If you think like an engineer and are wanting to work in high level financial planning, reporting, and consulting careers, then you may consider pursuing an online masters in financial engineering.
The investing world is plagued by volatility, fascinated with complex investing products where valuations and risks are hard to measure and forecast. Complex algorithms are now starting to replace yesterday’s investment and portfolio managers.
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With the right qualifications and a master’s degree in financial engineering, you might just find a lucrative niche in this complex world of financial modeling, analysis, and forecasting.
Online Masters in Financial Engineering Programs
Financial engineers are trained to tackle some of today’s most complex financial planning and investment challenges.
They can also help engineer new methods and software for improving forecasting outcomes or for making empirical models that take into account complex asset and market variables.
This field combines expertise from a range of fields that traditionally have operated in separate spheres. So, for most professionals, moving into this field can be both challenging and rewarding.
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Financial engineers often need strong foundations in domains as diverse as:
- Financial reporting, accounting, and forecasting
- Software engineering and coding
- Calculus, statistics, and other advanced math
- Risk-assessment and risk-management analysis and reporting
- Macro-economic or micro-economic concepts and data
A masters degree in financial engineering can help open doors to a range of specialized financial analyst roles. Professionals in the field can also develop, manage, or sell complex financial services, tools, or products.
Financial engineers can work for any number of large financial institutions. These could include:
- Investment banks
- Investment fund management firms
- Investment and financial services consulting or advisory firms
- Hedge funds
- Economic and market research firms and institutions
Rigorous financial engineering masters programs could require a foundation in a number of technical fields as well as concepts from advanced applied math and statistics. If possible, you can try planning ahead with the knowledge of the kinds of overlapping skills and prerequisite courses you might need to get into a master’s program.
Financial Engineering Careers & Salaries
According to the Bureau of Labor Statistics, careers related to financial engineer, such as financial manager, financial analyst, and economist, typically earn higher than average wages. A masters degree may also help you qualify for a higher starting salary.
|Careers||Annual Median Salaries|
|Personal Financial Advisors||$87,850|
|Operations and Research Analysts||$84,810|
|Securities, Commodities, and Financial Services Sales Agents||$62,270|
With a masters degree in the relatively young field of financial engineering, you might be able to make a niche play and position yourself for lucrative earnings down the road.
Financial Engineering Master’s Curriculum
Some graduate programs emphasize one concentration more than another, such as financial reporting skills or programming expertise.
While curricula will vary, it’s likely that the kinds of courses offered by financial engineering graduate programs will broadly resemble the ones listed here:
- Foundations in Math and Statistics: This might be a core class or refresher format that provides students with the mathematical concepts and mental frameworks needed for working with complex financial analysis formulas and software algorithms.
- Asset Pricing: This course covers standard methods for analyzing financial data and assigning asset valuations, including fixed income assets, derivatives, and a variety of pricing models.
- Advanced Portfolio Theory: You’ll learn about methods for managing and balancing large financial and investment portfolios, including methods and principles for diversifying assets, modeling appreciation, measuring risk, and using complex risk management strategies and tactics.
- Quantitative Finance: This course covers a variety of empirical methods and software tools, financial databases, and software-assisted strategies for predictive modeling and financial planning and estimation, including credit risks, probabilities, and volatility.
- Complex Asset Classes: This course helps you master the application of advanced mathematical calculations for assessing and valuing derivatives and other complex, financially-engineered assets and financial products.
- Optimization Models: You’ll learn about optimization strategies and methods, including a range of modeling methods and their use in relation to asset pricing, diversification, fixed-income assets, and risk management.
- Risk Analysis and Forecasting: This course is an overview of risk analysis and forecasting practices and methods in relation to a broad array of risk factors that include broad market risks, credit risk, risks related to liquidity, volatility risk, and other factors and risk-modeling methods.
- Financial Reporting: You’ll learn about empirical methods and research tools used for financial reporting, and you’ll explore software tools for creating and publishing reporting deliverables in a range of accessible and graphically-enhanced formats.
