Curious about the MFE job options..

[vladimirpopov]

hi,
I am currently working as a technology consultant in a bank.
Been consulting for a few years now n i get paid around 140k.
im quite interested in pursuing MFE but then from the figures published I can see that I might end up earning much lesser as a quant immediately after graduating.Given that I am a product consultant my current experience would not mean much anyway so I might take a pay cut to start off.Taking all this into account,I was just curious if it would be worthwhile for me to pursue MFE.

I just want to know the risks if I do take the plunge.What are the career prospects say over a 5 year period for an average quant . All I get to hear from people I know are very high numbers which I suppose might be exception than the rule.

Please advise.
Vladimir

 

[alain]

which product?

 

[Andy Nguyen]

Consultant is always overpaid. I've worked with consultants who got paid 100$-150$ per hours (30 hours/week) so they can easily get 200K/year.
MFE salary is permanent employment based so it's calculated differently. If you have relevant experience, your salary will be higher.
There is always the risk that your experience is irrelevant to the new job so you will have to take a pay cut. Would you take a pay cut for the more opportunities that MFE education affords?
If you are content with your pay and job, I say just stick to it. 140K is a hard number to get these days.
Not everyone who starts MFE program actually finishes it, so keep it in mind.

 

[vladimirpopov]

thanks for the quick replies . Greatly appreciate it.
Well,I am a SAP/Payroll consultant. I graduated way back.
well i understand the risk of quitting my job but i have no clue regarding the potential upside.
I am totally unaware of the oppurtunites for a quant career you had mentioned..

whats the average Baruch MFE grad after a year n after 5 years in risk management/trading, reseach jobs?
I dont need the exact numbers I just need a range for me to justify the risk of quitting my current job to myself.

Its a huge decision for me so it would be great if someone could give some numerical data for
me to decide.


Thanks again,
Vladimir

 

[Andy Nguyen]

I'm not in any position to give you a ball park figure of any Baruch MFE grads one year, let alone 5 years after graduation. The figure you see on the website is only the first job offer salary.
Of the alumni I talk to, the good ones are doing very well, moving up the ladders and rewarded accordingly, as it should be. As far as I know, others still have a job on Wall Street so they must be doing something right, specially in this tough time.
Just keep in mind that you throw away the job security once you enter this path. Anyone can be out of a job tomorrow. Remember Bear Stearns?
If you want steady stream of income, then a salaried job would be better.
The various option of an MFE is that one can end up in trading, risk, research and just about anywhere. The same can't be said about SAP consulting, right?

But wait, don't get ahead of ourselves. First, you have to get into a good MFE program. It's not a trivial task and another thread all together.
Goodluck.

 

[bigbadwolf]

Its a huge decision for me so it would be great if someone could give some numerical data for me to decide.

All bets are off in the current conditions. Five years ago one could have given reliable numerical data. Not today, which is not only more volatile but worsening rapidly. In general, the stars from the premier MFE programs will find a niche for themselves somewhere -- but these are the kind of people who would always land on their feet in even the most adverse circumstances. If you think you're a star, go for it. If, like the rest of us, you're a lesser mortal, don't give up a bird in the hand for two in the bush. My exceedingly humble opinion.

 

[xoxqun]

To put things in perspective about what Andy and bigbadwolf say, here is link to a New York based MIT-trained financial engineer's story that is all over media networks.

"A man in a pinstriped suit, blue button-down shirt, and a silk tie stood in front of the Charles Schwab building at 50th Street and Park Avenue. He looked like any other investment banker on his way to lunch, except for the sign he had draped on his shoulders: "Experienced MIT Graduate for Hire." Joshua Persky is unemployed."

""It's a very difficult market," Mr. Persky said. "I lost my job six months ago, and more and more commercial banks have starting letting people off. Instead of sitting at home, writing e-mails and networking, I decided to come out and hit the streets and try to compete a little.""

""Mr. Persky, whose wife issued a press release to reporters announcing his plan, will be passing out resumes during lunch hour all of this week. Besides graduating from MIT, he most recently worked as an investment banking consultant for Houlihan Lokey. He said he is looking for work to support his five children."

""Our lease is up next week, and the kids and my wife are moving to Nebraska, where she grew up," Mr. Persky said."

