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Banks prefer undergrads to MFEs for entry level jobs?

Eric Cartman

Joined
4/17/12
Messages
4
Points
11
Heard a lot of people saying that an MFE w/o work experience would probably in a disadvantaged position vs an undergrad with similar profile when they are interviewed for the same position.
Anybody knows the reason? Is it because undergrad looks cute when they can't answer a question while not so for an MFE?
 
It's because they would not have to pay the undergrad as much. That's why if you get an MFE you should theoretically have skills that undergrads do not, so you wouldn't want to find yourself applying for the same position as a bunch of undergrads.
 
It used to be said that with undergrads, you got 90% of the skills with half the attitude at half the price. That's a bit hyperbolic, but a) there is an oversupply of MS in finance people, b) knowing how to solve a PDE is of very limited use in most areas of finance and c) experience is the great differentiator.
 
Out of curiosity, what sort of positions are we talking about here, which undergrads can apply for and MFEs are interested in? Trader, trader assistant, etc?
 
Andy Nguyen said:
I know a few members here who are American undergraduates and more qualified than many MFE students.
This begs the question: why would MFE grads compete with undergrads for the same job positions?
The point of doing a very expensive graduate degree is to put you in a position to qualify for more demanding/rewarding jobs.
Click to expand...
Andy, I'd have a hard time distinguishing between an undergrad and an MS student if neither had experience. It's easy to imagine both having similar exposure to math, statistics, programming, and finance concepts. As far as risk management is concerned, experience makes a big difference.

As far as trading is concerned, most traders I know (and I know a lot) are not quants at all. When I traded, I used quantitative concepts, but for risk management (e.g. calculating hedge ratios, understanding seasonal patterns) not for generating trades.
 
I guess its depends in which country. I am from Canada and I am currently doing my summer internship (I am half way done in my MFE) in ones of Canada biggest pension funds and everybody in my department (Market Risk) has a Master degree. Actually, we are 7/8 have an MFE and the other guy has a MSc in Finance. Here, it is really hard to have a job in Capital Market without an Master degree. Also, keep in mind that were I live (Quebec), an MSc is roughly 5000$.
 
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