Harvard AM in Statistics vs Investment bank

[chachaw]

Got offer from Harvard: Master of Statistics, which I never expected to obtain. As I am not that keen on research and just want to pursue a terminal master degree,  I would like to know the reputation of this program from a more professional perspective rather than an academic perspective.

 

Now i also have a job offer from an investment bank's front office. It's very hard for me to make the ultimate decision, whether to work or to study.      

 

Can anyone share your opinion about Harvard in AM Statistics or any recommendation for my decision? Thx a lot

[aridneptune]

When you say an investment bank's front office - what role? IBanker? Trader? Salesperson? Research?

[StatPhD2014]

So why do you want a master's degree what kind of career do you want out of it

[chachaw]

@aridneptune: Research

 

@StatPhD2014: Career in quantitative finance which requires statistical skills, that's why I have applied for master in statistics.

[StatPhD2014]

Aren't most jobs in quantitative finance mostly programming and financial mathematics as opposed to statistics

[chachaw]

@StatPhD2014: I also applied for master in quantitative finance in another Ivy League but got rejected.  So I know that the two options left for me (ibank or master in stat) are quite different in nature. Just wanna know how is this AM program to help me make the decision.

[Stat Assistant Professor]

It seems like investment banks either want people with only Bachelor's or PhDs (in math, computer science, physics, stats, etc.). Quantitative finance prefers PhDs, so if you want to do anything involving high-level math/programming (e.g. writing PDE solvers in C/C++, writing algorithms for any sort of algorithmic trading, or using a lot of stats), it's better to have a PhD. Someone with only a Bachelor's is likely only going to have to do simple arithmetic and maybe some data and regression analysis, but no real advanced math.

 

I'm not sure a Master's helps that much for quantitative finance. But at the same time, you won't be able to do as much interesting math/stats stuff with only a Bachelor's either. On the other hand, a Master's in Statistics would enable you to get many other jobs outside of finance. So if you are open to other jobs, a Masters can be very beneficial.

[aridneptune]

Chachaw: I work in the financial industry. Outside of a very, very limited subset of roles (mainly structured credit and tech) a master's degree is completely unimportant. In fact, a master's degree is basically valueless to banks. Even an MBA is basically valueless except to get your foot in the door (which you already have). Only experience and results matter. If you prove yourself a diligent and intelligent research analyst who can write halfway decently, you'll get promoted. Or actually, you'll get poached by some hedge fund or private-equity shop and make three times what you were making at a bulge-bracket investment bank.

 

Now if you prefer to write research reports no one reads, then of course you can stay. But the degree will not matter at all.

 

So if it's a career in finance you're after, I'd say take the job - at least for a few years.

[StatPhD2014]

Chachaw: I work in the financial industry. Outside of a very, very limited subset of roles (mainly structured credit and tech) a master's degree is completely unimportant. In fact, a master's degree is basically valueless to banks. Even an MBA is basically valueless except to get your foot in the door (which you already have). Only experience and results matter. If you prove yourself a diligent and intelligent research analyst who can write halfway decently, you'll get promoted. Or actually, you'll get poached by some hedge fund or private-equity shop and make three times what you were making at a bulge-bracket investment bank.

 

Now if you prefer to write research reports no one reads, then of course you can stay. But the degree will not matter at all.

 

So if it's a career in finance you're after, I'd say take the job - at least for a few years.

I am actually interested in this, even though personally i am not aiming for a job in finance. But where do all those people who graduate with a masters in financial engineering or financial math go then, what jobs do they get and can these jobs be done by undergrads as well?

 

Thanks

[aridneptune]

I am actually interested in this, even though personally i am not aiming for a job in finance. But where do all those people who graduate with a masters in financial engineering or financial math go then, what jobs do they get and can these jobs be done by undergrads as well?

 

Thanks

 

Well, I'm not saying that having an advanced degree hurts. My experience has been that connections predominate everything else in terms of getting hired. And if a group's managing director went to NYU Stern and you've got an NYU MFE Master's you'll be looked kindly upon.

