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What are Some Career Opportunities for a Financial Engineer?

Some financial engineers work at the New York Stock Exchange.
Financial engineers typically work for financial services companies.
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  • Written By: Sheri Cyprus
  • Edited By: Sara Z. Potter
  • Last Modified Date: 31 August 2014
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A financial engineer works for financial services companies either in-house or as an outside consultant. Career opportunities in research, academic and industrial sectors may also be available to someone with this title. Education, knowledge, and experience in areas such as capital markets, financial technology, and computational finance allow many qualified financial engineers career opportunities in top financial services companies.

Financial markets join the buyers and sellers of financial products or securities. Financial products and securities are tradeable units of capital or wealth and the main focus of a financial engineer. He or she could be involved in buying and selling capital in person such as at the New York Stock Exchange (NYSE), or online such as through the National Association of Securities Dealers Automated Quotation (NASDAQ) or through other over-the-counter (OTC) markets.

The main career duties of someone in this position are to create wealth by trading the company's capital, create new financial products, conduct risk management and measurement, and manage investment portfolios. Financial engineering is the mathematical science of the laws of financial products and securities. A solid understanding of both applied mathematics and investment models is absolutely necessary for a financial engineer.

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The Black and Scholes Option Pricing Model is a common investment model run by a financial engineer and is a crucial part of modern financial theory. Fisher Black, Robert Merton, and Myron Scholes created the model in 1973 as a method of calculating fair prices for options such as a European call option. A European call option is a contract in which the buyer of the option can choose to buy, or not buy a financial product at the agreed on amount and price.

Career opportunities in computational finance require a strong working knowledge of quantitative finance and the ability to work with applied research. Career opportunities for a financial engineer in research are often available as real life anomalies contradict research and limitations in computational data continue to exist. Those seeking to work in capital markets may find a career as an in-house or outside investment consultant or portfolio manager. All types of investors usually require services that help manage their 401Ks.

A financial engineer seeking to work in the field of financial technology may find career opportunities in information technology (IT) as a web designer, network engineer, software engineer, or applications developer. Working with high performance databases in operational risk management and measurement is often part of a career in financial technology. Clearing and settling financial transactions is also often a part of a financial technology career.

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anon356957
Post 7

I come from Iran and I am studying financial engineering at MS, but I can't choose a good course for my thesis. It is very frustrating. Someone offered to read a dissertation of phd in financial engineering. I went to an online site and I saw the very dissertation, but I could not undrestand it from the abstract. Please, please help me. I really need it.

anon300680
Post 5

@lightning88: The University of Minnesota has a relatively new but strong MFM program. The big advantage is that the program was initially created out of local demand and funded by local companies.

Bear in mind that the finance industry in downtown Minneapolis is strong as growing and thus coming into this program, students are more likely to develop close relationship with industry practitioners and local corps. And that's a big advantage moving forward.

Also, the School of Engineering has an internationally well-recognized program, so that provides strong credentials to the vigorous course work. Besides all that, the tuition is relatively more affordable than more prestigious programs. Who doesn't want to go to big name school, but sorry we just don't have that much money and take out indefinite debts.

jonboy1982
Post 4

Lightning, Cornell has the best program for financial engineering. However, she will have to have to take the full engineering calculus series, two computer programming courses, two engineering statistics courses, differential equations, linear algebra and vector calculus before applying to about any FEng program. I am just now finishing my bachelors in corporate finance and beginning to take the extra classes. It will take me an extra year.

StreamFinder
Post 3

How's the market looking for financial engineer jobs in the UK? I recently got my MS in financial engineering, and am looking into starting my career.

Is the UK a good place to start a financial engineering career, or should I start somewhere else?

lightning88
Post 2

I have a friend who's looking into going back to school to become a financial engineer (she's working now as an accountant), so could somebody let me know if they know of any good financial engineering programs, or even just what to look for in a financial engineering school?

I think she's wanting to get her MS in financial engineering, so I don't really need to know about PhD financial engineering programs per se, but I'll take all the information I can get. Thanks so much!

pharmchick78
Post 1

Wow. Now this is the reason that I went for a pharmacist job instead of a Master's of Financial Engineering. This sounds crazy hard!

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