The short answer is no, you don’t NEED an MBA to have a successful investment banking career. Top-notch financial services new york recruiters, like Wall Street Services, pride themselves on their proven ability to connect candidates with their dream jobs in Finance. But there are lots of pros and cons to consider—here’s our proverbial grain of salt.
Headhunters say that while an MBA might help land a first job after graduation, the career benefits from that moment on are almost nonexistent. In other words, it gets your foot in the door, but not much else. To recruiters, MBAs toters (especially those from top-10 B-schools), are a safe bet in a sea of maybes.
Not only have MBAs endured a rigorous curriculum, they also have an alumni precedent they can point to to back up any claims they make about their professional abilities. That added reassurance has historically made hiring managers more comfortable, even though it isn’t clear that MBAs are necessarily better at their job than non-MBAs.
Studies from Pace University show only marginally to moderately improved company performance in businesses that are headed by CEOs who have an MBA as compared to those who don’t. That is to say, years of experience in the field will probably produce an executive as apt as one who’d spent those same years in school.
PRO: A Fraternity of Financial Pros
There is still, however, a good case for going to B-school—mainly, networking. “If you go to Harvard, you’re more likely to meet successful people who will enable you to do well,” says Aron A. Gottesman, an associate finance professor at Pace. So while your school’s brand might not always accurately indicate your abilities, it does show to whom you’re potentially connected—word on the street is B-school alums tend to stick together.
But B-school is expensive. This year, applications for the US World Report’s top 10 start at $250, with calculated first year expenses climbing upwards of $92,000 (at schools like NYU Stern). For such a huge cost commitment, you need to be absolutely positive there will be an adequate remunerative return on your time and financial investment—and for that, it matters what area of financial services you’d like to get into.
PRO: Salary Uptick
According to the nifty salary research tools provided on payscale.com, Financial Services employees who have an MBA can earn as much as 27.4% more than those who only have a Bachelors degree—a major sell if you’re on the fence about getting an MBA.
But of course you can’t simply look at the financial industry. It matters what type of profession you’d like to pursue within the financial industry. For instance, CFOs who have an MBA earn only about 9.7% more than those with only a Bachelors degree. Yet, Portfolio Managers who have an MBA can earn a staggering 37% more than their non-MBA colleagues. Before you consider going for an MBA, figure out what you’d really like to be professionally doing, and compare the cost benefits of pursuing higher ed and bowing out of your job for 2 years.
CON: Bowing out of a job for 2 years
Oh yea, you’ll have to leave your job for two years (unless you complete a part-time or executive MBA program, which in itself means less free time for you, and less sympathy financial assistance providers). Which means going back to living on a student’s budget. Which means all nighters and study fests. Which means, if you have a family to support, you’ll need to have in place some other temporary means to make ends meet.
In short, pursuing an MBA is not a given en route to a successful investment banking career. More than a few letters at the end of your name, it is a huge and calculated investment that, for a select few, promises a substantial reward. Don’t just jump into it.