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The foundation and future of finance (continued)

Andrew W. Lo, Charles E. and Susan T. Harris Professor of Finance

Another theme, it seems, is forward thinking. According to Andrew W. Lo, the Charles E. and Susan T. Harris Professor of Finance and the director of MIT’s Laboratory for Financial Engineering, the Finance Group was the first among the School’s faculty to propose a new curricular concentration within the MBA program, specifically for finance. Beginning in the early 1990s, the School offered concentrations in Financial Management and Financial Engineering for approximately 10 years. In 2008, the two-year Finance track was introduced, and is now chosen by approximately one-third of MBA candidates, all of whom receive a Certificate in Finance upon completion of required and elective courses—as well as extracurricular activities—specifically designed toward career paths in the financial industry.

The same is equally true for those who embark on the one-year, intensive Master of Finance (MFin) program, launched in 2009 to offer the specialized instruction required to train finance professionals in the public and private sectors. Among the most competitive offerings at MIT, the MFin was the first new degree to be approved by the Institute in some time, yielding over 1,400 applicants for the available 124 seats this year. As Lo noted, the program is “remarkable in its popularity and selectivity,” having doubled in size from its previous class of 73 students chosen from 974 applicants.

“MFin was actually something that was raised by the industry,” said Lo, who was named to TIME magazine’s “100 Most Influential People in the World” list in April 2012. “Our philosophy has been to focus on substance, not form; but over the years, we have received enormous feedback on needing more training” for those working in finance.

For Program Director Heidi Pickett, who has worked in the financial services industry for more than 20 years, the MFin program answers that call through the program’s core courses, combined with electives and hands-on, action learning practicums and proseminars. With a focus on imparting both technical skills and training for a successful career in finance, Pickett said what makes the program exceptional “is a strong core with the flexibility to tailor your degree to meet your needs and objectives.”

“When Andrew talked about this program, he said, ‘We need more, not fewer, people highly trained in finance,’” said Merton, who was, in part, drawn back to MIT by the new degree’s creation. “The MFin is designed to give a path in which we take recent graduates, and they go in and have this intensive, 12-month program.... They gain their experience, and their employers get a highly trained staff that has been taught by a very strong group of practitioners and teachers.”

New courses for the MFin program include Merton’s on Retirement Finance, Lifecycle Investing, and Asset Management and Applied Fixed Income Strategies with Saman Majd, SM ’79, PhD ’85, and Eric Rosenfeld, SB ’75, PhD ’80, among others. All students take part in a proseminar or practicum or both, which provide the opportunity to focus on issues of ethics and to build relationships with external partners while addressing a real-world problem faced by a financial firm in New York City or elsewhere.

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