CFA vs MBA: 8 Points to Help You Decide

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This article is originally from 300Hours.com. You can read the full article here.

As we've covered the MBA subject briefly in a recent post and many readers wrote in for more, a natural follow up would be the classic question: CFA or MBA?

A very, very popular question among potential candidates compares the CFA charter to an MBA - which would be better? Like most comparisons, the answer is - it depends.
Firstly, it’s a very tricky thing to compare a CFA charter and an MBA - they’re fundamentally different creatures addressing different disciplines. However, at the same time there is a real need to evaluate these two qualifications side-by-side these days, as many up-and-comers looking to reinforce their CVs look to these two qualifications and are not clear about what each can offer to them and their careers. 

In trying to address this scenario, I will therefore critique both qualifications based on the benefits gained from a career perspective, and the costs involved. Always remember - the better qualification depends on your individual case. Read these points carefully and consider your own case before deciding which to pick (if at all).

#1. CFA: great for finance

The CFA is the qualification if you’re looking to build a successful careers in asset management, private wealth management, equity research or in ratings advisories in financial institutions. In these sectors an MBA will simply not be as valuable as a CFA charter. A CFA charter will also be an asset in all other financial services, as well as additional recognition even outside of financial services especially in Asia and Middle East & Africa.

#2. MBA: more widely recognised outside of finance
However, the MBA has the CFA beat in most industries outside finance. Acquiring advance financial analytical skills does not have the same pizazz as an MBA in non financial industries (say, advertising or manufacturing). If you’re unsure of what industry you’re planning on spending the rest of your career in, an MBA might be a good consideration.

#3. CFA: more time-efficient
The CFA holds an edge over an MBA in terms of time needed for preparation - although the CFA program demands an approximate minimum 300 hours worth of study per level, you can schedule these as you see fit. As the CFA study program is a distance-learning program, many candidates find it perfectly possible to squeeze in study preparation with a full-time position - hence you can continue accumulating work experience (not to mention continue earning) while studying for your qualification. The MBA on the other hand, will require a typical 2 year full-time commitment, which can be a significant opportunity cost and impact your work experience.

#4. But you can expect to earn an MBA sooner than a CFA charter
Hang on a second. Doesn’t this point directly contradict the previous paragraph? Not necessarily. The shortest time period you can hope to complete your CFA exams is 18 months. And that is only if you start in December for your Level I and pass all your exams on your first try (which happens to about 4% of candidates). 

The average time for a CFA candidate to completion is 4 years, which is 2 years longer than the average 2 years for an MBA. Another point to remember is that the CFA charter will also require 4 years of work experience.

#5. CFA charter costs less
The monetary cost for qualifying for the CFA depends on how many exams you need to get there and how much you spend on prep materials. Typically this adds up to about $2,500 to $8,500, but can go up to $15,000 if you spend like a drunk oil baron’s first-born every exam, and fail several times. 

This still pales in comparison to an MBA’s weighty $200,000 cost over the full term. Adding the opportunity cost of not working for a typical 2-year MBA makes the CFA qualification much, much more cost efficient however you slice it.

#6. CFA & MBA success rates are about equal
Some arguments on the CFA vs MBA thread sometimes point to the CFA pass rates. About 40% of CFA candidates pass each year, compounding to a very low total pass rate across 3 levels. Comparing this to 95% pass rates at Harvard, surely that’s one point for the b-school folks? 

Not necessarily - that argument assumes you already have been accepted to a top-tier school like Harvard. If you factor in acceptance rates into a mid/top tier school, the chances of an average person acquiring a CFA charter and graduating with a mid/top-tier MBA are about the same.

#7. Both have great alumni networks
Both the CFA Institute and typical business schools maintain thriving global networks that will be further enhance your career. However just like the studying process, I feel that to benefit from the CFA network from a career perspective, a CFA charterholder has to be more driven and proactive compared to an MBA graduate. It’s not a matter of alumni participation or events, it’s just that MBA events tend to be tuned towards a networking & business angle whereas CFA events can take on a more academic tone.

#8. Who says you have to choose? 
At the end of the day, there are many people who end up obtaining both a CFA charter and an MBA. If you’re hell-bent on making your CV the best damn piece of paper the world has ever seen, by all means take both - it’s in no way a either-or situation.

