How to become a Financial Engineer
Higher education is becoming more and more interdisciplinary in nature. Students find themselves at cross roads after completing their undergraduate course, be it three or four years courses. Here is a new road for maths and engineering degree holders which combines higher mathematics (linear algebra, differential calculus, stochastics etc.,), financial theories and software programming. You can become a financial engineer. It is a one year masters degree in financial engineering (MFE or M.S.) and reputed international universities in U.S., Singapore and Europe offer these courses. The most well known instituitions are Cornegie Mellon, Columbia University, Baruch College, UB State University of New York, Natinal University of Singapore and Nanyang Technological University, Singapore.
Things You'll Need
You must be an Engineering or mathematics, economics or commerce graduate ( B.E., B.Tech.,B.S., B.Sc., B.Com etc.,) with a good score. Strong mathematical background is a prerequistie. Knowlege of C# and general financial software programmes will be a plus. GRE score is to be provided and TOEFL is a must if the medium of instruction in your undergraduate course was not English. Even if it was English, better you take TOEFL examination and provide the score. Though experience in financial services or financial software industry is not essential it helps you get admission. The average experience levels of students in National University of Singapore (Risk Management Institute RMI) is five years. You need to be academically sound and should have exellent quantitative and communication skills. You need to convince the programme directors that you can deliver the goods!
Steps
As is told already, Financial Engineering is an inter disciplinary course. The duration is from one to one and a half years excluding intership in reputed financial firms. You can visit the websites of the concerned universities and know the modules and they are very intensive. The fields in the finance industry are Investment Banking, Pension and hedge funds, Stocks, Equities and derivatives, Risk and Asset Management, Portfolio Management (stock Exchanges). You have to learn to develop financial models. You will learn to develop financial software programmes too. In the meantime you will learn the basics of international financial market. This course differs from M.B.A. (Finance) because it stresses more on the quantitative aspect of the science and the financial industry is in need of such specialists, called "QUANTS". Te get an idea of the career of a financial engineer, read Emanuel Dermann's "My Life as a Quant". Remember financail engineers are neither stock traders nor pure software techies but something in between/
With a M.S. in Financial Engineering you can land in jobs in investment banking firms like Goldman Sachs, banks like UBS, Credit Suisse, Citibank N.A., etc., or business analytics industry. Your designation will be Financial Engineer, Business Analyst etc., at the beginning. In U.S.A., financial engineers' starting salary ranges from 75000 to 115000 dollars per annum. It can be more if you are exceptional.
Caution
Stock markets and financials are risky in nature and you should have nerves of steels to survive. But investment finance markets including banks have come to stay and it is a great career. Only the market needs to be understood for which you need to be strong in finance and mathematics. And even Lord Shani does not test one who is strong in mathematics.
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