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Welcome to MBA Podcaster—the only source for cutting-edge information and advice on the MBA application process. More than 100,000 Americans graduate each year with an MBA degree. While it’s the single most popular Master’s Degree to get, depending on where you are now and your future career goals, a Master’s in Finance or Economics might be the better choice for you. It might even be a good idea to get both. We’ll explore the reasons to choose one degree over another, we’ll also go over some important things to consider while sorting through your options, we’ll hear from directors at two schools that have both MBA and Master’s in Finance programs, and the Director of Career Services at a prominent university.

Like anything else in life, there isn’t a single road to a career in Business and Finance. Getting a Master’s in Finance or Economics is, of course, one way; getting an MBA is another. Fiona Sandford is Director of Career Services at the London School of Economics and Political Science. She says the MBA track or the Master’s in Science track can lead to the same career but using different approaches. “The traditional MBA course exposes you to a wide range of management disciplines, and gives you a way of thinking about management and a career in that area. An MSc in Finance or an MSc in Economics gives you a very rigorous academic approach to finance disciplines or to economics. But it doesn’t, by any stretch of the imagination, preclude you from going on to developing a career in Management as many students do. So I think it depends on individual learning styles.”

Sandford says a Master’s in Economics will open the doors in a wide variety of fields. “Certainly, if you want to become a professional economist, you only have one choice, and that’s to do the MSc in Economics—although it doesn’t limit you to becoming a professional economist. And many of the destinations that our students go on to are very similar to those destinations that you would see from an MBA. Some of them go on to do Development Economics and NGO’s. The majority of them go into investment banking—many, many of them go on to becoming professional economists. And a substantial proportion—varying from year to year between 15-25% will go on to do a PhD in Economics.”

Jeffrey Ringuet is Professor and Director of Graduate Curriculum and Research at Boston College’s Carroll School of Management. The Carroll School offers MBA degrees as well as Masters in Finance and Accounting. He says consider your background and experience if you’re deciding between an MSF or MBA. “If you’ve got someone who has some management background—they want to be a financial analyst or they want to be a CVA—then clearly, the specialized Master’s Degree is the direction for them to go. But if you’ve got someone who doesn’t have management training prior to coming into the graduate school, then the MBA will provide them with that management training that they haven’t had. I think they really need to pick a degree that’s going to build on what they’ve done prior to coming to graduate school and help prepare them for whatever change or whatever new direction they want to pursue for when they leave graduate school. So I think it’s a real match from what you’ve done and where you want to be going when you’re leaving.”

Joe Fox is Director of MBA Programs and Co-Director of the Masters in Finance Program at the Olin School of Business of Washington University in St. Louis. He says choosing which degree to get can also be a matter of timing. “It has to do with the time of your life—kind of where you’re at. It has a lot to do with your ambitions and whether you’re trying to follow an ambition that has a shorter-term objective or a longer-term objective. And then, ultimately, it has to do with what fits your long-term goals. So let me give you an example. It wouldn’t be surprising at all to find somebody who gets an MS early in their career to get them started on that career path, and later on, comes back to get an MBA degree to enhance or to embellish the flexibility of their career progress. So I think it would be a fair thing to say—and we hate to make generalizations—that younger students earlier in their career often look at an MS program as being more relevant to them at that point. Slightly older students—or younger students with a broader vista, I guess—find that an MBA might be more relevant. Now, again, that’s a gross generalization, and you hate to say it because the minute you do, it doesn’t apply to somebody. But it’s a pretty fair assessment in a bigger picture, I guess.”

A lot of Masters in Finance programs have no work requirement at all. Fox says that’s also why younger students go for MS programs. Oftentimes, they don’t have the work experience necessary to apply to many MBA programs, and MS is a good way to get your foot in the door. “Traditionally, MBA students have been out of school for three to five or six or seven years. Most MBA students at most of the top schools on average were out for four and a half, five years. They were 27, 28 years old when they came back. So they’ve kind of been out there; they’ve done something; they’ve tried something; they’ve made a move in their career. And they’re either coming back to try to jump start a movement in the same career path—we call those career accelerators, so they’re looking to accelerate their career—or they might be coming back to be a career switcher. I’ve been working in Marketing but I want to go to Finance. Or I’ve been a high school teacher and I want to go in to Marketing. So there’s switching that goes on. And there’s some number of people who have been out long enough to realize what they don’t want to do—and that’s usually what it is that they’ve been doing. But they’re not 100% sure what it is they do want to do, so we call those career seekers. And all of them can be very well accommodated by this general-management approach. All of them can take advantage of the fact that the majority of them, anyway, have been working and have done something, and are either looking to use that to move ahead, or to move in a different angle. The MS students are almost all career starters or accelerators. They’re either the very young who are just getting started, and they’re trying to get the best set of qualifications and skills for the job they want to do, or they’re people who are trying to get into that field and haven’t been successful yet and are trying to find the right package to bring to get them a chance to get into that field.”

