Although every graduate program or department will have specialized requirements, there is a standard fund of knowledge that prospective students for a Master’s in Finance should have access to. These prerequisites or substitutes for classwork ensure students are prepared to take and pass the challenging financial classes offered in Master’s in Finance programs.
What Prerequisites are Required?
Most Master’s in Finance programs will require students to have taken classes in various financial topics. This includes corporate finance and accounting analysis courses that cover the principles and practices of business finance professionals. These courses focus on capital structure, project evaluation, and corporate governance. Students should be familiar with standard corporate policies toward debt, equity, and dividends. Classes on money or capital markets will be required. These will cover the behavior, organization, and management of financial institutions. They will also introduce students to monetary policies, financial institutions, and the Federal Reserve System. Some Master’s in Finance programs do not have prerequisites or will waive them if the prospective student can demonstrate real-world “time in grade” experience and/or proficiency. For instance, certain graduates of the hard sciences, like chemistry, do not have a business background. Still, they may have the math and computational skills that will serve in certain facets of today’s financial workplace.
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Classwork topics on the Master’s of Finance include:
- investments analysis
- managerial finance
- economics
- the “time value of money”
- Classes on investments will cover:
- operations of security markets
- procedures for analysis of securities
- sources and demands for investment capital
Microeconomics and macroeconomics are two required prerequisites for Master’s in Finance programs. The former will cover things like resource allocation and price determination, while the latter will cover the factors that impact employment, income, price levels, and fiscal policies. Program candidates must also have a quantitative background that includes courses in probability, statistics, linear algebra, multivariate calculus, numerical analysis, and differential equations.
What Prerequisites are Sometimes Required?
Some Master’s in Finance programs may require prerequisites in communication, mathematical tools, computer programming, and statistical and econometric applications, depending on the specialization. Students who want to work in the information technology side of trading and investments may be required to be familiar with C and C++ programming. Students who will focus on market research or computational and management tools will need to have taken classes in Matlab software. Most undergraduate students will have taken classes in physics, economics, engineering, computer science, and applied mathematics.
Students should have taken courses (or a course) in writing, speaking, and presentation skills. These could be classes in English writing, speech, or composition. Business communication classes are becoming required more and more because students must know the theories and practices of effective communication in business environments. It may help the student’s application if they have taken classes on public speaking that involve oral presentations and written assignments. Students should also take a class on technical writing that introduces them to the rhetorical approach to reading and writing argumentative discourse.
Ideal Candidates
The strongest candidates for Master’s in Finance programs have an impressive breadth of strengths. Their personal statements and recommendations will be impressive. What sets apart the strongest candidates is a passion for financial excellence, accountability, and corporate responsibility. It is beneficial to have internship and employment experiences in various financial fields. At the minimum, they will have high GRE or GMAT test scores and exceptional grades.
While many institutions are diminishing or removing standardized testing in the admissions process, for now, they are still a way for you to distinguish yourself among similarly qualified applicants. You likely know yourself well enough as to whether you tend to score high on tests, but you also need to consider which test is most likely to impress schools. The GMAT is reputed to be more challenging in its mathematics than the GRE unless you happen to be a geometer (i.e., good at geometry), which likely favors you for the GRE. Also, the GMAT is specifically geared towards business degrees. If you are exclusively applying to business schools, you will weigh this decision differently from applying to a Master’s of Finance and other less business-related graduate programs. This is the rifle and the buckshot version of the graduate school application.
Thus, unless you feel less confident or for whatever reason, you may avoid these. On the other hand, especially if you are organized enough to work with adequate preparation time, you will likely benefit from this advantage. If you happen to be unusually language-oriented, a focus on the GRE may be to your advantage–its verbal section features notoriously arcane vocabulary, which can be a barrier or an advantage if you are erudite enough to master anomalous terms.
Candidates should also certainly have a basic understanding of the fundamental quantitative tools employed by financial professionals in various sectors. These include computational tools related to:
- risk statistics
- probability
- operational optimization
- economic theory
Quantitative tools and analysis are the keys to strengthening risk management practices. A driving force behind students should be a passion for academic research and the real-world financial industry.
Having completed more prerequisites for a Master’s in Finance program will allow students to spend their time and energy acquiring the advanced skills that will prepare them for a wide range of careers both inside and outside the financial industry.
Some programs accept students from any discipline. As long as they can demonstrate a history of excellence in challenging coursework, a history in business or finance is not required. But undergraduate coursework that would prove helpful to have already under your belt before beginning the MSF includes finance, statistics, and accounting. Though some schools may not require an academic background in business, they prefer that students without such a background have a few years of professional business experience under the old belt. This is not a program for dilettantes. The academic standards are high, as are the personal recommendation requirements. You had better be packing a certain “wow” factor in at least one area, professional experience, recommendations, or academics (including test scores).
