In current times, most companies are looking for people with senior management potential. In their view, MBA graduates have an above-average chance of fulfilling this need, but they are careful not to raise expectations too high. They also want people who can be effective and efficient. Many MBA students wanting to change career direction can, therefore, have difficulties in the short term. For instance, an engineer trying to move over to finance may be successful but may be restricted to a job as a financial analyst specializing in the engineering sector.
Why have an MBA degree with a specialization in Finance?
Financial decision-making forms the crux of business operations in any organization. The core courses are designed to equip professionals serving in general management roles and core finance professionals with the relevant expertise to deal with the financial decision-making process, considered now as part of a crucial set of all business functions. Those studying financial accounting learn to handle external communications with shareholders; management accounting introduces students to matters related to internal perspective control and techniques to handle information within the organization and checks the effectiveness of operations and services. Corporate finance covers investment decisions and introduces the whys and wherefores of financial risks.
A specialization on financial markets helps students understand the role of financial markets, their operations and risk management instruments. Finance forms a part of the core courses mandatory for the flagship programs of most renowned business schools.
Requirements change as markets change
Employer’s recruitment operations are becoming much more short-term in response to fast-changing markets and technologies. Companies frequently look for specific mixes of skills, and the mix can change rapidly. In the mid-1990s, for example, there was a strong demand for German-speaking MBA graduates which could be traced to a number of leading German companies wanting to introduce a more international culture and the need to expand into East European countries, where German is widely spoken. This was followed by a demand for graduates able to work effectively in the fast-growing markets of China and the Pacific Rim, where candidates needed residence qualifications as well as the appropriate languages.
Employers seem to have lost much of their suspicion of MBA graduates, even in some non-traditional areas. A few years ago many human resources directors, especially in Europe, preferred not to employ MBA graduates on the grounds of their arrogance, their excessive expectations of career and salary potential, and the difficulty of fitting them into established teams and career systems. Managers saw MBA graduates as being programmed to want to run things immediately, without taking the time to gain the practical skills they needed or to learn how to manage other people. As organizations became flattered, destroying old-style career structures and putting heavy emphasis on teamwork among equals, such attitudes were even more alien. Now the experience of most companies seems to be that much of the perceived arrogance has disappeared.
Practical leadership and management skills. Management education has changed significantly over the last few decades. Previously it focused on quantitative analysis in areas such as finance and operations, with little emphasis on other aspects of organizational life. As a result, MBA’s were often seen as bean-counters myopically focused on data and out of touch with the challenges managers face in the real world.
MBA programs responded by expanding their offerings in areas such as strategy, organizational behavior, and leadership. B-school curricula are still intensely quantitative, but as Stanford Dean Garth Saloner told McKinsey, “The [quantitative] skills of finance and supply chain management and accounting and so on, I think those have become more standardized in management education, have become kind of what you think of as a hygiene factor: Everybody ought to know this.”
A cultural fit for management consultants
Despite the dot-com craze, management consultancy and financial services are still significant MBA job markets. There is a reason. They attract MBA graduates not so much because of high salaries but because graduates can fit into the culture more easily. Such employers know what MBA graduates can do and how to use them effectively, and are prepared to pay the price. The graduates do not have to battle against antagonism or misunderstanding and there are likely to be others with similar backgrounds on the staff. Their academic training is suited to investigations in, for example, consultancy and mergers and acquisitions work.
According to the U.S. Bureau of Labor Statistics (BLS), financial managers can expect moderate to a faster-than-average growth of 12% from 2014-2024, along with serious competition for available positions. Depending on the specialization, the BLS anticipated an increase in jobs of 7%-16% for financial professions between 2014-2024. Some popular career paths for MBA in Finance graduates include:
Senior financial analyst
Financial controller or director
Manager of a finance department
Chief financial officer
Commercial or investment banker
Real estate or insurance finance manager
Business leaders at Booz Allen Hamilton, a strategy and technology consulting firm, discussed areas of change that could be implemented at graduate business schools, in the article ” What Business Needs from Business Schools” They suggested that more courses were needed to teach graduates to effectively manage individuals and team-driven organizations, provide tools for problem-solving and provide better grounding in theory. They also recommended more courses outside of the traditional curriculum. (Companies are in need of strategic candidates, not walking resumes. Learn more in Business Grads, Land Your Dream Job.
Studies have revealed that most working executives want business schools to place more emphasis on quantitative, strategic, critical decision-making and communicative skills, which are sometimes best developed in classes outside of business schools. If you want to get the best possible preparation for the finance world from your undergraduate education, put some thought into which classes to take, that may fall outside the finance curriculum.
Finance majors prepare for support the careers of working professionals by studying topics about “planning, raising funds, making wise investments and controlling costs”.
Personality Takes You Far in Leadership Roles
You will need excellent analytical and mathematical skills to get through your MBA program with a concentration in finance, but that’s not all that counts. The types of careers that you will be qualified to pursue also require great people skills. If you have an outgoing personality, it will take you very far in this field. Being an excellent communicator is also crucial, so if that’s one of your personality traits, you are sure to excel not only in your MBA program but in your career too.
