A math whiz can make serious money right out of grad school, though it takes more than skill with numbers alone to make a real career on Wall Street. To reach your full potential, you'll need strong communications skills and a sense of teamwork.
For a Ph.D. with no experience in finance, starting salaries in New York are around $150,000, according to Barry Franklin at Integrated Management Resources, a recruiting firm specializing in derivative product professionals. The old image of geeks with Coke bottle glasses sitting around an investment bank basement cranking out code doesn't hold, he says: "You definitely need communications skills because a lot of these jobs are tied to the trading desk."
Franklin says math skills are in demand across the board - on the buy side, the sell side and from hedge funds. Jobs are open in New York, Chicago, Tokyo and London, with salaries in the UK even higher than they are in New York, starting at anywhere from about $224,000 to $260,000.
Predictably, graduates of top tier schools like MIT, Harvard and Stanford are most in demand, but grads of Carnegie Mellon and the University of Michigan also do well.
Roger Lang, director of corporate relations at the Cornell Operations Research center on Wall Street, which applies high performance computing to finance and other industries, agrees with Franklin on the need for communication skills. Last year, Cornell initiated an internship program and has placed many of its students with leading Wall Street firms.
"Banks wanted students who are articulate and able to work well in teams," Lang says. "Math is now part of how you develop new products, how you manage the risk and balance portfolios. These are not activities performed in isolation."
Lang sees market growth as new and more sophisticated quantification is incorporated into finance applications to apply new research emerging from academia.
"Firms want their vendors to embed the latest thinking in software application functionality around areas such as derivatives pricing," he says. "You'd get killed if Black-Scholes was your only want to deal with options pricing now.
A second area of growth Lang sees is computational finance, which combines IT computation skills with quantitative finance. The specialty goes beyond simply knowing how to program. It requires expertise in getting the best performance for financial applications from computers and networks and understanding how to locate and overcome latency in complex processing.
"There is a very strong demand," in the area, Lang says. "Not many people know how to do both IT and math, and they can make really big bucks in hedge funds or high net worth investment portfolios."