"He will stay in New York, get a sublet, and continue to look for a job if this week's ploy doesn't pan out.""

Best of luck, anyone heading out in this perfect storm will need a lot of it, however, some may still be game.

 

[samiam]

Why would HLHZ need financial engineers? That's a middle market m&a and advisory shop based in LA. They don't even have a market maker and they work mostly with private companies. They're not in secondary markets. Once again, journalists really need to do some research before they start using suggestive labels in their article titles.

He's probably a computer engineer working in finance. Hence the title financial engineer. :wall

Edit: oh never mind. The title of the article is "out of work banker"

 

[bigbadwolf]

He's probably a computer engineer working in finance. Hence the title financial engineer.

He has received some response:

"Yesterday, I received a phone call from a recruiter in Singapore, who was looking for a quantitative hedging specialist for its Tokyo office. I've also been contacted by a hedge fund in Boca Raton, whose[sic] looking for someone to value derivatives," he said.

But the situation is:

He recently interviewed with a hedge fund and investment bank but said competition is fierce given the rising tide of unemployment in the financial industry.

"Big commercial and investment banks are laying off all kinds of people. It started back with the subprime mess and the situation has gotten worse and worse," said Persky.

It's crystal clear (at least to me) that financial markets, and by implication employment patterns in the industry, are going to change rapidly beyond recognition. The golden era is very likely already in the past. So a bit of caution wouldn't be amiss.

 

[samiam]

Two things going against the guy (IMHO).

1) 48 years old.

2) Valuation consultant.

I actually interviewed with HLHZ back in 98 after I graduated from school. They are indeed a valuation house that does M&A and public offerings to middle market companies making around 50 million to 500 million a year in sales. But they don't trade as far as I'm concerned. Strictly bankers.

But I wouldn't understand why HLHZ would need a valuation consultant. They have plenty of analysts working on valuation fresh out of college. It seems like the guy has experience doing CPA/CFA kind of stuff, ie excel spreadsheet, financial statement dcf and comp analysis. Simple stuff. Which makes me question the link to this forum and people using him as an example to worry about employment conditions for MFE's.

Because HLHZ is supposed to be an advisory and M&A shop and that market dries up once the equity markets head south since merger activity is closely related to equity valuation, it doesn't surprise me that bankers who survive off deal flow are the first to go.

Funny story about my HLHZ interview. They asked me what my GPA was (it's not worth mentioning, it's pretty obscene to tell you the truth). They reply back saying we like to see candidates with GPA's over 3.5. I reply back, "If I had a 3.5 or over GPA I would be interviewing with GS, MS or DLJ (now part of CS)."

Oops, ding right there but that was just a low eq answer I blame to youth and inexperience.

Anyways, my answer was like the talk of the firm for a whole week. They were shellshocked or something I believe. I guess it was like a slap in the face. But it was also completely true. Any of my fellow grads majoring in finance with gpas anywhere even near 3.5 or above all worked for the bulge brackets and not HLHZ. If they wanted to work in LA, DLJ was happy to hire them too.

By the way, Houlihan is also a good restaurant. :D

I hope the guy gets an offer from somebody soon. He has definitely achieved his goal in getting his name out on the street and around the world. I dare say someone would be willing to hire him just for advertising sakes as hiring him alone would be cause for getting the companies name out on the street/world.

 

[samiam]

A few thoughts come to mind when regarding the job market, prospects, and this story with the sandwich board:

I too am an undergraduate of a reputable school. I currently am also unemployed and although I was able to get two job offers earlier this year, they are not in the same line of work like banks, and ultimately I was unable to take up those offers because of personal situations prohibiting me from working. However, it took me quite a bit of legwork to even get that.

As you progress in age and experience, it becomes increasingly important to make yourself somehow irreplaceable to the company. You can accomplish that through either promotions and high titles which would have your company and the market perceive you to be an expert in the field, or you can accomplish this through graduate degrees (preferably professional) or licenses and certifications.

I really sympathize with this person. I can go ahead right now and send my resume out to all the companies on monster, careerbuilder and hotjobs that would look for a financial analyst (my most relevant job title at this stage in my career) and I know that I would receive a call or email back in about 1 out of 30 ads I reply to, if that.

