Salaries for masters graduates in finance sector power ahead

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Salaries for graduates of leading masters in finance programmes have grown much faster for those working in financial services compared with other sectors, in a sign of the industry’s strength. 

The latest Financial Times ranking shows that, among those who completed a masters in finance degree three years previously in one of 65 ranked schools, the average salary was $98,000 this year for those working in finance — up 12 per cent compared with 2023. For the third of graduates who chose to work in other sectors, the rise was 3 per cent to $78,000. 

Masters in Finance ranking 2024

This year’s FT ranking of courses

The trend pointed to a fresh boost in the relative attractiveness — in salary terms — for graduates working in finance, and marked the largest pay differential in at least eight years.

The average salary of female graduates working in finance jumped to $91,000, narrowing the gap to men’s slightly, to 8 per cent, highlighting the still considerable disparity in what is traditionally a male-dominated career.

Chris Connors of Johnson Associates, a New York-based financial services remuneration consultancy, notes that the surge in earnings was also seen in his firm’s data. He says it was caused by higher initial pay amid fierce competition for recruits, subsequent increases linked to high inflation and a recent rise in bonuses after two stable years.

“The sector was hiring like crazy and the war for talent was very pronounced, with way higher turnover,” he says. “Since 2021, base salaries have risen far more than historical rates in financial services.”

For the second year, ESCP maintained its position at the top of the FT ranking of “pre-experience” courses — for students with little or no prior professional work — while three other French-based schools were in the top four: HEC Paris, Skema, and Essec. London Business School retained its top position among the few institutions that offer a “post-experience” course for those who already have sector experience, ahead of the University of Cambridge: Judge and the University of Amsterdam — Amsterdam Business School. 

Among alumni of “pre-experience” courses who then go to work in finance, graduates who take a job in trading had the highest average starting salaries at $80,000, while those in non-financial sectors earned the least at $55,000. Three years after graduating, the top earners were those in private equity, venture capital, and hedge funds, earning an average of $120,000.

Since 2017, nearly three-quarters of these courses’ graduates have entered financial sector employment and, in each year, have earned more than those who go into non-financial sectors. The salary gap between graduates working in the financial and non-financial sectors has increased to $20,000, up from $6,000 in 2017.

The 2024 rankings were compiled using data from business schools and alumni who completed their masters in 2021. Participation by institutions is voluntary, and the list is weighted according to factors including salaries, gender balance and value for money.

The ranking data shows that there is still a significant majority of men, both as students and teachers. Just three of the 65 ranked schools had gender parity among faculty — IE in Spain, and Grenoble Ecole de Management and Iéseg in France. The proportion of female staff was as low as 17 per cent at Università della Svizzera italiana in Switzerland.

Among student cohorts, just Toulouse School of Management and Skema Business School in France had gender parity, while on average just over a third of the classes were female. The figure was as low as 11 per cent at Lucerne School of Business in Switzerland. 

The strength of the earnings increases is one possible reason for the continued demand for finance masters, despite a wider stagnation in less specialised business and management degrees, notably in Europe and North America.

Disruption of traditional finance jobs by artificial intelligence — with changes to both basic data entry and more sophisticated analytical work — has also sparked a restructuring by recruiters and a likely shift in students’ interests.

At the same time, several business schools say employers are increasingly demanding so-called “softer” skills, such as teamwork, communication and critical thinking, alongside “harder” quantitative skills, including coding and financial analysis.

Students are keen for greater hands-on project-based “experiential” learning with companies, too, and are pushing to learn about newer technologies such as cryptocurrencies, as well as ways to engage with sustainability and societal impact.

The FT ranking takes account of business schools’ approach to sustainability through their campus commitments to net zero emissions and publication of carbon emissions audits. Here, SDA Bocconi/Università Bocconi in Italy performed best, followed by BI Norwegian Business School and IE in Spain.

Across the ranked schools, alumni rated their strongest courses as corporate finance, investments and statistics. Compliance received the lowest rating from the graduates.

North American courses were the most expensive per month on average, while those taught in continental Europe were the cheapest — below the price for UK and Asia-based schools.