In the end, it’s all about your personal goals and situation. If you’re looking for a qualification to enhance your career in finance or establish your finance credentials, the CFA is the way to go. If you’re looking for a qualification to boost your career outside of finance, or looking to move across industries, an MBA might be a better bet.

Have you chosen one or the other? Or both? Share your thoughts with us here, or check out our other MBA article: Should You Consider CFA Partner B-Schools?

Comments (171)

Dec 14, 2012

Nice post.

Dec 14, 2012

Excellent for those trying to decide. Nice OP.

PE is the new black.

Dec 14, 2012

I actually started to study for the Lvl 1 2 years ago, and quit half way thru because I realized that it was just a piece of paper that would typecast me as a research analyst. I wouldn't recommend research to someone I hated, so I dropped my CFA dreams and decided to pursue an MBA. I think the problem with the CFA is that anyone can sign up for and take the test, regardless of personal and career achievements. There are plenty of unremarkable people with CFAs. It has been a while since I last looked at the numbers, but I think that a majority of the test takers are foreigners who are looking for a stepping stone to better jobs. Using similar logic, the top MBA programs would only take the highest GMAT scorers and not ask for things like resumes, transcripts, interviews, recommendations, or career goals. I think the screening process that goes into top MBA admissions produces a smaller, more diverse group of driven leaders who will be capable of running organizations in the future.

Think of it this way: How many CFAs would trade in their charter for a Harvard MBA? How many Harvard MBAs would trade in their degree for a CFA charter? I think we all know the answer to this question.

Dec 14, 2012
wannabeaballer:

I wouldn't recommend research to someone I hated

Haha, are you saying that you have no idea what bros in their 20s do at hedge funds, or that working at a hedge fund isn't worth doing?

Sep 24, 2018

Anyone can sign up and take the CFA, but very few pass it... the MBA is turning into a real joke now haha

Dec 14, 2012

Second WannaBeABaller's comments,

I took the plunge three years ago and tried L1 as well. There is a reason why a lot of people don't even show up to the test. For me, I realized two main points after studying many MANY hours. I reached my conclusion midway through a study session. Didn't even finish my second cup of coffee.

1.) Read the following quote very carefully.

"The CFA is the qualification if you're looking to build a successful careers in asset management, private wealth management, equity research or in ratings advisories in financial institutions."

When you get a CFA outside that sub-set, people are like, "Wow, you must be real smart". That's about it... I don't understand why the CFA is clinging to an industry(s) which will likely never see large headcount increase ever again, but that's another debate ( or thread, hint hint, 300 Hours).

2.) Work smarter, not harder

If numbers are your thing, go for it. Have fun. But I don't know too many people who love analyzing the difference between US GAAP and IFRS. If you're getting the CFA, just to get the CFA, just stop now, and figure out if the CFA aligns with your long-term goals.

At the end of the day, anyone can be a number cruncher. I noticed that the people who are in the CFA 'preferred' positions already have degrees from target schools. Which led me to believe, it's not what you know, but who you know. So I opted for the MBA.

Common man, everyone knows the U.S. meritocracy will only get you so far!

Dec 14, 2012
YellowRanger:

I took the plunge three years ago and tried L1 as well. There is a reason why a lot of people don't even show up to the test. For me, I realized two main points after studying many MANY hours. I reached my conclusion midway through a study session. Didn't even finish my second cup of coffee.

You needed two cups of coffee for a Level 1 study session? Level 1 is basically the equivalent of intro level undergrad courses in finance, accounting, economics, and statistics/probability. I think I'm starting to see now why you don't like "meritocracy", haha.

    • 1
Dec 14, 2012

LOLz, Did you study for the CFA?

If you can remember all those formulas, I raise my glass to you good sir.

Dec 14, 2012
300 Hours:

The shortest time period you can hope to complete your CFA exams is 18 months. And that is only if you start in December for your Level I and pass all your exams on your first try (which happens to about 4% of candidates)

Just wondering what the source is for this information? Empirically I find it difficult to believe.

Dec 14, 2012
duffmt6:
300 Hours:

The shortest time period you can hope to complete your CFA exams is 18 months. And that is only if you start in December for your Level I and pass all your exams on your first try (which happens to about 4% of candidates)

Just wondering what the source is for this information? Empirically I find it difficult to believe.

