What Is the Difference Between an MBA in Finance and a Master’s in Finance?
Key Takeaways:
- Deciding between an MBA in Finance and a Master’s in Finance depends on your career goals, current professional experience, and personal preferences.
- Consider an MBA in finance if seek leadership roles, want a broad business education, have professional experience, value networking, or are considering a career change.
- Consider a master’s in finance if you seek specialized finance knowledge, are early in your career, want a shorter program, are interested in technical roles, or are certain about a career in finance.
- Some factors to consider when making your decision are your career goals, experience level, program duration, educational focus, and networking opportunities.
The difference between an MBA in Finance and a Master’s in Finance is that the first offers a broader view of business management, but the second degree focuses on one functional area.
A Master’s in Finance program may offer a specialization, so it’s a good choice for students who want to primarily focus on financial processes and systems. The MBA degree will provide practical instruction across multiple business disciplines and teach students about management, entrepreneurship and executive leadership.
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MBA vs Master’s in Finance
Master of Finance degrees usually take one year to finish and applicants usually have to complete an internship. MBA programs will take two years, but they generally require candidates to have three to four years of work experience in a related field. Most Master of Finance programs do not have work experience requirements, so the participants will usually be younger. MBA programs are geared towards working adults who want to transition into leadership positions. Master of Finance programs appeal to students who want to quickly jump start their careers after their undergraduate studies.
Related:
MBA programs come with steeper tuition costs compared with Master of Finance degree programs. However, they are designed for working professionals, so they will most likely offer more flexible attendance options. This includes evening, online and weekend classes. Most MBA programs use a combination of online discussions, on-campus activities and weekend seminars. Master of Finance programs place very little emphasis on leadership skills and leadership potential, but MBA programs are specifically designed for future business leaders. Quantitative skills are very important in Masters of Finance programs because graduates must develop analytical and technical skills in finance.
Let’s take a closer look at the differences between an MBA and a Master’s in Finance degrees. You should be able to make the best choice for yourself after considering these differences.
Prerequisites
MBA in Finance programs may or may not require an undergraduate degree in business administration depending on their curriculum. In MBA programs where a business degree isn’t required, students can be required to complete foundation courses that introduce them to the fundamentals of business administration, accounting and finance. These programs usually feature a more diverse student body from a wide range of disciplines, such as business, healthcare and even engineering.
Master’s in Finance programs, in contrast, typically require applicants to possess proficient knowledge and skills in finance, insurance and investment management, or economics, among other related fields. Students must also possess graduate-level quantitative skills and, thus, may have to brush up on their quantitative skills, such as statistics, quantitative analysis and advanced math.
Many MBA in Finance and Master’s in Finance degree programs require satisfactory scores on standardized tests as a demonstration of the applicants’ potential for success in graduate school. But if you haven’t taken the GMAT or you aren’t confident about your latest scores, you should consider MBA online with no GMAT programs.
These programs can be just as competitive in their admissions process and rigorous in their coursework as online programs with GMAT requirements. Applicants will likely be required to demonstrate their capabilities in other ways, such as higher GPAs and more extensive professional experience.
Scope of Coverage
The MBA in Finance degree has a more generalist approach since it covers a wide range of aspects in business administration. Students learn advanced knowledge and skills in finance, operations management, marketing management, and strategic management, among other topics. The broad understanding of these business functions make the MBA degree suitable for individuals seeking entrepreneurship opportunities or leadership roles in organizations.
But as part of their specialization, students in MBA in Finance programs complete finance-related specialization courses that broaden their understanding of the finance world. These courses can include Financial Management, Investment Analysis and Portfolio Management, Financial Markets and Institutions, Derivatives and Risk Management, and International Finance.
If you’re already in a leadership role in an organization, find the best online executive MBA programs. You can continue with your employment while pursuing your MBA degree, as well as enjoying the opportunity for productive classroom-to-workplace applications.
As previously mentioned, the Master’s in Finance degree focuses on finance as its primary functional area. Students engage in in-depth discussions about finance-related topics including risk management, financial modeling, and corporate finance. Such is the intensive focus on finance that students gain a comprehensive understanding of its principles, practices and applications in the contemporary world. Graduates are then well-prepared for the challenges of asset management, investment banking, and corporate finance, among other related fields.
