Future of Finance Industry

[mfe_applicant]

Folks,

I'm a bit concerned about what will happen to the Finance industry in future in terms of availability of jobs in pure Quant/Quant Developer/Trading roles.

From the past 2-3 years, especially after recession had struck badly during 2007-08, it seems situation has not improved much.

People from top programs like Columbia, NYU etc are literally struggling to find relevant internships these days and settle with IT related jobs if they don't find anything worthwhile.

How long will this trend continue? If at the end of the course you end up working in IT then what was the point of doing MFE in the first place. Instead, it would have been better to pursue Masters degree in Information Systems/Information Technology and the similar ones.

From what I've heard, currently there is an abundance of IT jobs in the US. Correct me if I'm wrong.

Please share your thoughts/opinions. I would love to hear them.

 

[Andy Nguyen]

Wouldn't it be nice to know the answer where the industry will be a few years later and which skills are in high demand, would it?
You should be certain that the industry is changing, shrinking with lot of regulation to cope with. You can take it to the bank that we will see more MFE programs coming out and the existing ones will increase in size.
That means more competition for admission and internships/jobs.

Regardless, the most qualified students will always find good job (maybe less glamorous/well-paying like before). The question is what are you passionate about?
And what's with attitude with IT jobs? They are white-collar, well-paying jobs compared to most. If you are international student, any stable job that leads you on a path to a green-card is a dream job, is it not?

There isn't many "pure quant" jobs around. Any job will involve lot of IT house keeping. You probably expect too much reading off the glossy infomercial from the MFE programs. They are designed to look good to attract students.

 

[mfegrad]

maybe the programs that have been having trouble with placements aren't truly top programs?

things are changing. the ability to adapt and understand how everything fits together aren't taught in mfe programs and it's these skills that will differentiate employees. it's not as simple as writing a monte carlo simulation.

 

[mfe_applicant]

Andy Nguyen
I wouldn't have spent so much time, energy and efforts preparing my application for MFE programs, had I not been "Passionate" in this field.
Secondly, getting a job is priority to me because after taking such a huge education loan to fund my tuition, if I say that I'm only interested in learning stuff, enhancing my technical skills etc. and don't care about the placements, I would be kidding myself.
So it comes down to this : -
For International students, it is almost impossible these days to get into trading/quant roles. (I sincerely hope this scenario changes in future.)
Now, post completion of the course, with a huge loan on my back, I would go for a 'Technology' job (hoping to switch to a quant role later) where some of my colleagues with a MS degree in Information Systems/IT would be doing the same thing.
In the end I think its all about relevant opportunities. No matter how passionate you are in a field, if opportunities are not there, what can you do? Is it worth having undergone so much pain, investing so much time, efforts in understanding stochastic processes, computational finance, risk management etc. and end up with an IT job?

mfegrad Columbia, NYU aren't top programs? I don't have much info about CMU and Princeton.

 

[Shantanu Kumar]

In the end I think its all about relevant opportunities. No matter how passionate you are in a field, if opportunities are not there, what can you do? Is it worth having undergone so much pain, investing so much time, efforts in understanding stochastic processes, computational finance, risk management etc. and end up with an IT job?

That's very immature.Do you think people working in IT are those who didn't attend any school or studied just some book "how to learn programming in 3 days"? Also what's so painful about studying stochastic calculus/risk management.Before advent of such specialized degree people used to learn all these things at job.
All the hue and cry about uncertain future for international students is valid only due to the expense associated with such degrees not because they are some out of world degree. Better change your attitude.

 

[darth]

maybe the programs that have been having trouble with placements aren't truly top programs?

It's not a micro phenomenon rather a systemic one... During tough times all good programs have difficulties ......
Also its not the placement per se but the quality of placement that matters.

 

[mfe_applicant]

That's very immature.Do you think people working in IT are those who didn't attend any school or studied just some book "how to learn programming in 3 days"? Also what's so painful about studying stochastic calculus/risk management.Before advent of such specialized degree people used to learn all these things at job.
All the hue and cry about uncertain future for international students is valid only due to the expense associated with such degrees not because they are some out of world degree. Better change your attitude.

Shantanu Kumar
1. Dude, when did I say that people working in IT didn't attend any school? And I don't think it becomes evident from my post. On the contrary people with PHD's in IT, Software Engineering, Mobile Communications etc. do work in IT and they are happy there.
2. There is nothing painful in learning stochastic calculus/risk management provided its useful to you in future.
3. You are correct about the "expense" part though.

 

[Jayanthan]

That's very immature.Do you think people working in IT are those who didn't attend any school or studied just some book "how to learn programming in 3 days"? Also what's so painful about studying stochastic calculus/risk management.Before advent of such specialized degree people used to learn all these things at job.
All the hue and cry about uncertain future for international students is valid only due to the expense associated with such degrees not because they are some out of world degree. Better change your attitude.

All my Indian friends are in IT even though they have different kind of degree (Mechnical, civil, computer, software,chemical, bio...sth). Why would someone want to pursue MFE, if you can get an IT job with out MFE? What is the point of investing time and money for MFE?(the term "IT" is so vague anyway). Rate of return will be low too.

Most of my MBA and MFE friends want to strike out their own at some point in their life.

 

[mfe_applicant]

All my Indian friends are in IT even though they have different kind of degree (Mechnical, civil, computer, software,chemical, bio...sth). Why would someone want to pursue MFE, if you can get an IT job with out MFE? What is the point of investing time and money for MFE?(the term "IT" is so vague anyway). Rate of return will be low too.

Most of my MBA and MFE friends want to strike out their own at some point in their life.

Jayanthan Exactly ! That's what I'm sayin
Maybe Shantanu Kumar should change his attitude and express his opinions in a more subtle manner.