Pretty sure that it was meant to break it down like the following example:

December 2012 Level 1
June 2013 Level 2 (+6 Months)
June 2014 Level 3 (+12 Months)

If by some godsend you were able to pass Level 1 without studying, you can technically do things in 18 months minimum, no?

Dec 14, 2012
duffmt6:
300 Hours:

The shortest time period you can hope to complete your CFA exams is 18 months. And that is only if you start in December for your Level I and pass all your exams on your first try (which happens to about 4% of candidates)

Just wondering what the source is for this information? Empirically I find it difficult to believe.

I think he meant that 4% of candidates finish all the exams on the first try. Approximately equal to 35% x 35% x 35%, although those are a little lower than actual historical pass rates for each level. More like 8% using most recent pass rates.

Dec 14, 2012
Going Concern:
duffmt6:
300 Hours:

The shortest time period you can hope to complete your CFA exams is 18 months. And that is only if you start in December for your Level I and pass all your exams on your first try (which happens to about 4% of candidates)

Just wondering what the source is for this information? Empirically I find it difficult to believe.

I think he meant that 4% of candidates finish all the exams on the first try. Approximately equal to 35% x 35% x 35%, although those are a little lower than actual historical pass rates for each level. More like 8% using most recent pass rates.

That method ignores conditional probabilities. I would estimate the actual amount to be much higher than 8%.

Dec 14, 2012
duffmt6:
300 Hours:

The shortest time period you can hope to complete your CFA exams is 18 months. And that is only if you start in December for your Level I and pass all your exams on your first try (which happens to about 4% of candidates)

Just wondering what the source is for this information? Empirically I find it difficult to believe.

Empirically or anecdotally?

I passed the L2 exam but am going to worry about the GMAT in the near term. Will def do L3 at some point, came too far not to. Also, while it's not applicable outside of finance, it's helpful outside of the specific roles quoted earlier ITT. I've seen a surprising number of people in IBD with it, especially considering the rap it has on here, and I think it is looked at as an either/or for the CPA in many corp roles.

Dec 15, 2012

I'm assuming you're enquiring about the 4% number. This was inferred from official CFA numbers. The process is lengthy and has its assumptions, but the main reason for the empirical difference is probably because pass rates are also highly skewed by country.

Dec 15, 2012
300 Hours:

I'm assuming you're enquiring about the 4% number. This was inferred from official CFA numbers. The process is lengthy and has its assumptions, but the main reason for the empirical difference is probably because pass rates are also highly skewed by country.

Can you post your process here? I'd be interested in seeing it.

Dec 14, 2012

I've never heard a charter holder, or even a person who had passed at least level II, bash the program. Go figure that all of the whining comes from people who "attempted the level I exam." MBA, CFA, CPA are all extremely credible and should all be considered depending on where you are and where you want your career to go.

300 Hours your content is always great. keep it coming.

Dec 14, 2012

There are a flurry of holders who have said it was a waste of time of analystform.com. (not going to dig back and find the source.)

Quit Early and Quit Often:

http://www.wallstreetoasis.com/forums/harvard-busi...

Just because it's a hard path to take, doesn't make it the best.

Dec 14, 2012
YellowRanger:

Quit Early and Quit Often:

http://www.wallstreetoasis.com/forums/harvard-busi...

Just because it's a hard path to take, doesn't make it the best.

You know what's full of quitters? Rehab! Rehab is for quitters. You know how much fun they're having? Zero.

    • 1
Dec 14, 2012

I'm aiming for both. never stop self improvement

Best Response
Dec 14, 2012

I'm going to chime in with my personal experience;
I completed the entire CFA program by age 23,
Worked in a pension fund (which funds PE shops FYI if you don't know how the business works) and work in PE
As a side note I'm also applying to 5 top MBAs in exactly 20 days I have all my apps set and ready to go

Here's the thing with the CFA it is a wildly misunderstood creature, a lot of people say it's not applicable to different fields yet most of those people have not gotten through the first test.

The reality of the test is that it is in fact very applicable to ALL areas of finance given the broad knowledge base.
At least in private equity the CFA has allowed me to significantly outperform all of my peers, and has been responsible for me being able to get promoted many times not because of the charter but because of the tools that I obtained from it (after me the CFA has gained tons of value in my firm). Believe me when you can do mental valuation gymnastics while structuring and negotiating an acquisition its well worth the time.

