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PhD vs Full Time Quant Researcher

Hi all,

I am a senior student who is about to graduate and now feel a little confused about the future. I want to be a top quantitative researcher and my goal is to enter a top hedge fund. I have two options, one is to work after graduating from a master's degree, and the other is to continue to pursue a PhD degree.

I have received some offers suitable for pursuing PhD in Statistics (Uchicago and Duke stat ms) and some offers suitable for pursuing PhD in Finance (Columbia Business School FinEcon ms). If choose to work after graduation, I may need to constantly change jobs to achieve my goals.

My question is:
1. I saw many people continue to study PhD after reading MFE and finishing a decent summer intern, so I would like to ask whether the work of a full-time quantitative researcher is really as interesting as what people thought and do they have a steep learning curve?
2. Whether companys like DE Shaw and Citadel would prefer finance PhD or statistics PhD, or both have the opportunity to get into them directly?
3. What is the salary for PhD at the beginning and the salary for 5 years after MFE graduation? Assume that MFE students worked in big bank / top prop trading like IMC.
4. In the long run, is PhD more conducive to career development?

I have passion in both finance and statistics so PhD degree is not a problem, and I also hope to learn more through PhD training.
 
1. Yeah I’m a researcher at a buy side firm at the moment. Your learning curve is steep depending on what your experience is like. If you know your quantitative methods and techniques then you might have a sharp learning curve on the business side and vice versa. The job is suited for phds not because they have phds, but because they’re capable of learning new things quickly and well because no one holds your hand. If you can learn concepts quickly and maintain immaculate attention to detail, this is a good fit, because the work is great
2. Don’t do a finance PhD so you can get into a citadel. I have an undergrad and have gotten research offers at good prop trading firms and citadel.
3. don’t do a PhD expecting a massive salary boost unless you’re going to a old school firm. You’re going to end up having regrets because most of the top firms now will give an undergrad with 4-6 years work experience in quant research more or the same as a PhD just starting their career (unless you have some truly exceptional research relevant to the firm or some prior work experience) Also IMCs comp isn’t that great, they lock a lot of it away behind deferred comp to force you to stay at the firm
4. I’m the son of two phds and work with phds daily so I can take some sort of stab at this, but I would say yeah depending on what your goal is. If your goal is to just be a quant, then no. If your goal is to maybe be a professor, or a researcher at a PhD only lab, or consult a central bank, or even start your own firm/ strategy then yeah, it will give you the skills and qualifications necessary

however given your stated career goals I don’t think a PhD is a good fit. If you’re passionate about learning about finance / stats, you can do it yourself too without taking the 4-6 year hit on your career. Top finance firms like mine or citadel don’t really care how much finance knowledge you’re bringing out of your undergrad because they feel like they can train you. If you don’t think you can get a job in the industry without a masters, then go for the subject that you’re more interested in and get the masters. Definitely don’t pursue a PhD if your end goal is just to be a industry quant unless you’re purely looking to learn
 
Kinda unrelated but sorta related to the spirit of your post, but IMO the things that make a good researcher are

1. An ability to pick up new concepts quickly
2. The ability to implement their ideas into production code
3. Having a solid understanding of financial markets. No one is expecting you to know what makes a good trade (unless you’ve got prior trading experience) because a MFE or a PhD aren’t really going to teach you that, but understanding the basic mechanics of the market you’ve chosen to work in (I.e if in credit trading you should know basic bond terminology and bond math, common trading techniques in bonds is a big plus). An MFE will help out with number 3, so if you feel like you have 1&2, post the MFE you’re probably good to go wherever.

So you can see from those skills why a PhD does well in the job, but also why someone with just an undergrad or masters can as well. It’s usually the case that the undergrads that make it into these roles hit the three criteria out of passion/ coursework (similar to phds)
 
1. Yeah I’m a researcher at a buy side firm at the moment. Your learning curve is steep depending on what your experience is like. If you know your quantitative methods and techniques then you might have a sharp learning curve on the business side and vice versa. The job is suited for phds not because they have phds, but because they’re capable of learning new things quickly and well because no one holds your hand. If you can learn concepts quickly and maintain immaculate attention to detail, this is a good fit, because the work is great
2. Don’t do a finance PhD so you can get into a citadel. I have an undergrad and have gotten research offers at good prop trading firms and citadel.
3. don’t do a PhD expecting a massive salary boost unless you’re going to a old school firm. You’re going to end up having regrets because most of the top firms now will give an undergrad with 4-6 years work experience in quant research more or the same as a PhD just starting their career (unless you have some truly exceptional research relevant to the firm or some prior work experience) Also IMCs comp isn’t that great, they lock a lot of it away behind deferred comp to force you to stay at the firm
4. I’m the son of two phds and work with phds daily so I can take some sort of stab at this, but I would say yeah depending on what your goal is. If your goal is to just be a quant, then no. If your goal is to maybe be a professor, or a researcher at a PhD only lab, or consult a central bank, or even start your own firm/ strategy then yeah, it will give you the skills and qualifications necessary

however given your stated career goals I don’t think a PhD is a good fit. If you’re passionate about learning about finance / stats, you can do it yourself too without taking the 4-6 year hit on your career. Top finance firms like mine or citadel don’t really care how much finance knowledge you’re bringing out of your undergrad because they feel like they can train you. If you don’t think you can get a job in the industry without a masters, then go for the subject that you’re more interested in and get the masters. Definitely don’t pursue a PhD if your end goal is just to be a industry quant unless you’re purely looking to learn
Thanks for your reply, it is much appreciated!

For my career goal, yes, I do want to start my own firm in the future. I think before doing that going to a top firm is a need to learn their insfracture and also it is a way to be recognized by investors. A question is what do you mean by 'start your own strategy'? I think most quant researchers will become PM one day and have their own book even they do not have a PhD degree, right?
 
Kinda unrelated but sorta related to the spirit of your post, but IMO the things that make a good researcher are

1. An ability to pick up new concepts quickly
2. The ability to implement their ideas into production code
3. Having a solid understanding of financial markets. No one is expecting you to know what makes a good trade (unless you’ve got prior trading experience) because a MFE or a PhD aren’t really going to teach you that, but understanding the basic mechanics of the market you’ve chosen to work in (I.e if in credit trading you should know basic bond terminology and bond math, common trading techniques in bonds is a big plus). An MFE will help out with number 3, so if you feel like you have 1&2, post the MFE you’re probably good to go wherever.

So you can see from those skills why a PhD does well in the job, but also why someone with just an undergrad or masters can as well. It’s usually the case that the undergrads that make it into these roles hit the three criteria out of passion/ coursework (similar to phds)
Thanks for the reply!

I think I do have the abilities but what I am facing is a more and more competitive job market. I am not from a top undergraduate school so it's pretty hard for me to find jobs in leading buysides after graduation from MFE. It would be pretty struggle for me if I start to work at sell sides. Also, I think most of the applicants are using interview book and leetcode to 'fit' the requirement of a job, instead of truly master the knowledge in statistics/math, which I think is quite boring. I am in awe of knowledge and also know my deficiencies in statistics, that's why I want to have a PhD degree :)
 
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