Is Finance (and Fin. Engg.) a shrinking industry?

[kavini]

I am going to graduate with a bachelors in computer science and masters in math. I have secured admission to CMU's MSCF program. Since my undergraduate studies I was fascinated with the application of science to finance. Hence I worked hard to get relevant internships and grades that have brought me so far.

Yet with the recent downturn in financial markets and the job market, this endeavor will be prove to be a high stakes one, financially and professionally.

I am also very interested in programming and computer science. I am passionate about training myself to improve efficiency in systems using data and modelling. Yet my profile is not strong enough to secure admission at an equivalent prestigious program for computer science at this stage I feel.

After reading countless posts on this forum I have understood that the best mfe grads may still find jobs but it is increasingly becoming very hard and competitive. I want the forum to give me their opinions on:

• What will the job prospects be for an average quant? What kind of work and salaries can they expect in 2 years time on an average?
• On a personal level, what if I work hard for a couple of years and try my luck at getting an equivalent program for computer science. And so try to make a career in data analysis in a different field instead of finance? Would this be a better strategy than trying to launch myself in an increasingly difficult field where infact I may be able to apply my skills more fruitfully in the wide areas that computer science has to offer? Am I correct in thinking this way?

All knowledgeable and experienced opinions are welcome and crucial at this stage for me.

 

[financeguy]

There is no doubt whatsoever that the finance/FE industry is shrinking. Jobs and salaries, particularly at banks, are declining and probably still have room to fall further. There will always be a need for quants, just not as many, and not for as much money. There are a lot of people going for fewer jobs. I'd expect you'd make $100k-$160k or so in your first year, depending on what kind of gig you land yourself (assuming you have no full time professional experience). That's of course if you do manage to find a job in the field. If I were you, I'd try to go to a hedge fund rather than a bank, but who know what the landscape will look when you graduate.

 

[Joey Zhao]

Buy low, sell high. Shrinking is not necessarily a bad sign. In fact, the great recession is one of my reason for choosing a quantitative finance degree. Those who suffer most during the economic down turn will probably receive the best benefit when the economy bounces back. I'd say go for what you really love. If you are a really good quant, the big picture won't impact you much.

 

[bigbadwolf]

Buy low, sell high. Shrinking is not necessarily a bad sign. In fact, the great recession is one of my reason for choosing a quantitative finance degree. Those who suffer most during the economic down turn will probably receive the best benefit when the economy bounces back. I'd say go for what you really love. If you are a really good quant, the big picture won't impact you much.

Why will the economy "bounce back?" It's the politicians and their tame economists who've been saying this is a cyclical downturn but there's no evidence for this. For the last five years I've consistently maintained this is a depression out of which there's no emerging. There has been an enduring negative impact on finance jobs as well, whose contours become clearer with each passing day. Right now I suspect the US will remain stuck in this "new normal" situation for the next two years (e.g., declining GDP in the last quarter of 2012 by even the government's own rigged criteria) and then a new crisis (sharply rising energy prices, dollar crisis) will force it to a new lower level. I also suspect finance and financial jobs will face the brunt of the new decline.

 

[shivgan joshi]

I like Finance but the job market is down, sometimes I think I should do master of computational engineering as that is the field in which I can later on link to Finance. I am in between Electrical Engg and Quant finance but I like Quant Finance so I will do any low paying job in quant finance over a job in other field.

My 2nd best area is computational engineering where modeling of Quant Physics and Nano domain simulation which was exciting but not as impactful as modeling Financial risk or complex derivative pricing.

Also in India even the best of jobs in IB (international research employer for top 3 IB) pays 5-8 USD/hour which is less even after considering that India is cheap place to live. CFA L2 pass, FRM charter getting pays like this. Also working hours are extreme as there is no labor laws and regulation. but still finance job is better in india as compared to other jobs in india. I believe Indians jobs in finance are not coming down as much as west due to cheap labor.

 

[Joey Zhao]

Why will the economy "bounce back?" It's the politicians and their tame economists who've been saying this is a cyclical downturn but there's no evidence for this. For the last five years I've consistently maintained this is a depression out of which there's no emerging. There has been an enduring negative impact on finance jobs as well, whose contours become clearer with each passing day. Right now I suspect the US will remain stuck in this "new normal" situation for the next two years (e.g., declining GDP in the last quarter of 2012 by even the government's own rigged criteria) and then a new crisis (sharply rising energy prices, dollar crisis) will force it to a new lower level. I also suspect finance and financial jobs will face the brunt of the new decline.

True.