In addition to all you PE fans out there, I don't know if you have realized this but PE shops are funded by pension funds, and understanding the intricacies of how they work is key to raising a fund. Especially when those pension funds are advised by CFAs who value and know the charter, know what I'm saying?

I personally sit in the board of 2 companies, and have used the skills I learned from the CFA to implement quite a few successful operating strategies. This is because the charter teaches you something quite important, (which is the key to investing) a value creation mindset.

Many people argue that it won't get you a job and that it's not a requisite for PE. What I say to that is that might have been the norm, but things change and I for one attribute tons of goodwill to any CFA that applies for a job because as I have been through it and know the discipline and determination required to complete the degree.

In the end, I completed the charter in my spare time while working full time, this is where I mostly agree with the OP. I have plenty of time to pursue an MBA they are by no means exclusive. It is best if one can complete the CFA early on as it will give you a good knowledge platform to build on during your career.

The thing is, I'm tired of hearing people (who have not completed the entire program) say the CFA is useless outside of asset management. If you failed level one and never completed the program its ignorant to say that the charter is useless for other fields. In my opinion you don't have a say unless you have completed the entire program, if you have done so and then believe its not worth it by all means feel free to trash it.

In the end, I believe the CFA go very nicely with my MBA (if I get in). Both have MAJOR merit and I fully respect both and believe that both aver very useful across many fields (not just asset management).

    • 6
Dec 14, 2012
suchislife:

I'm going to chime in with my personal experience;
I completed the entire CFA program by age 23,
Worked in a pension fund (which funds PE shops FYI if you don't know how the business works) and work in PE
As a side note I'm also applying to 5 top MBAs in exactly 20 days I have all my apps set and ready to go

Here's the thing with the CFA it is a wildly misunderstood creature, a lot of people say it's not applicable to different fields yet most of those people have not gotten through the first test.

The reality of the test is that it is in fact very applicable to ALL areas of finance given the broad knowledge base.
At least in private equity the CFA has allowed me to significantly outperform all of my peers, and has been responsible for me being able to get promoted many times not because of the charter but because of the tools that I obtained from it (after me the CFA has gained tons of value in my firm). Believe me when you can do mental valuation gymnastics while structuring and negotiating an acquisition its well worth the time.

In addition to all you PE fans out there, I don't know if you have realized this but PE shops are funded by pension funds, and understanding the intricacies of how they work is key to raising a fund. Especially when those pension funds are advised by CFAs who value and know the charter, know what I'm saying?

I personally sit in the board of 2 companies, and have used the skills I learned from the CFA to implement quite a few successful operating strategies. This is because the charter teaches you something quite important, (which is the key to investing) a value creation mindset.

Many people argue that it won't get you a job and that it's not a requisite for PE. What I say to that is that might have been the norm, but things change and I for one attribute tons of goodwill to any CFA that applies for a job because as I have been through it and know the discipline and determination required to complete the degree.

In the end, I completed the charter in my spare time while working full time, this is where I mostly agree with the OP. I have plenty of time to pursue an MBA they are by no means exclusive. It is best if one can complete the CFA early on as it will give you a good knowledge platform to build on during your career.

The thing is, I'm tired of hearing people (who have not completed the entire program) say the CFA is useless outside of asset management. If you failed level one and never completed the program its ignorant to say that the charter is useless for other fields. In my opinion you don't have a say unless you have completed the entire program, if you have done so and then believe its not worth it by all means feel free to trash it.

In the end, I believe the CFA go very nicely with my MBA (if I get in). Both have MAJOR merit and I fully respect both and believe that both aver very useful across many fields (not just asset management).

100% agree. particularly with value creation.

Dec 15, 2012
suchislife:

The thing is, I'm tired of hearing people (who have not completed the entire program) say the CFA is useless outside of asset management. If you failed level one and never completed the program its ignorant to say that the charter is useless for other fields. In my opinion you don't have a say unless you have completed the entire program, if you have done so and then believe its not worth it by all means feel free to trash it.

Great points and view.

Like any investment, I weighed the cost/benefit and realized I didn't want to see how far the rabbit hole went.

