MBA versus master’s in finance: What’s the difference?

BY Nick RollApril 27, 2021, 3:00 AM
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The path to a career in finance is going to be different for everyone—mostly because the industry itself isn’t composed of one type of career. Rather, a job in finance can be approached from a slew of different angles, from the world’s largest companies to startups, and from financial planning to corporate finance. 

For those people seeking to further their career in finance through graduate school, there are plenty of options. Prospective students who’ve narrowed their choice to an MBA or a master’s in finance might wonder: “Which is better?” The question is especially relevant when students are considering schools that offer MBAs with finance specializations. 

But the real question, admissions and business school experts say, should be: “How do you want to approach finance?” 

That’s the way Rebecca Mallen-Churchill, director of graduate recruitment at Arizona State’s W.P. Carey School of Business, sums up the choice of an MBA versus a master’s in finance. When weighing that decision, she says, it’s important to ask yourself: “From what context are you approaching it?” In both the MBA and the master’s in finance, “the content of the actual curriculum is going to be a little overlapping in the finance classes. It’s just a matter of how you put it into play.”

MBA candidates will approach their finance coursework from a managerial perspective, which usually aligns with their goals to land a management or leadership position after graduation. That’s different than a typical master’s in finance student, Mallen-Churchill says. “You are probably training—at an initial stage, directly after graduation—to be an individual contributor. So you might be working as an analyst, or something of that sort.”

The master’s in finance can be seen as taking a targeted slice out of the MBA playbook, says Cherrie Wilkerson, assistant dean for young professional programs at Vanderbilt University’s Owen Graduate School of Management. That can be especially appealing for young students who know they’re interested in finance and want to accelerate their careers in the field.

“The courses they take are a sliver of the MBA class. So they’ll take MBA-level finance classes,” and often with MBA students as their classmates, Wilkerson says. “They just don’t take the whole gamut of the MBA experience.”

MBA versus master’s in finance: Tuition and cost

The narrow, more focused approach of a master’s in finance comes with certain advantages—and drawbacks. For example, the master’s in finance at W.P. Carey can be completed in nine months; that’s much shorter than a full-time MBA, which comes in at 21 months. On the other hand, the master’s in finance is offered only as a full-time, in-person program, whereas W.P. Carey offers more flexible arrangements with its online MBA for working professionals.

When it comes to cost, that time on campus is also a factor; like in-person MBA students, master’s in finance students will have to forgo a salary when they’re in school. But many master’s in finance students at both Owen and W.P. Carey are coming fresh out of their undergraduate degrees, or with just a few years of work experience, Wilkerson and Mallen-Churchill say, so that opportunity cost might not factor in so much for them. 

As far as actual tuition, a 2020–21 master’s in finance student at Owen would be looking at $60,750 for the 10-month program. A traditional, in-person MBA student would pay the same tuition—but for two years.

The degree outcomes are also an important factor for prospective students to consider. In 2019, Owen calculated its MBA graduates as coming out with an average salary of about $119,000, whereas its master’s in finance candidates had an average starting salary of about $79,000. Part of that difference can be explained by MBA graduates typically having more work experience, along with graduates in these programs pursuing different kinds of roles, even if they’re both in the realm of finance, according to information from the school.

A master of finance, or a master of business

Even though MBA and master’s in finance programs might overlap with courses and professors, they differ in how they treat the subject matter itself. 

“Those specialized masters are built to give you the depth of knowledge, where an MBA is really meant to give you that breadth of knowledge,” says Mallen-Churchill.

For prospective students who are struggling to figure out which program to pursue, Wilkerson recommends taking a step back and looking at the sorts of career outcomes you want in the long term.

“If you’re really clear about your career goals, the choice kind of becomes obvious,” she says. “For prospective students who are having trouble deciding, they should go back to square one: What do you hope to gain from this? What is the desired outcome?”