financial economics degree

Are you debating whether you should get a master’s degree in Financial Economics or another related degree as you assess your postgraduate options? Financial economics is a specialized field where you will use your math and analytical skills to help individuals, companies, and government agencies make the best use of their money. You need to understand what you think about pursuing a degree in this field and what this degree will prepare you for after your postgraduate education.

Having a graduate degree where you learned about financial analysis and economic theory can prepare you to be an asset to prospective employers when you pursue a mid-level or upper-level finance position. Continue reading to learn more about the Master of Financial Economics degree program and how it will prepare you for new career opportunities.

What is Financial Economics?

financial economics

Financial economics differs from traditional economics because it only focuses on monetary transactions and how transactions guide financial decisions. Financial economists analyze the value of money and other financial assets. This focus differs from traditional economics, which studies how monetary transactions affect the exchange of goods and services.

Students in financial economics study economics, accounting, and finance to develop critical thinking skills to solve financial problems. Financial economics involves applying complex mathematical equations to solve financial problems, analyzing massive amounts of financial data, and using computer models to predict financial outcomes. Financial economists look at the impact of financial transactions on many economic areas such as inflation, interest rates, price fluctuation, and gross domestic product.

What is the Structure of a Master of Financial Economics Degree Program?

When you take classes in a graduate-level Financial Economics program, you will notice the curriculum covers economic theory, modeling, and application. The actual structure of the program and the number of classes you need to take in each area of the curriculum can vary from school to school. Enrollment in a degree program like this will typically take 12 to 18 months of study to complete as a full-time student.

You will need an undergraduate degree to apply to the Master of Science in Financial Economics program. Most schools do not require your undergraduate degree to be in Finance, Economics, or Business. However, you will need to have completed class requirements in math and statistics. Here is a breakdown of the type of classes you will take in the Financial Economic graduate degree program:

Economic Theory

The theory component teaches students how to make decisions in uncertain situations based on economic models taught in finance courses. Students also learn about investment assumptions and why some assumptions do not always hold in financial markets. A sample of some of the economics theory classes students take in this area include:

• Money and Capital Markets
• Economic Forecasting
• Commercial Banking
• Macroeconomic and Microeconomic Analysis

Economic Modeling

The curriculum for economic modeling focuses on theoretical and application study. You will learn about documenting economic models, implementing these economic models, and various aspects of computational finance. A sample of some of the financial economics classes that students take in this area include:

• Econometrics
• Economic Programming and Optimization Analysis
• Game Theory Economics
• Graduate Quantitative Preparations

Economic Applications

Graduate students studying financial economics need to learn how to apply economic principles like valuation, forecasting, and security analysis. This practical knowledge is necessary to work in the financial sector. Some of the classes in the economic application curriculum that is in this program include:

• Fundamentals of Financial Management
• Legal Implications of Financial Transactions
• Economic Planning
• Security Analysis and Portfolio Management

What Careers Can You Pursue with a Degree in Master of Financial Economics?

economics jobs

When you graduate with a master’s degree in Financial Economics, you will be ready to play a key role in a career in banking and finance. The theoretical nature of the degree will prepare you for a variety of financial economics jobs. Here are a few career choices you can consider when you complete your master’s degree in Financial Economics:

1. Economist

An economist analyzes all aspects of economic production and how it affects the distribution of goods, services, and other resources. They analyze topics such as healthcare, interest rates, energy, education, and the environment. Some of the duties of an economist include:

• Researching, collecting and analyzing economic data
• Interpreting and presenting research results through reports
• Making economic forecasts
• Advising individuals, businesses, and government agencies
• Finding solutions to economic problems

Economists work in state and federal government agencies, consulting firms, financial services, and education. The Bureau of Labor Statistics expects a strong 14% job growth for economists over the next ten years. The median annual salary for economists is $108,350. The highest median wage is $129,060 for economists in the finance and insurance sector.

2. Data Analyst or Economic Researcher

There are several types of data analyst careers. The one data analyst career relevant to graduates with a degree in financial economics is a market research analyst position. A market research analyst studies market conditions to determine the sales potential of different products and services. Some of the duties of a market research analyst include:

• Research and forecast sales trends
• Collect consumer, competitor, and market condition data • Use statistical software to analyze the data
• Prepare and present reports to clients

Many market research analysts work in consulting, financial services, publishing, and wholesale trade. The median annual income in this career field is $65,810. Market research analysts in publishing have the highest annual median income at $79,040. Job growth of 18% is expected over the next ten years.

3. Personal Financial Advisor

Personal financial advisors work with individuals and families by giving them advice on their finances. They advise on investments, insurance, retirement planning, estate planning, real estate, and college planning. Some of their duties include:

• Meet with clients to discuss their financial goals and financial options
• Recommend investments and other financial services
• Help clients plan their financial future
• Monitor client portfolios and make the necessary adjustments
• Research other financial opportunities

Most personal financial advisors work for banks and investment brokerage firms. Other advisors work for insurance companies, or they are independent self-employed advisors. A license is required to be a personal financial advisor. Registrations and certifications may also be required. The median annual income for personal financial advisors is $89,330, and some make well over $200,000 a year.