Entrepreneurship Emphasis
The typical MBA in Finance programs require their students to complete an entrepreneurship course, usually with an emphasis on innovation and technology management and new venture creation. This isn’t surprising considering that an MBA degree is an effective tool among entrepreneurs with the best examples being Elon Musk (University of Pennsylvania), Michael Bloomberg (Harvard University), and Phil Knight (Stanford University).
The Master’s in Finance degree, however, isn’t a common one among business leaders and entrepreneurs because of its specialized focus on finance. But it can still be a useful degree for individuals interested in putting up their own finance-related companies.
Quantitative vs. Qualitative Focus
MBA in Finance programs are known for their balanced approach toward quantitative and qualitative skills. Of course, students learn business-related quantitative skills through courses in statistics and quantitative decision-making, managerial economics, and data analytics and business analytics. But there’s also an equal emphasis on qualitative skills including leadership, teamwork and strategy as well as communication, critical thinking and problem-solving skills. If you’re taking 12 month MBA programs online, the courses are compressed and demand a lot from you academically. The upside is you finish earlier and spend less than you would in traditional MBAs.
Master’s in Finance programs, on the other hand, places a stronger emphasis on the students’ quantitative competencies relevant to the finance industry. Math skills are a must in courses like Financial Econometrics, Quantitative Methods in Finance, Derivatives and Financial Engineering, Advanced Financial Modeling, and Computational Finance. But students are well-advised to develop their qualitative skills, too, since these are also crucial for career and life success!
International vs. Industry-specific Focus
MBA in Finance programs typically emphasize a global approach toward business administration and management, a smart approach considering the interconnectedness of the business community. Students then prepare for leadership roles in multicultural settings in diverse industries, from product manufacturing to services delivery and from government agencies and nonprofits to for-profit corporations. Graduates can choose between a management-specific role or a finance-centric position or a combination of both, thanks to their business and finance education.
Master’s in Finance programs have a more industry-specific focus. Graduates then tend to pursue more specialized roles in a finance capacity. Of course, the finance industry in itself has an international aspect but professionals with a Master’s in Finance degree are more likely to focus on specific financial instruments and markets.
Cost and Return on Investment
As previously mentioned, an MBA in Finance degree usually involves higher cost of attendance than a Master’s in Finance degree. The cost of attendance for top ranked online MBA programs, such as Stanford, Columbia, and NYU, can be more than $200,000 for their two-year duration.
Fortunately, there are more affordable MBA and Master’s in Finance programs that offer quality business education, too. You should look into financial aid options, such as federal and state aid, institutional scholarships, military education benefits, and employer tuition reimbursement.
As for return on investment, we can say that both provide excellent value for your money! The trick is in leveraging your graduate degree to gain a competitive advantage when presented with career advancement opportunities. Keep in mind that your graduate degree, whether it’s an MBA in Finance or a Master’s in Finance, is but a tool – you can either use it well or use it not at all.
Degree Specializations
Master of Finance degree often exclusive degree track specializations. For example, a mathematical finance track will focus on the areas of math, statistics, economics and numerical analysis. Other specializations include statistical computation or managerial econometrics. A financial engineering track will cover financial theories, engineering methods, mathematical tools and programming practices. Comprehensive finance is a general track that involves everything from calculus to behavioral finance to derivatives pricing to corporate finance. If you’re aiming for a finance career, a master’s in finance is definitely worth it.
Additionally, these multidisciplinary finance specializations may be sponsored by different departments, like economics, business, engineering and mathematics. Almost all degrees will emphasize financial and accounting management tools and techniques. MBA programs may offer tracks related to statistics, economics, accounting and global finance. They will most likely focus on all aspects of money investment, collection, disbursement, borrowing and fund-raising management. A Master of Finance degree will teach students how to create and analyze financial reports, but an MBA program will teach students how to transform the analysis into actionable insights and recommendations.
Both MBA and Master of Finance students are prepared for careers in trading, auditing, economics, controlling, capital markets and investment management. Graduates may find work in commercial banks and handle lending and mortgages, or they may oversee large financial institutions and monitor individual branch office functions. In the end, the difference between an MBA in Finance and a Master’s in Finance is the individual’s career goals. Learn more about the advantages of both of these degree programs here.