- Financial Engineering Algorithms: This course is an introduction to the design, use, and applications of financial engineering algorithms with an emphasis on predictive market modeling and passive investment tools.
A financial engineering graduate program can help you develop comprehensive financial engineering and analysis skills. You may be equipped to pursue positions in a range of financial institutions, including financial advising and consulting firms, hedge funds, economic policy institutes, insurance companies, and investment banks.
How to Become a Financial Engineer
A master’s degree is required to become a financial engineer. A masters in financial engineering will cover a variety of topics, ranging from software engineering to advanced portfolio management.
In their work, financial engineers typically apply mathematical analysis, financial analysis, and even some software programming and software engineering concepts.
For this reason, financial engineering graduate programs often involve the application of discrete skills from multiple fields. These fields include not only finance but also advanced math, engineering, economics, and software development or coding.
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If you’re interested in a financial engineering masters down the road, checking out prerequisite knowledge requirements ahead of time can be a strategic move.
Here’s what your roadmap might look like:
- Complete your bachelors degree. Get a bachelors degree, preferably in finance, mathematics, or computer science. Try to fulfill any prerequisites you’ll need for your masters degree.
- Complete any prerequisite courses. Understand what prerequisite courses are essential for the kinds of MS in Financial Engineering programs you’re interested in. Complete any required courses you have yet to take.
- Enroll in a masters degree program. Find the right online masters degree in financial engineering program for your goals and interests.
- Find an internship. While not always required, working in an internship during or after your masters program can help you get hands-on learning and some work experience.
It can help to compare master programs since they can vary in rigor, course offerings, and areas of specialization.
For example, one financial engineer might specialize in developing or programming financial software tools. Another financial engineer might use his or her specialized knowledge to sell financial products and services to retail investors or to financial institutions.
Admissions requirements can vary widely by school. Most programs require applicants to have strong foundations in advanced applied math, mathematical analysis, statistics, and either some coding or other software programming or engineering skills.
The following are common admissions requirements for many accredited financial engineering masters programs:
- Bachelor’s degree, preferably in a related field
- Specified prerequisite courses (as needed)
- Specified work experience (if required)
- GRE or GMAT test results (if required)
Some programs may want applicants to have a bachelors degree in a related field, such as math, finance, or computer programming. You can check out online graduate degree programs today to learn more about what’s required for admissions into various programs.
When you’re exploring engineering masters online programs, it’s strategic to stick with fully accredited schools and degree programs. Regional accreditation helps ensure that you’re engaging with schools with satisfactory academic standards and quality services that support their students’ success.
In addition, if you choose a program that’s fully accredited, you can be more confident that the curriculum will provide you with the level of rigor and preparation you need to advance in the field.
Accreditation can also be essential if you hope to qualify for certain types of financial aid. The Council for Higher Education Accreditation (CHEA) has more information about regional accreditation on their website.
Financial Aid and Scholarships
Getting a masters can be another step toward finding more satisfying work with better pay down the road. It can also be challenging at times to cover the upfront costs. Applying for financial aid may be one way to move forward, even if you need some financial assistance to take the next step.
Financial aid can come in the form of federal or state assistance, need-based or merit-based scholarships, or work study opportunities. You may also qualify for some form of employer-based assistance if you’re currently working in the financial products and services field.
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Student loans are another common form of financial aid. Loan terms can vary, so it’s beneficial to review financial aid offers carefully before proceeding. If you plan on applying for assistance, you can start by submitting the Free Application for Federal Student Aid (FAFSA).
What Is Financial Engineering?
Financial engineering is the application of complex mathematical calculations and specialized computer algorithms for delivering rigorous empirical analyses.
Financial engineering is used in financial forecasting services, complex financial modeling services and software, advanced portfolio management strategies and services, and financial risk-assessment products, services, and reporting.
A financial engineer might specialize in programming financial software tools or using applied mathematics to provide complex valuation or risk assessment reporting and advising services.
