1. What Is Financial Engineering?
Financial Engineering (also known as Financial Mathematics, Mathematical Finance, Quantitative Finance, or Computational Finance) is an interdisciplinary field that combines finance, mathematics, and computer science.
Its courses are typically jointly offered by a university’s business school, mathematics department, and engineering school. The curriculum usually includes stock market analysis, portfolio analysis, futures and options, asset pricing, capital budgeting, fixed income analysis, interest rate models, financial risk management, etc. The program length is usually 1–2 years.
2. Financial Engineering Career Prospects
Taking Columbia University as an example, its official website shows that the 2016 Financial Engineering graduates had a 100% employment rate, and their average annual salary was $93,000.
(Data source: http://ieor.columbia.edu/fe-internship-and-job-placement)
The employment prospects for finance majors are also very broad. After graduation, you can choose to work in these areas:
Investment Banks (Securities Firms)
Renowned international investment banks Goldman Sachs, Citi, Morgan Stanley, JPMorgan, etc.; domestic investment banks CICC, Industrial Securities, Guotai Junan, CITIC Securities, etc. They mainly engage in IBD, Sales & Trading, Research, etc. High salary, high social status, but relatively difficult to enter.
Big Four Accounting Firms & Consulting
Financial engineering graduates can work at Big Four accounting firms PwC, Deloitte, KPMG, EY and strategy consulting firms McKinsey, BCG, Bain, Roland Berger, etc. as corporate strategy consultants. Relatively easier to enter compared to investment banks.
Funds, Trusts, Private Equity & Venture Capital
Mainly work as analysts; the industry barrier is high, and analysts gain high value after a few years of development.
Insurance Companies
Mainly engage in actuarial and risk control business, which are high-paying positions in the company.
Fortune 500 Large Corporations
Mainly responsible for the group’s financial accounting, capital management, cost control, internal control, etc.
3. How to Apply for Financial Engineering Programs
“Super high employment rate, high income, high entrepreneurial success rate,” these golden labels are attached to Financial Engineering, attracting tens of thousands of top students to compete for admission every year. However, victory always belongs to the few.
For Financial Engineering in the U.S., there are about 20+ schools ranked within the top 100. MFE application competition has become increasingly fierce in recent years; the admission rates of top-ranked programs are basically all below 8%. Each program has different focus areas in admissions. Do you know how to impress the admissions officers?
Standardized Test Scores
Financial Engineering programs require TOEFL and GRE scores; there is no GRE Subject requirement, and GMAT scores are generally not accepted. Although there is no hard rule, generally if you have GRE 320+ and TOEFL 100+, there are no fatal flaws in your English scores, and you won't be rejected because of GT. One thing to note is that most Financial Engineering programs require a GRE Quantitative score of 168+; if your GRE Quant is weak, it could hinder your application.
Academic Performance and Coursework
The most accurate reflection of your academic performance is GPA. An applicant’s GPA, especially in major courses, is naturally the higher the better; but a high GPA alone is not enough to secure admission. Your foundation in science and engineering is also very important—mathematics courses like probability theory, mathematical statistics, stochastic processes, and computer science courses like programming and data structures are highly valued in Financial Engineering. For most STEM students, these are not an issue. But if you haven’t taken these foundational courses yet, you should try to make up for them before applying. Otherwise, your competitiveness will drop, and the courses after admission will become more challenging.
Relevant Internship Experience
Financial Engineering is a career-oriented master’s program; each program’s goal is for its graduates to find a relevant job quickly, and employment rate is one of the metrics programs boast about. Therefore, a key concern for Financial Engineering admissions is whether the applicant can find a job. If you have extensive relevant internship experience during undergraduate studies (e.g., investment banks, securities firms), you will have a significant advantage in the application. Many schools will consider such applicants highly employable, and as long as other application materials are fine, the likelihood of admission is high. If you lack this, it will be a major weakness that needs to be remedied as much as possible.
Recommendation Letters
If you have a powerful recommendation letter, it will certainly give your application a boost; if not, it’s not a big issue, since this is not an academic-oriented program and there won’t be huge variance in the recommendation levels among applicants. The suggestion is to have two recommendation letters from professors in your major and one finance-related letter (either from a professor who taught you a Financial Engineering-related course or from a relevant internship supervisor). The professor’s letter should highlight a strong quantitative background; if you have one from an internship supervisor, it should highlight your performance and abilities on the job.
4. How to Overcome Your Own Weaknesses
At this point, you need to use your application essays to compensate for or explain why you have these weaknesses, or to highlight your strengths so that the weaknesses are less noticeable. Hard stats are rigid, but essays vividly reflect a person. Essays not only tell schools why and based on what you are applying to this program, but also show what kind of person you are. More importantly, they can be used to play up strengths and downplay weaknesses, explaining and compensating for some shortcomings in your hard credentials.
GPA Not High Enough?
If your GPA was low in your first two years because you were playing around and studying less, but improved significantly in your junior year, you can tell a story of effort and transformation from low to high grades.
No Internship Experience?
Then in your PS, you can highlight the Financial Engineering-related courses you took, class projects you completed, books you read, seminars you attended, or relevant competitions you participated in to compensate. Also, emphasize your interest and passion for Financial Engineering, show that you have a high probability of finding a job, and elaborate on your insights and views on the financial market.
What Are Some Bonus Points?
As mentioned earlier, a strong quantitative background is a prerequisite for successfully taking Financial Engineering-related courses. Some programming ability and background is also an important condition for admission to most Financial Engineering programs. Programming here does not mean very advanced computer science courses; at the time of application, having a basic programming foundation is sufficient, whether it’s C++, Java, or mathematical/statistical software like MATLAB, R, etc. As long as you have some foundation and can use one or two programming languages to do simple programs, it’s fine. Most Financial Engineering programs will involve programming to some extent, and some programs don’t offer dedicated programming courses, so having a foundation is a great fit for the program’s requirements.
Your own strengths and unique qualities. In your PS, highlight your strengths to stand out. This could be a rare relevant experience, your reflections on a finance seminar or the financial market, or your future career plan. In short, anything you have that most others don’t will leave a strong impression.
Why apply to this school? Sometimes a lack of sincerity can be a reason for rejection. Every school has its own style and requirements. Not only should you write your PS according to the school’s requirements, but you should also deeply understand the school and reflect in your PS that you know and appreciate the program and how well you fit it, so that the school will favor you. For Financial Engineering, each school more or less has its own focus—some are more theoretical, some more practical, some have great locations, some emphasize networking cultivation. If your PS can express that what you prefer aligns with the school’s focus and what you want to learn is exactly what the school excels at and can provide, then the school will believe your sincerity and know you are not simply mass-applying.
In short, in application essays, everyone has plenty of room to play to their strengths. For your weaknesses, learn to dig out relevant highlights from your experiences, amplify those highlights, and let the reviewing professors notice more of your shining points, thereby downplaying your weaknesses.
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