MBA vs. MFE: 6 Tips to Help You Decide
If you’re interested in pursuing a career in finance, you may be overwhelmed by the graduate program options.
Two of the most common paths are an MBA (Master’s in Business Administration) with a concentration/specialization in Finance and a MFE (Master’s in Financial Engineering), which is also less commonly designated as a Masters in Financial Mathematics. While there is some overlap between the coursework and career options available upon graduation, there are important differences.
Here are some things to consider as you weigh your options.
1. Finance—ready to put all your eggs to one basket?
How committed you are to a career in the financial industry? Is this both your top choice and only choice? Can you see yourself being happy working in another industry? Or are you willing to dedicate yourself to one industry before starting graduate school?
An MBA is a very broad degree and give you a safety net if a career in finance doesn’t immediately present itself. With an MBA, you can pursue a traditional post-MBA function such as consulting. On the flip side, the focused nature of an MFE will make you a compelling candidate for niche quantitative areas of finance.
2. Are for-loops and if-else statements your second language?
Honestly assess your programming ability. If you haven’t coded extensively, you will be at a disadvantage relative to your MFE classmates who have this experience. Several quantitatively inclined MBA programs such as Chicago Booth feature programming-oriented finance coursework, but these courses are typically optional and not as challenging as their MFE counterparts.
3. Build it or sell it?
Consider what you would like your career will look like. Do you see yourself in a “hands-on” role within a finance organization? Alternatively, would you prefer to be more strategic; dealing with clients and marketing your product? Do you want to be more involved with building the product or selling it? An MFE will prepare you well for the former. An MBA, with its broader array of course offerings in marketing, competitive strategy, and organizational behavior, will prepare you for the latter. The more comprehensive set of leadership coursework offered at an MBA program will prepare you for a strategic management role.
4. Pay up!
An MFE program is typically much less expensive and shorter in duration than an MBA. Are you willing to take on greater student loan debt and spend an additional year in an MBA program? Make an honest assessment of your savings, family resources, and willingness to incur student loan debt. If you who know you want to work in the financial industry, one year of training is sufficient.
5. So … where are you from?
If you are not a US citizen or permanent resident, you have additional challenges when applying for graduate school including financing your education and ensuring you will have a viable immigration status in the US after graduation. Many Financial Engineering and Financial Mathematics degrees will qualify graduates for a STEM extension. Most MBA programs don’t offer this benefit.
6. MBA—now or later?
Most MBA students have 4-5 years of full-time work experience, and it’s typically difficult to be admitted with significantly less. MFE students are often admitted directly from college. If you get an MFE immediately after college you can then work in a finance role for several years before returning for an MBA to enhance your leadership and strategic skills. Working for a few years will enable you to take on leadership roles in the workplace or outside of work, making you a more compelling MBA applicant.
As you make this important decision, talk to people who have gone through the process. Challenge your initial biases and perceptions about both programs. While you may be able to achieve similar goals with either degree, you will save yourself a lot of time if you choose the more appropriate option.