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Smarter Approach to a Career in Finance

Market volatility has made investing an even more complicated practice. Managers and advisers are backing away from the time-honored rule of investing -- the "buy and hold" approach -- and engaging in "tactical management" -- that is, playing the market in a more active fashion to safeguard client investments, according to SmartMoney.

Meanwhile, more money is moving into alternative investments, according to Bloomberg, which reported that hedge funds have had 3.4 percent in returns this year through August, compared with a 3 percent decline for the S&P 500 during the same time period. MBA programs are also keeping an eye on developments and adapting their offerings to better prepare business school students. Changes include new courses, more sophisticated programs, lectures from pros, trading competitions, and even professional certification paths.

"With all these events, people need to understand well the financial markets," said Sorin Tuluca, professor of finance at Fairleigh Dickinson University's Silberman College of Business. They "need to be prepared to deal with turbulent situations."

5 ways MBA programs prepare financiers

1. New courses

MBA programs are revamping their curricula to better prepare their MBAs to tackle financial challenges. Fairleigh Dickinson introduced two renewed finance courses this spring -- Managerial finance and Financial Markets: Theory and Practice. Managerial finance is a required MBA core course. It focuses on understanding and managing risk and valuing companies. It also introduces students to derivatives. Financial Markets: Theory and Practice is a required course for MBAs specializing in finance that focuses on interest rate determination, pricing models, derivatives and risk.

"We wanted to emphasize the foundation," Tuluca said, adding that all MBAs, not only finance MBAs, must be familiar with these topics.


2. More sophisticated programs

MBA programs are also venturing into more sophisticated areas of finance. Carnegie Mellon's Tepper School of Business allows MBAs to complete a Financial engineering MBA track or a finance MBA and Master of Science in Computational finance, or MSCF, dual degree. Financial engineers create financial products through innovative design or repackaging of financial instruments. They use mathematical tools to create investment strategies, using products to solve financial problems and/or maximize returns.

"We want people not only to use models intelligently, but also to create new models," said Duane Seppi, professor of finance and head of the master's degree in computational finance at Tepper.

3. Lectures from the pros

Business schools are not only organizing visits with renowned investor Warren Buffett to dazzle their MBAs, but they are also attracting professionals to serve as lecturers. The former chief economist of Lord Abbett, one of the oldest U.S. money management firms, is now a senior lecturer at Fairleigh Dickinson, Tuluca said, adding that business school professors also serve as corporate consultants in their areas of expertise.

"Lots of us have practical experience so we bring our stories to class," he said.

Lectures from experienced professionals are complemented by the experiences of students who work in area companies, including financial firms.

4. Trading competitions

MBA programs also put their students to the test with sophisticated trading competitions. Besides bringing experts to talk about topics such as algorithmic or high-frequency trading, Tepper sponsors the Deutsche MSCF Trading Competition. Directed and underwritten by Deutsche Bank, the competition requires participants to trade equity and fixed income derivatives during specified open market hours. They must meet performance measures specified in trading cases. The top three winners earn cash prizes between $250 and $1,000. They are also honored during a reception at Deutsche Bank in New York.

5. Professional education

MBAs who are serious about careers in investments usually become Chartered Financial Analysts or CFAs. The largest organization of investment professionals, the CFA Institute certifies members with investment experience who pass CFA exams. MBA programs could also seek certification from the organization. To get certified as CFA Program Partners, their curricula should be closely tied to professional practice and well suited to prepare students to sit for CFA exams. While 137 global business schools have sought CFA Institute certification, others have kept track of areas tested by the exams to cover these in MBA programs.

"Much of the homework we give can prepare someone for the CFA," Tuluca said.

Steps toward the future

While finance training cannot guarantee investment success, it should better prepare MBAs to navigate today's rapidly changing markets -- and hopefully come out ahead. Schools may continue to expand their offerings in this field to help students, and future professionals, gain increased insight into the financial world.

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