If market conditions throw a roadblock in your career path, should you go back to school?
The events of the past two years dramatically narrowed opportunities for career growth in the financial sector. Market downturns tend to drive many early- and mid-career professionals to consider taking an educational detour. So this seems like a good time to discuss factors that should figure in a decision whether to step away from banking and enter a full-time MBA, Master's or maybe Ph.D. program.
Here are some things to think about when weighing the "detour" option:
Are You Creative About Leveraging Your Present Assets?
Don't overlook the package of skills, contacts, experiences and credentials you already possess.
Many experienced job-seekers seem convinced that adding one or another degree or credential will be an automatic ticket to get through whatever door they want. Although labels certainly matter, obsessing over them can throw you off course. Candidates who fasten on some new credential to kick-start their career incur a hidden opportunity cost: They often don't think very hard about how to get the most value from career assets they already have.
For instance, one eFC user posted a question about breaking into a sales and trading role in money markets or foreign exchange. He had an MS-Finance degree from a top business school in Italy, an investment banking internship, a year as an auditor at a Big Four firm, and a year in his current job at a financial software vendor. "Would a top MBA help?" he wondered.
First of all, he was eyeing the wrong tool for his particular goal: Although a top-school MBA would be a tremendous asset, it's less relevant for trading than just about any other role in a financial institution. In fact, an MS in Finance - which he already had - is usually viewed as better for traders than an MBA. Beyond that, he seemed to undervalue his additional assets: low age (25), top grades, and good names on his resume (investment bank plus Big Four audit firm). Even his current role at a financial software house might confer a ready-made opportunity to connect with a trading desk, if any of his customers worked at trading firms. Classmates from his investment banking internship a few years ago might provide useful referrals too.
The Whole Is Worth More Than the Sum of Its Parts
The word, "synergy," was so thoroughly overused by corporate PR and IR types that eventually it fell out of use altogether. But "synergy" denotes a real concept that's useful for career planning. Instead of viewing any designation or degree in isolation, focus on what it would mean in conjunction with your present skill-set and track record. Like assets in a portfolio, items on a resume are best analyzed not as isolated elements, but as a package. For an aspiring dealmaker, MBA plus JD is a combination that offers synergy (deals require contracts and negotiations, a lawyer's forte). For an aspiring quant, an engineering degree plus trading experience offers synergy.
On the other hand, for a holder of BS and MBA degrees from a low-status university seeking to break into M&A or private equity, a CFA charter would add almost no value. Yet that's what
one eFC user who posted on our Answers section was considering. Bad idea. Instead, we advised that he apply to a complementary area like corporate finance or equity research - both easier to break into than M&A - and then shoot for a lateral transfer after convincing the boss that he (the candidate) was "God's first cousin."
Even then, landing in M&A is still a long shot for anyone without the required pedigree, which a CFA charter won't provide. But we thought his odds would be relatively better applying from within an institution than from outside. A previous eFC article explained how one bulge-bracket employee transferred internally from financial reporting to equity research, despite lacking marquee educational institutions.
An earlier version of this column was first published Feb. 8, 2008