Salaries for master’s students in the financial sector are on the horizon

Stay informed with free updates

Simply log in to the Business courses myFT Digest – delivered straight to your inbox.

Salaries for graduates of leading master’s in finance programs have grown much faster for those working in financial services compared to other sectors, which is a sign of the industry’s strength.

The latest Financial Times rankings show that, among those who completed a master’s degree in finance from one of the 65 ranked schools three years earlier, the average salary this year was $98,000 for those working in finance – an increase of 12 percent compared to 2023. third of graduates who chose to work in other sectors, the increase was 3 percent to $78,000.

The trend indicated a new boost in the relative attractiveness – in salary terms – for graduates working in finance, marking the widest pay gap in at least eight years.

The average salary of female finance graduates rose to $91,000, narrowing the gap with men to 8 percent, highlighting the still significant inequality in what is traditionally a male-dominated career.

Chris Connors of Johnson Associates, a New York-based financial services compensation consultancy, notes that the profit increase was also visible in his company’s data. He says this was driven by higher starting wages amid intense competition for recruits, subsequent increases linked to high inflation and a recent increase in bonuses after two stable years.

“The industry was hiring like crazy and the war for talent was very pronounced, with much higher turnover,” he says. “Since 2021, base salaries in the financial services industry have increased far more than historical rates.”

For the second year, ESCP retained its position at the top of the FT rankings of “pre-experience courses” – for students with little or no prior professional work – while three other France-based schools were in the top four: HEC Paris, Skema and Essec. London Business School retained its top position among the few institutions offering a ‘post-experience’ course for those who already have sector experience, ahead of the University of Cambridge: Judge and the University of Amsterdam – Amsterdam Business School.

Among alumni from pre-experience courses who go on to work in finance, graduates who take up jobs in commerce had the highest average starting salary of $80,000, while those in the non-financial sectors earned the least, at $55,000. Three years after graduation, the top earners were those in private equity, venture capital and hedge funds, who earned an average of $120,000.

Since 2017, almost three-quarters of graduates from these courses have gone on to work in the financial sector, earning more each year than those who go into the non-financial sectors. The salary gap between graduates working in the financial and non-financial sectors has increased to $20,000, up from $6,000 in 2017.

The 2024 ranking was compiled based on data from business schools and alumni who completed their master’s degree in 2021. Participation by institutions is voluntary and the list is weighted based on factors such as salaries, gender balance and value for money.

The ranking data shows that there is still a significant majority of men, both as students and teachers. Only three of the 65 schools ranked had gender parity among teachers: IE in Spain, and Grenoble Ecole de Management and Iéseg in France. The share of women in the workforce at the Università della Svizzera Italiana in Switzerland was only 17 percent.

Among student cohorts, only the Toulouse School of Management and Skema Business School in France had gender parity, while on average just over a third of classes were made up of women. At the Lucerne School of Business in Switzerland, this figure was just 11 percent.

The strength of profit increases is one possible reason for the continued demand for finance masters, despite a broader stagnation in less specialized business and management education, particularly in Europe and North America.

The disruption of traditional finance jobs by artificial intelligence – with changes in both basic data entry and more advanced analytical work – has also led to a restructuring by recruiters and a likely shift in student interests.

At the same time, several business schools say employers are increasingly demanding so-called “soft” skills, such as teamwork, communication and critical thinking, in addition to “harder” quantitative skills, including coding and financial analysis.

Students are also interested in more hands-on, project-based ‘experiential’ learning with companies, pushing to learn about newer technologies such as cryptocurrencies, as well as ways to address sustainability and social impact.

The FT rankings take into account business schools’ sustainability approach through their campus commitments to achieve net zero emissions and the publication of audits for CO2 emissions. Here, SDA Bocconi/Università Bocconi in Italy performed best, followed by BI Norwegian Business School and IE in Spain.

At the ranked schools, alumni rated their strongest subjects as corporate finance, investments and statistics. Compliance received the lowest rating among the graduates.

North American courses were the most expensive per month on average, while those taught in mainland Europe were the cheapest – below the price for British and Asian schools.