Time and cost are also factors in deciding between the two degrees. MS programs are typically one year; while MBA programs generally run for two years. MS and Finance programs focus on increasing your understanding of finance and financial markets. A Finance Degree can lead you to positions in investment banking and corporate finance—much like MBA degrees. But MBA programs have a broader focus with an emphasis on leadership and leadership potential. Fox says you can gauge which degree would suite you better by where you want your career to go. “Whether it’s an MS in Finance, or in Accounting, or Marketing, or in Operations, or anything; the primary purpose of getting that MS degree is to enhance your knowledge and skills in a very specific area which then, enhances your career and job potential in that specific area and gives you kind of a rocket boost, but in a straight line—kind of straight up in that particular function or field. At some point, people find that their careers are either in need of a boost to get beyond that function itself and get more into the managerial role maybe related to that function, or they find that their interest in starting to veer off into a different direction. And it’s often that point in time when a student decides an MBA is the right option for me. The MBA—by the fact that it is not disciplinary-based; it’s not a single discipline, but rather a broader set of disciplines that are studied—tends to have greater options, greater flexibility, a wider array of possibilities coming out the back side. So even if you got an MBA and focused some of your elective course work in a particular field, you still have taken a vast majority of your coursework across a wide variety of fields and have really been trying to develop your general management skills along with trying to enhance some specific skills.”

At the Olin School, and at many business schools, some of the MBA curriculum overlaps with a Masters in Finance classes. Fox says but, again, the Finance Degree is much more specialized. “In our MS and Finance Program, the MS and Finance students will intersect with our MBA students in some number of classes. There are commonalities to the two degrees; whereas, the MS and Finance students are taking almost exclusively those courses that are kind of hard-core in the finance area or in the financial modeling or in the quantitative methodology that supports the financial modeling. Their whole package is based around that somewhat narrowly-defined career and job path that they’re looking to take. So most of the coursework is finance and finance-related. We certainly have the room to embellish it a little bit, but that’s primarily what it is. In an MBA program, the majority of the coursework is across the various dimensions of business. So you’re taking marketing, and finance, and operations, and org behavior, and strategy, and economics, and all the other underpinnings. And then on top of that, you get to layer in some more specialized courses; but that’s the minor element of what you do. The major element of what you do is the broadening general management aspects of studying across the disciplines and, quite frankly, learning how to apply and learning how to integrate all of that stuff into kind of a sensible, general-manager’s view of how to move forward.”

At the Olin School, and at many business schools, some of the MBA curriculum overlaps with a Masters in Finance classes. Fox says but, again, the Finance Degree is much more specialized. “In our MS and Finance Program, the MS and Finance students will intersect with our MBA students in some number of classes. There are commonalities to the two degrees; whereas, the MS and Finance students are taking almost exclusively those courses that are kind of hard-core in the finance area or in the financial modeling or in the quantitative methodology that supports the financial modeling. Their whole package is based around that somewhat narrowly-defined career and job path that they’re looking to take. So most of the coursework is finance and finance-related. We certainly have the room to embellish it a little bit, but that’s primarily what it is. In an MBA program, the majority of the coursework is across the various dimensions of business. So you’re taking marketing, and finance, and operations, and org behavior, and strategy, and economics, and all the other underpinnings. And then on top of that, you get to layer in some more specialized courses; but that’s the minor element of what you do. The major element of what you do is the broadening general management aspects of studying across the disciplines and, quite frankly, learning how to apply and learning how to integrate all of that stuff into kind of a sensible, general-manager’s view of how to move forward.”