 

There are groups and functions within the banks that want MFEs, math PhDs, physics PhDs and so forth. These groups are mainly [Note: I use 'guys' to mean 'guys or girls'] (1) programmers (who write the risk models, electronic trading algorithms, etc.); (2) structured products guys (who put together portfolios of diverse securities tailor-made to a client's risk/return/exposure needs); (3) highly quantitative research guys (who develop proprietary risk-analysis or screening methodologies...though frankly these are a dime a dozen); (4) quantitative risk-management guys (who slice-and-dice the firm's risk exposure, analyze it, stress it, and present the results to management).

 

And even groups in these roles regularly take in candidates without the requisite education and train them up themselves.

 

That said, the vast majority of roles do not require an advanced degree. A typical research analyst uses a pretty basic balance-sheet Excel model, screens for leveraged buy-out candidates with simple rules-of-thumb, and so forth. A typical strategy research analyst uses straightforward regression at most. Real front-office 'revenue generators' (traders, salespeople, investment bankers, etc.) do not need any special training. The banks care primarily about experience...and I can say from personal experience that that's the most important predictor of success in the financial industry. Much of the knowledge required and used here is highly specialized - and the degree of pressure is high. I don't think you'll be able to prepare for it without having to go through the crucible of experience.

 

However, a master's or PhD certainly doesn't hurt. One of the most successful junior salesmen on my desk has an Econometrics MS: a degree he emphasizes is totally worthless. Incidentally, his comments about his job may be relevant: 'How much do I like what I do at work? 3 out of 10. How well-compensated do I think I am for the work I do? 9 out of 10.'

Edited March 4, 2014 by aridneptune

[StatPhD2014]

Well, I'm not saying that having an advanced degree hurts. My experience has been that connections predominate everything else in terms of getting hired. And if a group's managing director went to NYU Stern and you've got an NYU MFE Master's you'll be looked kindly upon.

 

There are groups and functions within the banks that want MFEs, math PhDs, physics PhDs and so forth. These groups are mainly [Note: I use 'guys' to mean 'guys or girls'] (1) programmers (who write the risk models, electronic trading algorithms, etc.); (2) structured products guys (who put together portfolios of diverse securities tailor-made to a client's risk/return/exposure needs); (3) highly quantitative research guys (who develop proprietary risk-analysis or screening methodologies...though frankly these are a dime a dozen); (4) quantitative risk-management guys (who slice-and-dice the firm's risk exposure, analyze it, stress it, and present the results to management).

 

And even groups in these roles regularly take in candidates without the requisite education and train them up themselves.

 

That said, the vast majority of roles do not require an advanced degree. A typical research analyst uses a pretty basic balance-sheet Excel model, screens for leveraged buy-out candidates with simple rules-of-thumb, and so forth. A typical strategy research analyst uses straightforward regression at most. Real front-office 'revenue generators' (traders, salespeople, investment bankers, etc.) do not need any special training. The banks care primarily about experience...and I can say from personal experience that that's the most important predictor of success in the financial industry. Much of the knowledge required and used here is highly specialized - and the degree of pressure is high. I don't think you'll be able to prepare for it without having to go through the crucible of experience.

 

However, a master's or PhD certainly doesn't hurt. One of the most successful junior salesmen on my desk has an Econometrics MS: a degree he emphasizes is totally worthless. Incidentally, his comments about his job may be relevant: 'How much do I like what I do at work? 3 out of 10. How well-compensated do I think I am for the work I do? 9 out of 10.'

Thanks very much on this detailed response. Is it alright if i PM you with further questions just trying to learn a little more

[aridneptune]

Thanks very much on this detailed response. Is it alright if i PM you with further questions just trying to learn a little more

Sure, no problem. That goes for everyone reading this thread in future as well.

[runningincircles]

My 2 cents, take the job. Unless you want to get into academia, which from what you've said you don't, then the MS will be a waste of your time. The experience you get on the job will be worth 100% more than the grad degree ever will. The only real reason for someone to do a terminal MS is to get your foot in the door, which you've already got with the job offer. If you want to go back and get the degree later, the experience you get on the job will also help with getting in to those programs at that point.

Good luck!