Hi everybody!
In the "Education" link of today's www.guardian.co.uk, along with a
personal success story, there is this somewhat desillusioning article
(well, for physicists less than for mathematicians... :-P ).
Cheers
Guido Germano
Theoretical Physics, University of Bristol, England
http://www.phy.bris.ac.uk/staff/germano_g.html
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To see this story with its related links on the News Unlimited site,
go to http://www.newsunlimited.co.uk
Don't bank on a City job
A science PhD won't guarantee a post in investment,
but nor will a Masters in finance, warns Lee Elliot Major
Tuesday May 18 1999
The Guardian
Did you hear about that PhD graduate on a starting salary of #100,000 a
year? In cash-strapped university physics and maths departments across
the UK you can always find one academic who tells the story of a former
PhD student is now earning mega-bucks in the City. But a report
published last week does much to debunk the academic myth of the poor
science PhD turned into a rich City slicker.
Hundreds of PhD graduates are turned away by investment banks, and of
the 100 or so research students lucky to land jobs in the City
annually, about 50 later drop out, according to a survey by the Centre
for the Study of Financial Innovation.
For the top financial engineering jobs, the survey found banks prefer
to recruit PhDs in problem-solving sciences, such as physics, rather
than financial maths. And it uncovered mixed feelings in City
institutions towards the proliferation of Masters courses in
universities targeted specifically at would-be bankers.
Commissioned by the Engineering and Physical Sciences Research Council,
the report suggests universities could do far more to prepare postgrad
students for the City. It proposes internships for PhD students to
spend up to three months in the banking world, enabling them to sample
City life and allow banks to 'buy an option on a brain' (get an early
insight into a potential recruit).
It also calls for a detailed study into the growth of Masters courses
in financial maths and investment banking in universities, amid
concerns that it is being driven by demand from students, not City
bankers.
The job market for PhD physicists in the City has blossomed in recent
years as investment banks have turned to using numerical analysis to
model and predict financial markets. The introduction of derivative
markets, which thrive on the speculation not just of price movements in
shares, but the speed and size of movements, offer the ideal
application for PhD graduates (known imaginatively in the finance
business as 'rocket scientists'), with their expertise in probability
theory, partial differential equations, and computing techniques.
But the study revealed a serious lack of understanding between
financial and academic worlds. Bankers reported that they turn down
hundreds of applicants for financial engineering positions because of
an acute shortage of graduates with both 'problem solving attitude' and
communication skills. Even those selected have less than an even chance
of staying in jobs, which can command starting salaries of up to
#100,000 a year, including bonuses.
Investment banks also tend to favour PhD graduates from a small clique
of academic institutions - Oxbridge universities, Imperial College,
London, and the London School of Economics- 'virtually ignoring the
UK's considerable academic hinterland,' says the report. They also
prefer PhD students from the applied sciences, who will acquire
financial skills on the job, as opposed to graduates specifically
trained in financial maths.
Apart from internships for PhD students, the centre for the study of
financial innovation says more information about career openings in the
City for PhD students is needed in university science faculties,
particularly physics, engineering and chemistry.
While the job market for graduates with Masters in investment banking
was several times larger than that for PhDs - totalling up to 1,000
jobs a year - the study revealed that bankers were divided over the
usefulness of the degrees. The 20 or so courses run by universities aim
to prepare students for a broad range of positions in the finance
industry, in areas such as trading and IT.
Some City firms argued that the demand for such courses came from
students rather than banks, and that they stretched students too thinly
over the subject. Banks were interested in good brains rather than
accumulated knowledge, Other investment banks, though, welcomed the
courses for the general grounding in quantitative finance they
offered.
The report also delivers a disappointing message for academics
remaining in universities. Commissioned to advise the funding council
on possible future research programmes in financial engineering, it
concludes that 'the City is depressingly unenthusiastic about
university research'.
Quant and Mammon, by the Centre for the Study of Financial
Innovation.
For more information, email [log in to unmask]
Copyright Guardian Media Group plc.
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