 

[Andy Nguyen]

Here is a good question to ask: what is a realistic expectation for someone who will do an MFE degree (which for majority of cases is very expensive)?
1) Would getting a job as a trader/pure quant, FO position the only satisfactory outcome?
2) Would getting a salary of x>100K the only satisfactory outcome?

 

[Jayanthan]

I am not saying Shantanu Kumar is wrong. If anyone considers their rate of return purely based on money, you might be right. I don't think, it works that way

 

[bullion]

mfe_applicant

Placement is a concerted effort. It's not a simple matter of "you studied really hard and you get the best job." Success in finance depends heavily on your soft skills, so there are many things even top programs can't teach you in the classroom. For example, CMU requires all students taking classes in "presentation." Baruch pre-screens students for interviews. Berkeley director flies around the world to both recruit new students and visit recent alumni. Princeton enhances their placement by admitting mostly students with FT relevant work experience.

I have tremendous respect for Columbia and NYU, so I don't think the placement record reflect poorly on their TEACHING. However, placement also depends on

1) tradition (the banks recruit N students from school X every year, so let's do that again this year)
2) exposure (the program director pre-screens and forwards resumes of QUALIFIED CANDIDATES to each hiring manager instead of just shipping the entire stash...requiring the director being knowledgeable of bank operations)
3) demand (faculty requests input from practitioners and modifies the curriculum accordingly year after year)

In summary, those who really apply themselves outside of the classroom will always have a good shot at the mentioned positions. The standard curriculum is NOT enough. You need to decide what you want to do early on and start contacting the right people. As long as you can distinguish yourself beyond grades, you'll find plenty of opportunities here in America

 

[mfe_applicant]

Andy Nguyen I would go with 1
Jayanthan Depends on the financial stability of an individual.
bullion Great piece of advice. Thanks.

 

[DominiConnor]

I think it's wrong to model any education simply in terms of returns, frankly if you have done an MFE and still think that way, you've wasted your time and money.

Education buys you a bunch of options, so the first term we need to add is risk, education gives you more options when the fan is hit, or if the job you are in is not really what you want. That leads into personal preference, since the right job varies across people. A bit of banking operations that doesn't get much attention is actually exercising options and settling trades and again there is a nice analogy that if you don't exercise the option it has zero value, regardless of whether it is in the money or not. That expresses itself as the need to get a job, not just wait for the careers office at your school to place you, or waiting for a headhunter to call. Even if they do, they will find the roles they think are right for you that they happen to have, it's really very unlikely that this is the best option for you at any given point.

Also options have most value when vol is high, which I think we can safely say is where we are now, but also one day, 5 years, 10 years, 20 years from now it will be worse, if not for the market in general, for you personally.

So bullion is right, you need to stand out from your competitors, even if you're top of your class at a good school because the best jobs are always highly competed for. Don't imagine for a second that the hiring process is highly efficient, you might be the best person for the job you want, but trust me as a headhunter when I say that doesn't mean you will get it.

Last week my son was in a poetry competition at school he seemed to believe that because he'd mastered the text that this was good enough, it's a knockout competition so I explained to him that by the time you reach the finals the crap people are eliminated and to win, you have to beat people that are good. Jobs are like that and small differences are more important.

Soft skills are critical, one of the very first posts I ever made on Quantnet was a way for you to improve them for free.

Take up with some charity and try to get people on the street to give you money, since you're MFEs do it in the local financial district. It's brutally honest feedback, you learn about eye contact, how to spot when people are listening to your pitch and how not to be embarrassed talking to strangers. You will fail sometimes of course, but not in a way that does you any lasting harm and you can try again and again.

 

[bubblegum]

If at the end of the course you end up working in IT then what was the point of doing MFE in the first place.

You do an MFE because you very interested in the content of the course. Period.

For myself (2nd year fin. math Phd student) I would love to do an MFE afterwards. Why? Not because I thought it would help land a quant trader role, but because I LOVE to learn and study quant finance, nothing else.

You seem to be doing an MFE to land a job? And say stochastics is only 'not a pain' if you can use it in a job! For myself I spend a lot of time with stochastic processes and calculus, I would not care if I never use it in a job I just feel privileged to be able to study such mathematics, for sure I will keep on reading finance journals and so learning such maths will always be of use, regardless of what job I manage to get.

Instead, it would have been better to pursue Masters degree in Information Systems/Information Technology and the similar ones.

YES, if you a doing further study just to get a job then probably in todays climate then a CS masters would probably hold you in just as good stead to get a job, by reading some finance books on the side.

From what I've heard, currently there is an abundance of IT jobs in the US. Correct me if I'm wrong.

Yes, so do a CS masters instead!

 

[tarantino]

You do an MFE because you very interested in the content of the course. Period.

For myself (2nd year fin. math Phd student) I would love to do an MFE afterwards. Why? Not because I thought it would help land a quant trader role, but because I LOVE to learn and study quant finance, nothing else.

You seem to be doing an MFE to land a job? And say stochastics is only 'not a pain' if you can use it in a job! For myself I spend a lot of time with stochastic processes and calculus, I would not care if I never use it in a job I just feel privileged to be able to study such mathematics, for sure I will keep on reading finance journals and so learning such maths will always be of use, regardless of what job I manage to get.

Either you're rich or you're very rich. If I only loved the subject and only wanted to learn, I would self study, because I couldn't care less about the degree or the tag. I want the MFE degree in order to enhance my profile for getting a job in the field. This does not mean I don't like this stuff, it just means I want a career doing this stuff.

But either ways, why a one year MFE after a (five year?) PhD in Fin Math? Can't you learn that stuff now (if at all there are few specific parts of MFE that are not a part of your Fin Math PhD)