I consider myself to have pretty good experience, the right education and name brand. However, what doesn't work for me is that I neither have a professional graduate degree nor something like a CPA of CFA.

I know that given one or more of these, my chances of employment, and my stability within the corporate organization would improve multi-fold.

After a certain point, a company starts looking at a person as either just 1) really competent regardless of where he/she went to school or what licenses he/she holds or 2) really competent because of the extra schooling/training he/she got such as an MBA or the licenses/certifications. That has been my experience.

Judging from this person in the article, it seems as if he is either an MIT undergrad or an MIT post grad in a hard science. If he was an Sloan MBA, I would believe he would not be in the situation he is currently facing.

That is really disappointing to know considering what a lottery like situation it is to get acceptance into a school like MIT, undergrad or grad.

This all being said, I believe that with MFE's, it's going to become inevitable that if trading becomes increasingly programmed, and the world will lean to having equations spit out trading decisions as opposed to human discretion, these programs will become devalued. That is just my humble thought as systems are supposed to take the guesswork out of reacting to human emotions used in trading decisions. When you have a bunch of programs all designed to do the same thing by people who got the same education, then the profit opportunity becomes minimized imo.

But of course, since banks seem to think this is the way to go, and it makes their business more justifiable, I really can't see MFE's to be hurting for work. I think they would just have to be willing to do other things than just work in the front office where the real money is. Then again, you also have your commercial banks, insurance companies, and large asset managers who are also going to need people adept at computer engineering and math.

Compared to a guy that just knows spreadsheet valuation work, that stuff is rocket science. If GS won't snap up an MFE grad there has to be a ton of other non-banking, regular industry companies looking to find guys like that to work in their financial controls or risk management.

I believe the MFE degree will be perceived more and more as a generalist degree going down the line as regular finance becomes automated. Look at any company nowadays and you have a bunch of programs designed by finance and computer geeks that design macros programs to run a simple variance calculation of this months actuals versus the forecast you made last month. Even the forecasts can be automated.

It no longer makes sense to just learn the principles of corporate finance and accounting and expect to be useful to even a regular company.

That is really my "hedge reason" to get the MFE because I know that companies are going to desire the quant and computer knowledge these grads have. Of course, I really want to work in the front office as a trader, but I have to be realistic. There will always be room for the top 20 MBA grads who will be groomed to be upper management types. But if you're known as a hards skills guy, ie an Asian guy like me who gets called from recruiters all the time because I indicated I have some ERP systems experience as an enduser on my resume and now people expect me to be a IT guy or implementer, just having a regular finance degree and expecting to contribute to the company becomes more and more of an anachronistic proposition considering the progression of the times and technology. The MFE should be a big buffer against this. Or so I hope.

 

[xoxqun]

Para-phrasing bigbadwolf about the current situation: "All bets are off in the current conditions."

Playing devil's advocate to last post by samiam.

How to Go from $1 Billion to $61 Million Really Fast

Which Wall Street CEOs are headed for unemployment next?

Lesson: it is hopeless to "predict" with any sense of certainty based upon "past" data, logic, and assumptions. Well, there lies the opportunity!

 

[AV-Wolverine]

When I told my company about my desire to get an MFE degree, they actually were really supportive and told me about how they're now using MFEs to build models for the corporate treasury. They said there's a lot of scope for financial engineering with them and encouraged me to consider them for internships/job applications. They mostly have Phd grads in math/comp sci., but also got a person who was laid-off from GS and wanted to come back to his home state.

Is doing quantitative analytical work with a large company's corporate treasury (risk models, hedging strategies, asset-backed securities, etc.) a realistic option that would be considered among those initially inclined to S&T roles? It may be less glamorous or not pay as much, but would it still be a great job for an MFE major?

I just wanted to know if this focus is a viable strategy for placements after getting an MFE degree

 

[JDawg]

Funny story about my HLHZ interview. They asked me what my GPA was (it's not worth mentioning, it's pretty obscene to tell you the truth). They reply back saying we like to see candidates with GPA's over 3.5. I reply back, "If I had a 3.5 or over GPA I would be interviewing with GS, MS or DLJ (now part of CS)."

What a baus. You got my respect.