When applying for jobs, you will be going up against many others who have MBAs. Far fewer of them will have concentrations in finance, however, because this particular specialization is narrowly focused and, in many ways, among the most difficult that you can choose. All this is to say that earning an MBA with a concentration in finance is a major accomplishment, and it definitely impresses prospective employers. With this credential, you will stand out from the crowd in a big way, and that will help you advance in your career in a variety of ways.
The hard work that you put into earning your MBA with a concentration in finance now will all pay off when you are able to take your pick from a wide array of excellent careers that command incredible pay and many other great benefits. There are plenty of other options, but few open as many doors as this particular specialization.
Variety of Career Opportunities
If you’d like to keep your options open after earning an MBA, a concentration in finance is a wise choice. With this degree, you’ll be able to find jobs across a variety of industries, including commercial and investment banking, financial planning services, corporate management and international financial management. You will be a desirable candidate for many types of businesses too, including banks and credit unions, brokerage firms and insurance companies. You never have to worry about being backed into a corner when it comes to job opportunities.
With this degree, you’ll be able to find jobs across a variety of industries, including commercial and investment banking, financial planning services, corporate management and international financial management. You will be a desirable candidate for many types of businesses too, including banks and credit unions, brokerage firms and insurance companies
Evaluating portfolios, funds and allocating investments in various products to enhance growth of assets under management
2- Industry Research:
Studying long-term trends and overall movement of parameters like supply, demand, prices, and costs for a particular segment (say E-Commerce) to come up with a view of investment.
3- Planning & Budgeting:
Being a financial controller in a corporate, helping allocate budgets to various business units and estimating costs/revenues for each of them.
4- Investment Banking:
Advising businesses on strategic movements like acquiring a company, merging with one or even help in fundraising, etc.
5- Risk Management:
Coordinating with traders and operations teams who invest surplus firm money in daily securities. You’ll advise on which trades can be passed, how much risk can be assumed, etc.
6- Treasury Management:
Actual trading activity, tracking various markets and taking positions/investing to either hedge current risk or to enhance the return on investments on a large scale. This is the wholesale version of Portfolio Management (done for firms rather than individuals)
Banking & Insurance
Here although you would require a specialized degree for actuarial sciences, Banking options are pretty much open to MBAs.
Helping businesses construct insurance products and pricing insurance premium based on calculations in health, life expectancy, asset life, etc.
8- Commercial Banking:
Typically helping corporates with their working capital, loans, and other credit-related compliance
9- Retail Banking:
Addressing individuals with Savings deposits, loans in education and health, cross-selling products in insurance, etc.
10- Insurance Underwriting & Claims:
Approval of insurance policies, evaluating return policies in case of a claim filed for the insurance, renewal conditions, etc.
Here you come in as an expert/adviser and consult the business on your domain. While most of these require a dedicated course, Strategy & Consulting is something an MBA in Finance can easily get into.
Crunching numbers, reporting and documenting various accounts to form a view of how well the company is doing
Running checks on the numbers and business processes to show that the accounts actually show a fair view of the company
13- Financial Planning:
Unlike the name suggests, helping individual clients in planning their personal life goals by ensuring savings and investments to be available when required
Providing legal advice on various compliance changes, scanning legislation, similar cases and staying updated about latest affairs
15- Strategy & Consulting:
Helping firms solve a problem by coming up with solutions for cost reduction, helping to verify and perform independent diligence on investments and market opportunities, etc.
The Bottom Line
Students studying finance will be tasked with big responsibilities in their careers. They will have to manage the flow of money at their companies and identify financial risks and returns to make effective business decisions. Those finance majors who want to have an edge over their competition, both during the initial post-graduate job search and throughout their careers, will take advanced mathematics, accounting, economics, psychology, communications and writing courses to gain a deeper insight into their jobs and a better ability to work effectively with people.
In February 2016, PayScale.com reported high salaries for MBA-holders in a variety of financial professions. Finance analysis managers earned a median annual income of $81,250, while a Chief Financial Officer’s median annual wages stood at $121,942. PayScale.com also noted that experience also played a large factor in take-home pay, with entry-level MBA graduates earning a median salary of approximately $61,748, while those with five or more years’ experience saw a median salary of $83,475.
Earning an MBA in Finance gives you the opportunity to earn higher salaries and qualify for more advanced positions.
So ask yourself:
Q. What market am I in now? What markets might I seek to enter in the future?
Q. Who’s interested in my services? How might this change if I had an MBA in Finance?
Q. How are MBA’s perceived in these markets? What signals does an MBA send in these markets? What stereotypes (both positive and negative) might I face as an MBA?
Q. What is the specific reputation of the MBA programs I’m considering? How are these schools and their alumni viewed within my desired markets?
Q. And what alternative means are available to me to send the signals I desire to communicate?
The answers to these questions will help you take your decision. If you would like to meet with our counselors and understand how can an MBA from reputed university help you to progress in your career, get in touch with us today.
At Westford University College, we have partnered with the University of Wolverhampton for MBA programs. If you are a professional in the finance domain, an MBA from a reputed and renowned university like Wolverhampton will help you boost your career to new heights.
Post written by:
Dr. Raman Subramanian
Sr. Faculty – Finance, Banking and Management