Do I need a Masters before applying to a PhD program?

Question

Hi,
I am interested in applying to a PhD program in Finance; I want to eventually become a university professor. I was a Liberal Arts major in undergrad, and I'm currently working as an investment analyst. Would I need a MS in Finance or an MBA before applying to a PhD program? Or could I apply directly to a PhD program?

Thanks in advance for your help

cabro57 · Answer

It depends on the other parts of your application. The "ideal" applicant has a very good undergrad and graduate GPA in relevant fields, high GMAT score, looks motivated and seems to understand what research is about (through the SOP), has published a paper or two in academic journals, and has good letters of recommendation from well-known professors in the field. I'm not sure about work experience; I guess it can play some role but it's really not that much.

Now, no PhD student I know had all that before applying, so don't worry. However, without knowing what the rest of your "package" looks like, I'd say a liberal arts major would raise a lot of questions about whether your math skills are sufficient for finance (which probably has the hardest math from all b-school fields). Getting a MS/MA in something related (Economics, Statistics, Finance) would be the best way to both 1) make sure you've got those math skills, and 2) signal to prospective faculty members (who'll evaluate your application) that you have those skills and that you can succeed at "quant heavy" graduate studies. An MBA would be better than your current undergrad degree, but wouldn't be as good as an MA in Economics or some Master's in quantitative/computational finance. Of course, should you ever change your mind about pursuing an academic career, an MBA might give you better outside options than an MA in Econ.

In all, finance is probably the most competitive field in b-schools. Thus I'd say if you want to have a good chance at a top school you probably need to signal that you are able to do math-intensive graduate work.

robbie1981 · Answer

Especially if you are international and you aim to a very top school (e.g. MIT, HBS, Wharton), a master degree in the same school (or in another top school as well) might be the key. In fact, faculty members will see you at work and, maybe, support your app too. To have an idea, look at the profiles of Italian Assistant and Associate professors (I say Italian beacause I am Italian and I've look at them early). LORs from well known professors are milestones if you aim at ultra elite schools.

tonic2 · Answer

Thanks for the prompt and detailed responses, guys! In response to your questions: I graduated with a 3.8+ GPA, summa cum laude from the flagship public university in my state (but not Michigan or Berkeley caliber). I'm a U.S. citizen. My current job is in finance and is research based, but it is not academic research. I am confident that I can get a 700+ on the GMAT, and I think I have a reasonable chance of getting 750+. My ultimate goal is not to attend a particular school, but rather to subsequently land a tenure track position in an AACSB certified school. If it's not a premier university, I'd be fine with that. I'd be perfectly happy with a tenure-track position at, for example, a state university that is not the state's flagship campus. I just want to get paid to do research and a little teaching! :-D

I have a few more questions: 1) From what I can tell by looking through the websites of various universities of various calibers, and seeing where the assistant professors of finance received their PhDs, it seems that a super elite degree is not necessary to attain a tenure track position at an AACSB school. Am I correct in thinking that the academic job market is pretty good for finance PhDs, even if they don't have a degree from an elite school? 2) Tuition is the main reason I'd prefer to enroll directly in a PhD program. Would a high enough math GMAT score be sufficient to demonstrate my mathematical ability? 3) Am I being realistic when I'm thinking of sending out applications to PhD programs this fall/winter? Thanks, tonic2

tkkoh · Answer

1. Yes, especially since you are willing to do your research in a simply respectable university, I think a Finance PhD in any of the top 50 schools will be sufficient.

You may have read it somewhere that an important factor in your placement is the reputation of your advisor than that of your PhD-granting school. I believe there are good advisors in non-elite schools.

2. I don't think GMAT's quant would be regarded as an indicator of your ability to tackle the maths in a finance phd program. Have you taken any quant modules during your undergrad? Like real analysis, advanced calculus, etc?

3. I do think that your profile is competitive, especially if you can attain high GMAT. However, as mentioned earlier, finance phd is highly competitive. Even if you have a strong profile, it may not be good enough...

Perhaps you can consider doing a Msc in Finance in the schools that you like to pursue your PhD. You can start working with the faculty, and they can also better assess you. Get some of them to be your recommenders. The chances of getting into the PhD program would be higher than if you just apply directly.

air1980 · Answer

tonic2;

It seems that you and I have a similar outlook, i.e. would be happy working at a mid-ranked school just so long as you get to do research and a little teaching (all though I am not that big on the teaching part).

I also think that working with a good supervisor helps to mitigate the lack of a brand name on your CV.

Last year I was also in a similar situation on weather or not to do a MSc. I elected to go with a MSc in Applied Mathematics (research based), but all of my research has been in the area of quantitative finance. This has exposed me to research, which I love and helped to confirm my desire for doctoral work. And I was fully funded in the process.

I will be starting a PhD in Finance with a rather famous professor in the financial engineering field (not Hull famous, but close) in a not so famous university. But the job market looks pretty good.

Good luck,

Do I need a Masters before applying to a PhD program?

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