but I would think those types of people would want to go a place they could both use their noodle AND make some noodles i.e DE Shaw or a Renn Tech type shop or derivative heavy groups at a bank.

Dec 12, 2009

I totally agree with you, most quants I have met have personalities of a wall, but there are a few who take this 1-yr option and merge into the industry.

Dec 12, 2009

I think the better question is why are you going for a simple analyst position. If you have some solid experience and good leadership experience you should push for an associate position. I agree that a MFE is kind of wasted in a traditional IB role, but I am sure if you are focusing on different areas you might be seen as more valuable. Structured products might be a good area.

Masters in Finance HQ - The #1 site for everything related to the MSF degree!
MSFHQ

Dec 12, 2009
AnthonyD1982:

I think the better question is why are you going for a simple analyst position. If you have some solid experience and good leadership experience you should push for an associate position. I agree that a MFE is kind of wasted in a traditional IB role, but I am sure if you are focusing on different areas you might be seen as more valuable. Structured products might be a good area.

Analyst because a lot of financial engineers take on the masters program straight out of undergrad, and because it is one year in length, the analyst role makes sense.

Dec 12, 2009

"Analyst because a lot of financial engineers take on the masters program straight out of undergrad, and because it is one year in length, the analyst role makes sense."

That depends on the bank. Even if you are straight out of undergrad and then on to MFE program, few banks still give you associate, or at least senior analyst position.

Dec 12, 2009

Yeah, you are right. I think the typical masters student has 1 year or less experience, but supposing you had solid experience and wanted something really challenging while only leaving work for 1 year I could see you making a persuasive case that a MFE with appropriate WE could get you into an associate role. I member on this site is in Princetons MFE program and he says a lot of people get associate positions.

Masters in Finance HQ - The #1 site for everything related to the MSF degree!
MSFHQ

Dec 12, 2009

MFE programs give ZERO preparation for I-banking. Even if the MFE guys have great people skill (and many definitely do, despite the stereotype), the curriculum basically covers no accounting or corporate finance. However, I think if you're analytical enough to go through a MFE program, you can probably pick up the "other stuff" on the job. I can only speak for S&T, but I imagine this is similar in I-banking.

On the other hand, I have a friend with a MS in math and is getting his MBA. He is interning as a quant strategist on the I-banking team at GS. But his interview was just like most quant interviews, by a physics PhD in the final round, no less. I am pretty sure he's still considered a quant.

If you are interested in quant stuff, and still want to do I-banking (or at least leave that option open) - check out dual MFE/MBA programs. Many top MFE schools have it (e.g. NYU, Columbia, CMU). Based on my experience, the dual degree is highly prized.

Dec 12, 2009

MFE -> S&T
MBA -> IBD

The former is a "requirement" only for certain product groups.

Dec 12, 2009

Do some research on msfhq.com, and search for posts on WSO where TNA commented. He's the founder of the msfhq website and knows everything about MFE/MSF programs everywhere.

Dec 12, 2009
Dec 12, 2009