GUEST COMMENT: Business school's out?

The MBA has traditionally been a staple part of any financial services CV. But with the cost of attending business school getting higher, and the squeeze on City jobs beginning to pinch, does it still give young professionals the key to transform their career in finance?

The decision to go back to school is not one to be taken lightly. An MBA brings no guarantees, and students who study just to have it on their CV may ultimately regret it. Given the costs involved, candidates need to be certain that the qualification is really going to add value. The US schools in particular are phenomenally expensive, and while some firms do offer sponsorships to business school, the majority of candidates must still fund themselves.

Hefty outlay with no guarantees

The cost of taking a career break often means students end up with personal loans to the tune of 40k-50k to fund two years in the States - a hefty outlay for no guarantees at the end.

The good news is that it is still a qualification that employers like to see.

Approximately 80% of top finance professionals have an MBA, and there is little doubt that it does develop more rounded candidates. It is a great way to develop, for example, a junior investment banker from a modelling junkie into a more commercially savvy individual. In addition, students benefit from an insight into the commercial and operational aspects of business.

The MBA provides a forum to combine financial skills with the operational management skill set needed in more senior roles. Harvard, for example, uses case study methods to provoke discussion as students from different fields of experience mix with each other. This closely replicates the business environment, where consultants, strategy consultants, people from the corporate world, bankers and hedge fund executives all work together and frequently benefit from one another's experiences.

A network to die for

One of the big upsides of business school is that it gives students a phenomenal network. This is an important additional tool on top of the learning experience. The friendships and networks made will often play a useful role in furthering careers after graduation.

A word of warning, though: employers are increasingly selective about which schools they are prepared to hire from. With over 200 institutions offering MBAs in the US alone, choosing the right one has a huge impact on employment opportunities and salary expectations post-MBA.

Which b-schools have the edge?

On the financial services or private equity side, top firms tend only to look at Harvard, Wharton, Columbia and Chicago Graduate School of Business in the US. In Europe, INSEAD and London Business School also have good reputations, but the US schools certainly seem to have the edge. What student who commits to a one or two-year MBA aspires to be in a second or third-rate private equity firm?

School may not be out, but the question of which school is in has never been more important.

Somerled Macdonald is a partner at Redgrave Partners.