Sure, the CFA curriculum is applicable outside asset management in many cases. Technically speaking, it's incredibly well rounded. The skills are transferable in anything slightly finance related.

But what a tragedy, if you spent +900 hours just to find out it wasn't worth it. I spent plenty of time studying/researching where it would take me, and I'm not entitled an opinion?

You don't have to jump off a bridge to see it's not a good idea. ( *Not a good idea relative to my situation )

Dec 15, 2012
YellowRanger:
suchislife:

The thing is, I'm tired of hearing people (who have not completed the entire program) say the CFA is useless outside of asset management. If you failed level one and never completed the program its ignorant to say that the charter is useless for other fields. In my opinion you don't have a say unless you have completed the entire program, if you have done so and then believe its not worth it by all means feel free to trash it.

Great points and view.

Like any investment, I weighed the cost/benefit and realized I didn't want to see how far the rabbit hole went.

Sure, the CFA curriculum is applicable outside asset management in many cases. Technically speaking, it's incredibly well rounded. The skills are transferable in anything slightly finance related.

But what a tragedy, if you spent +900 hours just to find out it wasn't worth it. I spent plenty of time studying/researching where it would take me, and I'm not entitled an opinion?

You don't have to jump off a bridge to see it's not a good idea. ( *Not a good idea relative to my situation )

Yellow I understand what your saying, what I'm trying to get at is that level one is the tip of the iceberg its basically introductory ratios and theory. Its not until you go through level two that you start seeing the implementation of everything you've learned. Its hard to judge the exam if you just saw the tip because there is still so much left to see.

Its fine that you made your personal choice, I respect that, but giving advice to others without having fully gone through the experience is sort of misleading. One should let people who are considering the program make the choice for themselves, just like you did, and to do so they should talk to people who have actually gone through the entire experience. I'm sure there will be plenty of pros and cons; I analyzed those myself.

In my opinion taking the CFA is a very personal choice, people who undertake the endeavor should only do so because they want to; it is by no means an easy feat.

    • 1
Dec 14, 2012

Mostly really well made points, but I think comparing the CFA network to an MBA network is a big stretch, to put it kindly.

Dec 14, 2012

How about the CPA, is the designation valuable outside of public accounting? I have seen cases where professionals in finance have the CPA/MBA combo for F500, IBD, corporate/commercial banking, etc. I considered getting a CPA considering how bad the job market is, if I was ever let go I would be more marketable and could even pick one of those dreaded recession proof public accounting jobs worse case scenario.

Dec 19, 2012

Let's keep this in mind, not all CFAers are created equally..so let's put it this way:

Remember in college, within your finance major...

1. There was this rock star guru who read How to be a stock market genius at age 10 and started buying stocks by age 15? Now he's killing it at a HF
2. There was this average student who always did OK in his classes, ended up in a BB doing operations.
3. There was the hot girl who was better at business law and now does real estate valuation
4. There was the guy who never "got" finance and never understood the concept behind the Gordon Growth Model, but managed to graduate and now works in an insurance company doing accountancy.

All four has a BS in Finance from XXX University, but just have different skill sets and professional interests. CFA works the same way, what are your skill sets and professional interests, and how does the program supplement those ambitions?

Why bother debating over if the CFA will help you "get in x,y,z industry"? Just see it it for what it is, supplementary to your core professional ambitions.

Baby you're the perfect shape, baby you're the perfect weight. Treat me like my birthday, I want it this way and I want it that way. It makes a man feel good baby.

Dec 19, 2012

Long time lurker first time commenter. I've just been accepted into Rotman (University of Toronto) and completed level 3 CFA last June so I definitely went through this decision making process. I decided to do the MBA after losing out for a few jobs in the last round because of a candidate that "they just couldn't say no too" ended up getting the job instead, a godfather candidate if you will. With a CFA and an MBA (from a good school) I decided I could be that godfather candidate.

CFA will help you with your application process as it looks great in the package and shows that you have the ability to focus and study independently. It can also help you if you had some less than stellar undergrad marks (glug glug). The other thing about an MBA is that it offers you the recruitment benefits upon graduation, which is a great pipeline into whatever industry your looking for. CFA is great and does have events / job posting boards, but to be honest, they are not really exclusive and don't have a lot of top jobs (mostly research analyst stuff).

