Should you bother getting a master’s if you want to be a quant in the financial services industry? It certainly translates into a pay bump for those trying to break into this sub-field of finance and mathematics. But if you really want to make a difference in your entry-level pay, you’ll need to achieve a PhD. (And keep in mind that quants with the right qualifications and experience can make more than a million dollars per year, so sticking with it is important if you truly want to score the big bucks.)
We based these compensation figures off mathematics graduates from the London School of Economics (LSE). LSE mathematics students have the option of taking a bachelors in mathematics and economics, a masters in applicable or financial mathematics, or a PhD in mathematics. All LSE mathematics cohorts go into banking or hedge funds (although PhD students also have a tendency to teach), which makes this a good dataset for comparing salaries and degree impact in a relatively scientific way.
Only the PhD students earn a lot more than the rest from the outset. For the most recent graduating class, LSE’s 161 mathematics bachelor’s graduates with jobs earned a median salary of £29,900 (roughly $36,500). Its 86 master’s graduates with jobs earned a median of £30,000, and its 10 PhD graduates earned a median of £39,500.
The longer you stay in school, the more chance you have of skipping quant jobs in banks and going straight to the higher-paid jobs in tech firms or on the buy-side.
The LSE’s quants with bachelor’s degrees got jobs with the Big Four accounting firms, plus institutions such as Bank of America, Barclays, Citi, Credit Suisse, Goldman Sachs, JPMorgan and Jefferies. Credit Suisse alone took six, Deloitte took nine, and Deutsche Bank took four LSE bachelors graduates last year.
The LSE’s quant graduates with master’s degrees also got jobs with banks such as JPMorgan, but more turned up on the buy-side at companies such as Blackrock or Brevan Howard. And the graduates with mathematical PhDs mostly went into academia, with one also going to hedge fund Cantab Capital Partners (a subsidiary of GAM Systematic holdings, which paid its 59 employees an average of £240k in 2018, according to company accounts) and another going to Amazon.
Notably, the LSE’s pay figures suggest you can earn more with a master’s in finance (with entry-level pay of £42,000 or $51,387) or economics (with entry-level pay of £34,000 or $41,599) than in mathematics. Some of the school’s best-paid recent graduates have studied the master’s in finance and private equity, and command entry level salaries of £45,000 ($55,000), reflecting the fact that being a quant is not always the most remunerative career path.
This article originally appeared in eFinancialCareers.