Financial engineers can work with any number of financial or professional services institutions. They can work with investment banks, hedge and equity fund management firms, accounting and financial planning firms, and financial software firms.
What Can You Do with a Masters in Financial Engineering?
The Bureau of Labor Statistics forecasts above-average job growth for financial analysts over the next ten years. With globalization and the onset of complex financial assets, computing algorithms, and advisory services, the growth in this field may come as no surprise.
Financial engineers have a unique mix of training in math, finance, and computer programming.
Financial engineers can use their training to help financial service and investment institutions develop reliable and empirically sound financial forecasting, valuation, and risk-assessment tools. To accomplish their work, they can use traditional methods and also engineer new ones, including machine learning and advanced software applications.
Financial engineers can use their skills as specialized financial analysts, high-level personal financial advisors, or institutional investment portfolio managers or advisors. They may also work as securities, commodities, and financial services sales agents.
Is a Masters in Financial Engineering Worth It?
Yes, a masters in financial engineering is worth it for many students. The financial engineering field is relatively new. Getting a MS in Financial Engineering could be a way to position yourself in a specialized niche within the financial services industry and set yourself apart from the crowd.
The Bureau of Labor Statistics predicts 5% job growth for business and financial occupations over the next ten years, and financial manager positions are expected to grow 15%.
The courses you take, your professional experience, your areas of specialization, and even your location are all factors that can impact your future career path in this growing field.
Universities Offering Online Financial Engineering Masters Degree Programs
Methodology: The following school list is in alphabetical order. To be included, a college or university must be regionally accredited and offer degree programs online or in a hybrid format.
Carnegie Mellon University offers a Master of Science in Computational Finance. Their online program is designed to last for 2 years and requires a summer internship.
To be eligible for the program, students must have completed courses in calculus, calculus-based probability, linear algebra, and object-oriented programming language courses. MSCF Prep courses are available in August and last for 4 weeks.
Carnegie Mellon University is accredited by the Middle States Commission on Higher Education.
The Georgia Institute of Technology offers a Master of Science in Quantitative and Computational Finance online program. Students must complete 36 credit hours, including 9 free electives that are relevant to the degree.
To be eligible for the program, students must have an undergraduate degree with calculus credits and programming knowledge.
The Georgia Institute of Technology is accredited by the Southern Association of Colleges and Schools Commission on Colleges.
The Stevens Institute of Technology offers an online Master’s in Financial Engineering program. The program is delivered in 2 blocks, with a capstone project that allows students to act as consultants in the industry.
To apply, students must have completed courses involving calculus, linear algebra, programming, and probability and statistics.
Stevens Institute of Technology is accredited by the Middle States Commission on Higher Education.
The University of Southern California offers a Master of Science in Financial Engineering online program. The program can typically be completed in 2 years and requires 30 units with a minimum 3.0 GPA to graduate. Students must have a bachelor’s degree in an engineering or finance field along and GRE scores.
The University of Southern California is accredited by the Western Association of Schools and Colleges, the Senior College and University Commission.
The University of Washington offers a Master of Science in Computational Finance & Risk Management online program. To graduate, students must receive 42 credits, with 26 credits being from mandatory coursework and 16 from electives.
The distance learning program is designed for part-time students. To be eligible for admission, students need experience with calculus, probability, and programming.
The University of Washington is accredited by the Northwest Commission on Colleges and Universities.
Getting Your Masters in Financial Engineering Online
A masters degree in financial engineering can open up the door to various career and advancement opportunities in the financial sector.
There are a range of fully accredited Master of Science in Financial Engineering online degree programs to choose from. For instance, there are full-time programs with rigorous, 2 year curriculum offerings, and there are also programs that have adjunct courses for fulfilling prerequisite coursework. This is similar to what you would see in online biomedical engineering masters or masters in petroleum engineering online programs.
You can start exploring accredited online engineering degree programs today to discover which ones best match your goals and interests.
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