For those of you who feel you’d benefit from both the MS and MBA degrees, the Carroll School of Management offers a dual-degree program. Ringuet says you can also opt for this route. “I think it’s good for someone who wants to keep their opportunities open. You’ve got the depth of knowledge that a Master of Science degree connotes and you’ve got the breadth of knowledge that an MBA speaks to. So I think it gives you more opportunities coming directly out of program. The trend is that degrees are maybe getting a little closer in that an MBA seems to be to go to programs that allow students to get greater depth, and we’re doing that as well here. And we’re going from a program where students could take six electives in an area of specialization to one where they might take eight or even ten electives in an area of specialization. And some schools have really pushed that even farther than we have in terms of the degree of specialization out of the MBA. But I think the risk in going too far on that path is that you lose that broad management context that an MBA brings. An MBA really has an understanding of the big picture—the broad context of the business. And I think if you lose that, you’re losing something important. But I think that there is still the Master of Science—the specialty degree—that says depth even more than an MBA with the kind of depth that we’re building into those programs now.”

Ringuet says recruiters and employers will have different expectations for the different degrees, and they’ll usually hire according to what they need. “Typically, employers and recruiters that are looking for someone with a Master’s in Finance are looking for someone who’s got real technical skills; who’s got real deep analytical training. They’re going to be an analyst; they’re going to do heavy-duty analysis. They’re not as concerned whether that—and this is typical but there are exceptions to all of these, of course—individual has broad management skills; whether they’ve done the kind of project work that you think of that goes along with an MBA program and the kind of team exercises—not that someone doesn’t have to learn to be a team player—but they’re going to really be more of an analyst. When someone comes looking for an MBA, the expectation is that an MBA has had a broad management foundation. They’ve seen, besides finance, operations, and organization behavior, and marketing, and accounting, and information technology, and all those other things. They’ve also had some work in leadership. They’ve had some team-building coursework and project work in their program. They’ve got a broader set of management skills.”

In the US, MBA degrees are the most recognized Master’s Degree. In Europe, however, companies work differently says LSE’s, Fiona Sandford. “The MBA market has always been much more buoyant in North America than it is Europe. The approach in Europe is very much growing your end talent rather than employing someone as an analyst for two years; then sending them off to business school, and they come back as an associate. That part exists here in certain companies. But many of the major employers would prefer, or would be open equally, to taking on someone with an academic approach to work and teaching them the management disciplines in-house, if you like, and developing that on the job. So the European market values the MBA—there’s no two ways about that—but is perhaps much more open and, historically, is much more used to developing those management skills on the job and, therefore, very much values an academic, rigorous approach to postgraduate study.”

Salaries can vary between industries and positions. But Ringuet says typically MBA graduates make more than MS graduates. “I would say that if you looked at average kinds of numbers, our MBA students would probably start at a higher salary than our specialty Master’s students. And that’s as much because it’s very unusual to go directly from an undergraduate degree into an MBA. It’s less unusual to go from an undergraduate into a Master of Science degree. So students coming out of the MBA will have typically had more work experience and will be a little bit older. And that, as much an anything, places them at a higher paid level than someone coming out of a Master of Science program that had maybe only one or two years of work experience as opposed to four or five from the MBA.”

In 1960, fewer than 5,000 students got MBA degrees. Now there are more than 100,000 MBA graduates each year. With on-line, part-time, and executive programs making it easier to get that once elite degree, you might wonder if MBA’s are as highly valued. But Fox says it’s not the end for MBA’s—not yet. “There are a lot of people out there getting a lot of MBA’s and that does put the credential in a different light in some sense. But this is a free market—nobody’s forcing people to do this. And in a free market, the market works itself out eventually. So given that there is still this extraordinary supply of prospective students coming through and that there’s still demand to hire and move those people out, I’d say that we’re not seeing the end of the daylight for MBA programs. But it may be that we’re seeing a switch, a shift. In some of these MS programs that are coming up now—some of the competition for international MBA programs—really is a shift in the playing field, not a shift in whether or not MBA’s are a value or will continue to be. But I think there’s a shift in the competitive playing field out there. And that’s good; that’s actually healthy.”

For more information, advice, and to register for your weekly podcast visit mbapodcaster.com. This is MBA Podcaster. Thanks for listening, and stay tuned next time when we find out what’s the best age to get that MBA degree.