Is there merit in an MSc?

In the right circumstances, an MSc can be a desirable asset. In the wrong circumstances, however, an MSc will make little difference to your would-be banking career.

Most continental European students have spent four years or more in higher education. Banks' graduate recruiters confide UK students can seem a little backward alongside these French, German and Italian whiz kids. An MSc can help close the gap. However, without the right kind of MSc taken for the right reasons, you could find yourself several thousand pounds worse off with little to show.

Could be useful if...

... you have a strong history of academic achievement in a non-financial subject. Brian Hood, head of graduate recruitment at Citigroup says: "It's a good idea to study an MSc in a financial area if your first degree is in an area like history." Although Citigroup (and most other banks) accept students from all degree disciplines, Hood says a finance-related MSc can help students with no prior knowledge of finance get to grips with some of the technical aspects of the industry.

... you intend to pursue it for academic reasons. . However, it would well backfire if you plan to use it purely as a leg up into a banking career, as the head of graduate marketing at one US bank confirms: "An MSc is about the pursuit of further knowledge," she says. "It's not about trying to improve your chances of getting a job."

... you got a good first degree, but left it too late to apply for a job in investment banking. In these circumstances, SallyAnn Birchall, head of graduate recruitment at Deutsche Bank, says an MSc can give you another chance to apply, but it will help if you also get some investment banking work experience in the interim.

...you plan to work in a sales or trading role Here, the technical expertise you gain can be put to good use, say recruiters. "Some of sales and trading desk heads only accept students with an MSc," says Alison Bridle, head of graduate recruitment at BNP Paribas. By comparison, recruiters say an MSc is largely irrelevant if you intend to work in corporate finance.

But don't bother if...

... you scored low grades in your A levels, or in your first degree. "An MSc will not make an average student into a great one," says Fiona Gaffney, head of European campus recruitment for fixed income and equities at Lehman Brothers. "Whether they have an MSc or not, we do not accept people with a 2.2 in their first degree," she adds. Most other banks adhere to a similar policy: "If you have a 2.2 in your first degree, an MSc won't help you join our graduate training programme: we require a 2.1 or above," says Birchall at Deutsche Bank.

... you expect your MSc to give you a leg-up the career ladder once you join a bank. Whether or not you have an MSc, you'll still enter an investment bank on exactly the same rung as first-time graduates without. Most banks make no special allowances for the qualification. "MSc applicants don't usually have a huge amount of experience," says Bridle at BNP Paribas. There are exceptions, however. Fiona Gaffney says Lehman Brothers recognises the additional expertise offered by some MSc students. The bank has developed a new category of 'senior analyst' for MScs applying to its fixed income and equities divisions with nine continuous months of relevant work experience. Pay for these senior analysts at Lehman is higher, and MScs are typically promoted to the next grade of 'associate' within one year, compared to two to three years for standard graduate entrants.

... you think becoming a 'specialist' will increase your chances. A growing number of MScs specialise in particular areas of banking. For example, the ICMA Centre at the University of Reading offers MScs in capital markets, regulation and compliance and in risk management. However, unless you know exactly which sector you want to work in and are prepared to apply on an ad-hoc basis, recruiters warn against studying very specialist MSc courses. "We're looking for generalists," says Gaffney at Lehman. "Some MScs can be too specific for our generalist analyst training programme."