Bottom line, you can be fine with just a CFA, but if you have the time, money, and ability to do an MBA from a good school, it just puts you that much farther ahead than everyone else. Not just at entry level, but every time you apply for a job.

Dec 19, 2012

I don't know if this has been asked on the thread before, but how does the CFA look in terms of business school admissions? I mean it obviously can't hurt right? I'm looking to work in ER after I graduate, and I was wondering whether getting up to at least CFA level 2 could help boost my candidacy as a business school applicant? I can't imagine myself doing ER for more than 3 or 4 years without a small break. (okay I'll admit it, the real world sucks, I wanna be in college the rest of my life haha)

Dec 20, 2012
AQM:

I don't know if this has been asked on the thread before, but how does the CFA look in terms of business school admissions? I mean it obviously can't hurt right? I'm looking to work in ER after I graduate, and I was wondering whether getting up to at least CFA level 2 could help boost my candidacy as a business school applicant? I can't imagine myself doing ER for more than 3 or 4 years without a small break. (okay I'll admit it, the real world sucks, I wanna be in college the rest of my life haha)

I'm applying right now so I can't say for sure, from my understanding it helps a bit but not a lot given that the application is so holistic (I wish it mattered more), they say your work experience/GMAT matters more.

In any case, after I get my admission results I vow to come back with some more thorough feedback on this, as I'll have hard data on it.

Dec 23, 2012

Too much quals + not enought work = work shy.

Dec 26, 2012

The average time for a CFA candidate to completion is 4 years, which is 2 years longer than the average 2 years for an MBA. Another point to remember is that the CFA charter will also require 4 years of work experience.

Dec 26, 2012

I'm a Level 2 Candidate and halfway through a part-time MBA program (while working full time as a software developer for a buy side firm). My take is that the CFA curriculum is more broad than most people assume. Direct valuation techniques that are specifically pertinent to asset valuation account for a slight majority of the test content, but a good portion is also devoted to general subjects that are applicable to managment (like economics, quantitative methods, corporate finance, and financial reporting). And, although I'm not there yet, I'm told by Charterholders that the third test focuses very heavily on portfolio management alone.

I see the CFA program as a specialization of my MBA. While I am concentrating my MBA in finance, it just doesn't offer the same depth that the CFA program does.

    • 1
Dec 26, 2012

I have nothing against CFA, but CFA holders who write CFA on their business cards are no better to me than a bloody douche.

Mar 12, 2013

Hi guys, found this post really interesting - I have a quick question to help me make an urgent decision

I am in the process of applying for an MBA and have been accepted to a couple of leading programs, awaiting a couple more decisions as well. My short term goal is to get into asset management, buy-side (am currently a management consultant). I have an ACCA and a CFA 1.

I was wondering if I should do the CFA 2 by June this year - would a CFA 2 (as against a 1 ) be of any incremental value in gaining an internship during the MBA? Would appreciate your thoughts? If I see a strong incremental value, I am willing to cane myself into doing it in the 2.5 months to June.

Thanks

Mar 12, 2013
jonkil:

Hi guys, found this post really interesting - I have a quick question to help me make an urgent decision

I am in the process of applying for an MBA and have been accepted to a couple of leading programs, awaiting a couple more decisions as well. My short term goal is to get into asset management, buy-side (am currently a management consultant). I have an ACCA and a CFA 1.

I was wondering if I should do the CFA 2 by June this year - would a CFA 2 (as against a 1 ) be of any incremental value in gaining an internship during the MBA? Would appreciate your thoughts? If I see a strong incremental value, I am willing to cane myself into doing it in the 2.5 months to June.

Thanks

I would do it. AM is pretty competitive and I think it would be helpful, especially for a career switcher.

Oct 7, 2013

Excellent thread. I really appreciate suchislife comments, as they are applicable to my future goals.

Progress is impossible without change...

Oct 7, 2015

If I was coming from industry and interested in a Big 4 Corp Finance gig, would one pursue a CFA or MBA?

Oct 7, 2015

Depends on what kind of "financial analyst" you're talking about. You can be a financial analyst in IBD, in Asset Management, in PWM, in a Fortune 500 company, anywhere really...

I wouldn't necessarily say CFA is easier or harder than MBA. It's just something totally different. Getting into Harvard Business School and graduating with honors is certainly harder for most people than getting CFA, but on the other hand getting just some MBA from a tier 4 program is something anyone can do, while CFA is certainly not for everybody.

CFA will help you in pretty much any finance-related career, but keep in mind that it's mostly asset management that you'll be studying. So if you're planning on working in personal finance advisory, CFP is certainly better than CFA, but if you wanna work for a hedge fund/mutual fund/ any asset management really, than CFA is the way to go.

If you're saying that money is an issue for you, than certainly forget about MBA (at least for right now) and get a CFA instead. CFA is well worth the $2200 it will cost you. Also, it's okay to start working towards your CFA while you're a senior in college, while an MBA is most beneficial when you get it at least 2-3 years (if not more..) after you start working FT.

    • 1
Oct 7, 2015

Are you even allowed to take the CFA coming out of community college? CFA requires at least a bachelors degree or 4 years of work experience; I doubt that a community college associates degree would suffice.

Oct 7, 2015

You need your BA to register for level 2, not level 1.

Oct 7, 2015
Niblita75:

You need your BA to register for level 2, not level 1.

But I believe you have to be in the last year of completing the BA before you can sit for Level 1.

Oct 7, 2015

Can you enroll in MBA with a community college degree? I think you'll have to transfer and get a BA either way...

Oct 7, 2015

That is correct.

Oct 7, 2015

Wouldn't they consider an education that is the equivalent of a BA?

Oct 7, 2015

What's an equivalent? If you are getting an associates degree that's not an equivalent. I am pretty sure it states specifically BA.

Oct 7, 2015

My degree took 2400 hours to get in 2 years while a BA takes 1800 hours in 4 years.

Oct 7, 2015
Oct 7, 2015

You can try to make that argument to the CFA people but I doubt it'll work. What's your degree called if it's not a BA and it's not Associates?

Oct 7, 2015

I guess i've got no choice but to go for a BA, I just can't afford it right now.

Oct 7, 2015
stephvai:

I guess i've got no choice but to go for a BA, I just can't afford it right now.

I obviously don't know your situation but there are lots of ways to finance a decent education these days. Take out loans. Go to an in-sate school. Work while in school. Look for need-based schlorships. Try for an academic schlorship. Unless you have some serious commitment to pay-off other debt or bills, or you are responsible for taking care of other family members, there should be a way to finance an education.

Good luck.

Oct 7, 2015

Dude if you're really that poor then you can probably get good financial aid packages. I'm finishing up at a pretty good/expensive private school and me and most of my friends probably wouldn't be here if not for need based aid. If you already have an associates degree then a BA is just another 2 years, so even if you're taking out loans it won't be that bad.

Oct 7, 2015

of course thinking of portfolio manager eventually.

Oct 7, 2015

3

Oct 7, 2015

Mutual funds care about the CFA. You are much more likely to advance through the recruiting process if you have one that if you do not. That said, there isn't much of a recruiting process at most funds outside of the MBA programs. Sure they will do one-off interviews of good buyside/sellside analysts who are known to someone at the firm, but there is no established recruiting pipeline for experienced hires per se.

The best chance to get a look by the big long-only's is to go to a top MBA program and focus (almost exclusively) on recruiting for long-onlys. These firms will have summer internship programs and will come to the major campuses to recruit. If you're good, you should land at least a few second round interviews and from there it's up to you to convert the offer. I don't want to make this sound easy, it's not. But it's at least a viable avenue to get hired whereas I think a lot of folks have a idealized version of how they can "break in" to the industry that rarely works out in practice.

So yeah, my recommendation if you're 100% serious about moving to a mutual fund would be to do both. How far out of undergrad are you? Timing may dictate you have to get moving on b-school sooner rather than later, in which case you should at least aim to knock out one or two levels of CFA before you recruit.

    • 3
Oct 7, 2015

Thanks.
I'm VP and 33 yrs old .. working 7 yrs already.

Oct 7, 2015

It really depends on the mutual fund shop. Some of the higher end ones only recruit out of MBA or from IB/ER for their investment positions. Others value the CFA and put less emphasis on your prior work. And then others have a lineup full of people who did both MBA's and CFA's. A LinkedIn search or company website of a mutual fund could give more color here.