Popular specializations for the Master’s degree in finance include these: economics; organizational management and change leadership; future markets; applied business management; capital markets; project management; real estate; and business intelligence. Any of these specializations will add value to your degree, as the depth and breadth of your knowledge increases.
Many employers will work with your chosen higher learning institution and offer either a discount on tuition or a reimbursem*nt plan for your studies. This is one of the compelling reasons to wait on pursuing this degree until a few years after graduation with your bachelor’s so that you can establish yourself professionally and see where your true interests lie. Also, if you are pursuing a CPA certification, graduate study hours count toward that certification.
The 9-12 month process of a full-time on-campus Master of Science in Finance can also prepare you to sit for the Chartered Financial Analyst (CFA) exam in many cases. Online courses may take longer to complete, as they are often pursued in a part-time manner, but you can continue your professional responsibilities.
The Chartered Financial Analyst credential is desirable because it is a mark of distinction among investment professionals, giving you something concrete to point to as one of your accomplishments. The CFA exam consists of a triad of tests, on fundamental investing skills like:
- wealth planning
- asset valuation
- portfolio management
This certification can also be pursued independently from a graduate program by those who wish to move from one field to investment advising.
Other certifications that can be sought by finance professionals include the following:
- Certified Financial Planner
- Certified Public Accountant
- Chartered Investment Counselor
- Certified Management Accountant
- Chartered Life Underwriter
- Chartered Alternative Investment Analyst
Graduate schools also offer certificates in finance that can be a short-term time investment to expand your knowledge base. These can often be added to your current master’s program.
There is some debate about the terminology employed and whether the Master’s of Science in Finance versus the Master’s in Finance versus the MBA with a specialization in Finance are all separate and distinct degrees or whether this terminology varies by school, and it just means what that particular school says it means. The answer is very much the latter in most cases. The MBA is a slightly different animal as it will be a more general business degree with a focus in finance. Sometimes the Master’s of Science in Finance is, well, focused more on science and technology than the Master’s in Finance. Still, it varies so widely that you should study each school’s course offerings to see that you are learning what you feel will be most valuable to you and not just going by the degree name offered by a particular school.
Skills that will help in the average Master’s of Finance program include:
- linear algebra
- multivariate calculus
- differential equations
- probability and statistics
Some degrees will require an acquaintance with the field of economics as a hoop for admission as well. Whether you need to demonstrate these skills for admission or prove that you have finished coursework in these areas is going to be a case-by-case basis that varies from school to school. Just as each program’s coursework and focus are somewhat unique, so are each school’s distinct admissions requirements.
The Master’s of Finance, as has been shown, means different things at different places, so having a clear idea of what you intend to do with the degree is key. There are many fields where a Master’s of Finance will be a boon, and to specialize even further, you can pursue either a specialized Master’s of Finance or a dual degree program where you pursue two Master’s degrees at the same time. Here are some common dual degree programs on offer:
- Master’s of Finance and the MBA
- Master’s of Finance and the law degree
- Master’s of Finance and the MSA which is a hybrid of an MBA and a Master’s of Public Administration
- Master’s of Finance and a master’s degree in mathematics
None of these are as popular as the MSF/MBA. But if you can get an MBA with a specialization in finance, what is the difference?
An MBA with a specialization in Finance is typically a broader degree than the more finely focused MSF. Additionally, with an MBA, you can achieve more than one specialization. So you could specialize in finance and human resources if that was what you wanted. However, you will find that specializations in the MSF program are more constrained, especially considering that the MSF is generally a one-year program, so you won’t have time to branch out as you would with a multi-year MBA or dual degree program.
We are using the terms Master’s of Finance and MSF interchangeably in this piece to reduce repetition. We have illustrated that the degree means different things to different schools, and a standard definition is sadly lacking. You need to know several things to succeed in a Master’s of Finance program, but not all schools call for these to be quantified in the form of prerequisites. Some can be satisfied by standout test scores, real-world experience, and/or undergraduate internship work experience. Not having an undergraduate degree in business generally, or finance, more particularly, need not bar you from your graduate dreams of a Master’s of Finance. Of course, you will be expected to keep up with the eventual cohort of fellow students with that degree. Historically, the degree programs have synergized core finance strategy and theory with the ever-evolving timely demands of computer science, data, and/or engineering. If you can be as well-prepared and flexible, you will profit from your choice of Master of Finance degrees for which you were well-prepared.
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