4. Financial or Investment Analyst

The job of a financial analyst is to help individuals and businesses use the money they have to make a profit through stocks, bonds, and other types of investments. The duties of a financial analyst include:

• Evaluating and recommending individual investments
• Examining and evaluating economic and business trends • Assessing the strength of an investment portfolio
• Evaluating financial data

Financial analysts work in the same type of environment as personal financial advisors. Many financial analysts work for banks, investment brokerage firms, insurance companies, financial consulting firms. The median annual salary for financial analysts is $83,660. Financial analysts who work for brokerage firms have the highest median annual salary of $98,850.

5. Accountants and Auditors

Businesses and individuals need to keep accurate financial records. Accountants and auditors examine financial records for accuracy and prepare financial records to present to their clients. Some of the duties of accountants and auditors include:

• Prepare accurate tax returns
• Make sure financial documents comply with laws and regulations
• Analyze, organize, and maintain financial documents
• Make financial recommendations to management

Most accountants and auditors work for accounting firms. They also work for insurance companies, brokerage firms, and government agencies. The median annual salary for accountants and auditors is $73,560. Those who work for insurance or brokerage firms have a median annual salary of $78,600. An increasingly complex tax and regulatory environment will ensure strong employment growth for accountants and auditors.

6. Actuary

There is inherent risk and uncertainty when making financial decisions. Actuaries help their clients assess the risk of their financial decisions and develop strategies that can potentially minimize the cost of these decisions. Actuaries have several duties, including:

• Using computer database software to collect and analyze information
• Estimating the likely financial cost of certain events like death, sickness, accidents, and natural disasters
• Designing financial tools and strategies to minimize risk and maximize profits
• Using charts and graphs to explain their findings to key business and government executives

Actuaries usually work in teams and collaborate with other financial experts like economic researchers, financial analysts, and accountants. Most actuaries work for insurance companies and specialize in one area of insurance, such as health, life, or property and casualty insurance. They also work for government agencies where they monitor, examine, and evaluate Social Security and Medicare programs in addition to regulating insurance companies.

Actuaries can help business owners with their short-term and long-term business objectives by identifying financial risks and developing strategies to address these issues. Actuaries can also work with businesses to reduce the risks and maximize the returns of their pension plans and retirement benefits.

The median annual salary of an actuary is $111,030, and some earning up to $200,000 a year. The projected job growth in this field is 18% over the next ten years. Passing actuarial exams is required for job placement.

7. Investment Banking

Investment bankers work in the securities, commodities, and financial services industries. Investment bankers act as intermediaries between businesses that need capital to expand their operations and investors willing to finance these expansion efforts. Investment bankers provide many services, including:

• Underwriting the funding process
• Selling and providing advisory services to businesses
• Helping companies issue new stocks and bonds and sell these to investors through an Initial Public Offering (IPO)
• Helping two companies connect through a merger
• Helping a company buy another company through an acquisition

Before an IPO, merger, or acquisition happens, investment bankers must place an accurate value on a company. They must also make sure the company is following state and federal laws and regulations. They have tight deadlines to meet to make these transactions happen because the value of a company can change at any time.

Investment bankers spend much of their day on the phone and computer advising their current clients and selling their services to new clients. The median annual income for an investment banker is $64,770. Successful investment bankers can make well over $200,000 a year. Projected job growth in investment banking is in the average range compared to all other occupations over the next ten years.

8. Management Consultant or Analyst

Management consultants help companies and business owners improve their operational efficiency. They make recommendations on how the business can be more profitable by increasing revenues while reducing costs. They play a vital role in helping companies develop strategies to remain strong in a competitive market. A management consultant has several duties to help a business improve its operations, which includes:

• Conducting onsite observations noting how the company operates
• Interviewing personnel to understand their perspectives about the company
• Analyzing financial data and employee records
• Creating solutions by recommending new procedures, systems, and organizational changes
• Monitoring these changes for effectiveness while following up with the managers

financial economics

Each project has its own unique set of problems for the management consultant to solve. A management consultant may work with a team when dealing with a large company, or they may work independently with a small business. Management consultants typically specialize in one area of business operations, such as inventory control, employee acquisition, and retention, or organizational restructuring.

Management consultants spend much of their time outside of their office. They travel frequently and do their work at their client’s business. Many management consultants are self-employed who work on a contractual basis and get paid directly from their clients. Other management consultants work for consulting firms where they receive a salary and bonuses.

The median annual salary for a management consultant is $87,660. Top earning management consultants can earn over $150,000 a year. Job growth is projected to be strong in management consulting over the next ten years, especially in healthcare, information technology, and human resources.

The field of financial economics has an average annual salary of $115,000 per year. Many people with varying career goals are attracted to this degree program. There are strong employment opportunities in a variety of industries that are associated with having a degree in financial economics. Job stability and excellent starting pay are positives for people in this industry.

Before you decide on a career path in the financial services industry, make sure you understand the requirements of that career, including degree, licensing, and certification requirements. You should also compare all the related degree fields like economics, accounting, business, and statistics so you know if a graduate degree in Financial Economics is the best professional option for you.

Related Resources: