PhD in Finance vs. Graduate Program in Investment Banking

[Memphis]

I have recently finished my Master studies in Finance and now I have the following two options:

1. PhD in Finance at a Norwegian Business School. It's a 4 year program, including a scholarship. The school is not bad but I think there are at least ten better ones in Europe.

2. A trainee program at DZ Bank (it's focussing on Germany and is probably not known out of Germany). There, I could see different areas such as equity research, sales and trading and then remain at the one I liked best.

My problem is that I don't know how to decide. In fact, I'm quite sure that even if I had the PhD already I would like to go for a career in banking first, especially in trading. However, my Master is actually a German diplom in business adminstration with specialisation in Finance and hence it didn't go as much into details as a real Master. Therefore, I still feel the need to improve my math and even more my programming skills. To do so, a master in financial engineering would probably the best choice, but taking into consideration that I am already 25 and my German degree is equivalent to a Master, I don't want to spent two more years and more money for another master degree.
Also, I read that a PhD in Finance does not really help to get into banking because you don't learn what you need for a quant position but it is considered for people who would like to stay in academia.

1. Do you think the PhD would still be of value in my case? From a logical point of view, I don't see much reasons for doing it - however I have the feeling that it is a once in a lifetime possibility.

2. Suppose, I finish the PhD: Would it hurt me in order to get a trading position because I'll be regarded as some weird theoretician?

3. Do you think it is possible to get back into academia after working in an investement bank for let's say ten years (supposing I finished the PhD)?

4. Do you think I have a realistic chance to get a job as a Finance prof at a US university with a PhD from a Norwegian business school or do they require US PhDs?

Thanks a million for any help and advice.

 

[Ken Abbott]

PhD in Finance

If you want to teach, get the PhD. If you want to practice, go to work. Experience and perspective are precious. Grad schools churn out thousands of quant-to-be's. There's no substitute for hands-on experience.

 

[bigbadwolf]

Do you think I have a realistic chance to get a job as a Finance prof at a US university with a PhD from a Norwegian business school or do they require US PhDs?

I don't think any Norwegian university is on the map in terms of global recognition. Some Swedish universities (Uppsala, Gothenberg) are, in comparison.

It's an open question as to whether the Norwegian PhD will even prepare you theoretically for quant work. Can't tell till I've seen the courses you have to take.

The question is not your age and the equivalence of your diploma to a regular master's but whether any ranking MFE program will accept you given your academic background and your weak math (as you concede).

Opting for the trainee position might be a good idea.

 

[Connor]

I say go for the trainee program, you shouldn't need another degree masters or phd to do some of the things you listed.

It is possible to go into academia to teach with experience and no PhD. In the US and the UK I have had professors without PhDs but with real world experience.

Regarding #4, I asked a similar question of my US professors and they said I would have little chance of getting a job in academia in the US after doing a European PhD unless I went to a big name (Oxford, Cambridge, INSEAD, etc). So while you don't have to have a US PhD, to go from Europe to US in academia you will probably need a better known brand.

 

[Memphis]

Thanks for your answers!

Regarding the coursework: It consists of common economics courses which are probably quite useless in terms of quant work and some electives (usefull ones include derivatives, econometrics but others are corporate finance, emperical finance and banking) - all in all, I guess this does not prepare for quant work at all cause programming and pure maths courses are missing.

This leaves me with one more question: I know it's quant and not a trader's forum but where do traders usually go to after let's say 10-15 years of work when they feel they want to try something else, probably less stressfull? How does the typical route look like?

 

[Ken Abbott]

where do traders go

They go into management, risk, audit, ops, banking, capital markets - all over. Trading provides some of the best prep for many jobs in finance. I'd be willing to bet that most ex-traders didn't do it for 10-15 years. More likely 2-5. It's one of the hardest jobs you can do.