Call it a return to business as usual: despite the ravages of the global financial crisis on Wall Street, the financial industry has pretty much bounced back. And not surprisingly, finance-focused MBA programs remain popular among business school students.
“If you think about long-term careers, the financial crisis was not good for jobs in the financial sector,” says Jerry Warner, professor of finance at University of Rochester's Simon Graduate School of Business Administration. “But I don't think it's had a severe effect.”
Indeed, a large majority – somewhere around 70-75 per cent of Simon MBA students – tend to pursue the program's concentration in finance. According to Warner, that hasn't changed. However, the crisis has motivated some business schools to shift their approach to teaching finance.
“We've been putting a lot of attention on issues relating to sustainability aspects,” says Lawrence Chan, the admissions director at the Chinese University of Hong Kong's CUHK Business School.
For CUHK, this has included introducing a course in “Sustainable Investments,” because, according to Chan, “a lot of investors – be it the fund houses, pension funds, private equity companies – they're putting a lot of attention on these kinds of issues,” and sustainability aspects are becoming a part of some of these firms' corporate social responsibility (CSR) strategies.
Other business schools around the world have supplemented their finance curriculum in similar ways over the past few years. Nottingham Business School in the UK and the University of Michigan's Ross School of Business offer courses in “sustainable finance.” Meanwhile France's Audencia Nantes School of Management's recently re-launched MBA in Responsible Management offers a class in “responsible finance and accounting.”
A softer side of finance
If anything, the financial crisis has caused some business schools to take a more critical approach to preparing students with the skills they need to land finance jobs after the crisis.
According to Laurence Booth, who teaches finance at the University of Toronto's Rotman School of Management, “a big problem was that people had their nose to the grindstone and they never saw the big picture, they never saw the softer side to analyzing risk.”
“They saw the quantitative side but they didn't see the bigger picture,” says Booth.
For many MBA students who are interested in finance jobs, the bigger picture often requires skills beyond knowing how to analyze spreadsheets and cranking out budgets. According to CUHK's Lawrence Chan, many students end up in capital markets or financial services firms and work in client-facing roles, so they need more than just a strong technical knowledge.
“They might be an institutional salesperson, selling complex financial products to private investors, for example,” he says.
“Of course, they'll be working with a bunch of technical professionals or analysts behind them, but the skills that they need in that role will be quite broad.”
Somebody in a role like this would need to not only need the quantitative skills to understand the financial products themselves, but also know-how to interact with analysts, and have the interpersonal skills to be able to make sales.
And for many other finance roles, these “soft skills” are extremely important.
“Recruiters are demanding students who are ready to hit the ground running, not just technically or at a macro understanding of the world, but the way in which they interact with their peers and their clients,” says Leigh Gauthier, director of Rotman's Career Centre.
“That means students need the interpersonal skills, and they need to be able to grow in an emotionally intelligent way,” both in their MBA program and after.
However, in other roles, the soft skills might be less important.
“This is not a charm school,” says Jerry Warner of the Simon School's finance curriculum. Warner notes that many students go into roles that are “quite analytical,” which require a strong quantitative background.
“The majority of the students who concentrate in finance and get finance jobs, do corporate finance,” says Warner. “And if you're doing corporate finance, you really need to know how to take apart financial statements, and you need to know something about organizational behavior.”
Beyond Wall Street
One of the main benefits of an MBA program in finance is that there are a large variety of functional roles and industries where finance skills are relevant. Of course, there are the well-known, vaguely high-caliber finance jobs – the hedge fund managers and the investment bankers – but there are also leveraged buyout analysts and private equity fund managers.
And for many MBA graduates, finance is more than just Wall Street.
“There are lots of opportunities,” says Rotman's Gauthier, “and once students get here and realize they're interested in finance, we try to show them that there's more than just the capital markets, so they're not just focused on the sexy jobs that they might hear about, but they actually learn about other opportunities that they might be suited for.”
Simon's Jerry Warner notes that in the past few years, there have been an increasing number of students who combine a concentration in finance with one in entrepreneurship. This might represent a shift towards finance-minded students who might be interested in learning about raising funding and managing money issues for small businesses and startups.
“I think you'll find that, in the industry,” Warner says, “entrepreneurial finance and small business finance have become more popular.”
For a complete list of programs offering an MBA concentration in finance, please see FIND MBA's Finance Specialization page.
Photo: Antonio Morales García / Creative Commons