Oct 7, 2015

Although the CFA teaches you some important material, I think it's vastly overrated for those looking to use it to break into front-office finance role.

    • 1
Oct 7, 2015
mbavsmfin:

Although the CFA teaches you some important material, I think it's vastly overrated for those looking to use it to break into front-office finance role.

It's obviously better than Wharton though, which is on a huge decline.

Oct 7, 2015

To me I think it's pretty obvious that attending a T15 MBA would prove more beneficial than CFA. I think where the line gets blurred is PT MBA vs. CFA, T30 MBA vs. CFA, etc

Oct 7, 2015

Also a new auditor. Already started networking for TS. Ideally, Audit > TS/Performance Advisory > MBA > Consulting.

One tip I keep getting regarding Big 4 transitions is that MBA is the best way to reset. However, move into TS is important for MBA and often hard to get into. Consider leveraging contacts in other Big 4 firms asap. Also, make it very clear to your counselors/partners/manager/anyone who will listen that you want to end up in TS, and simply try to be a better auditor than your peers in the meantime.

Oct 7, 2015

@mbavsmfin , This is true, but what about people already in finance? MBA is vastly overrated in this scenario.

Oct 7, 2015

It depends. If you're in say trading and want to transition into investment management, you're not going to be able to make such a move without an MBA from a top school. If you're already in IM and are looking to move to perhaps a slightly different role or to a better firm, an MBA may not be as essential.

There are more and more people now with both a CFA and an MBA from a top school, so the CFA alone is not enough of a differentiating factor. It's become very oversaturated.

Oct 7, 2015

Far too broad a topic to generalize; as was mentioned above, it depends on what MBA you get and what kind of finance you want to do. However, I know several CPA's who've transitiioned their way into finance using the CFA--most of these folks ended up in valuation advisory, consulting, and in a couple instances, private equity. One also costs about 75x more money, so your financial situation is also relevant.

Oct 7, 2015

Absolutely, I think this website has provided tons of great information as far as getting great reviews/networking inside to transfer.. I'm thinking about ignoring the CPA and just start studying for GMAT early so I can try to get into a top tier MBA. I think for people like me who were naive enough to listen to accounting professors an MBA could be a great way to have the whole spectrum of finance opportunities opened up.

"You are neither right nor wrong because the crowd disagrees with you. You are right because your data and reasoning are right."

-Warren Buffett

Oct 7, 2015

CPA is far too narrow, and accounting sucks, to be frank.

A top MBA opens doors to opportunities that you did not even know existed. It makes available to you an entire spectrum of recruiters and jobs, not just your area of finance.

Oct 7, 2015

If you have the time to do CFA it will help open doors especially if your interest is in research. CFA designations are not as prevalent on private side but nearly everyone doing discretionary investing in public equities has a CFA.

Save the GMAT and MBA for another time. You will get more out of it 3-5+ years down the road so don't stress on the GMAT which is only valid for 5.

Oct 7, 2015
OpFin:

My goal is to stay in IB for 3 years and hope to move into PE as soon as possible. Preferably, I want to be a Research Equity Associate for the firm for as long as I can.

What? I don't understand what you're saying about your career goals. If you want to do IB for 3 years then move into PE, you should not, under any circumstances, waste time with the CFA. You'll need to go straight to PE from IB, or through business school (MBA). If you are saying that you want to be an equity research analyst (which is NOT private equity) then the CFA will make sense.

Oct 7, 2015

Something tells me that you don't under stand the difference between banking, pe, and equity research... Why are you so worried about planning your entire career today

Oct 7, 2015

Agree with the comments above. CFA if you want to do equity research but not if your doing IB or PE because no one cares about it there.

Oct 7, 2015

Hate to break it to you but if you're interning in IB this summer. There are no evenings free to do anything on any sort of regular basis.

Do your internship. Get a full time offer. Keep that offer and your friends's dad's offer in your back pocket. Then do full time recruiting and get more offers. Then pick the best one to maximize your chance at PE. Graduate and start IB. At the end of the first year you should be interviewing for PE. Take a god PE offer and get the fuk out of IB ASAP.

Not sure why you're considering the CFA if you want PE. Going straight for an MBA after undergrad is quite possibly the most useless experience ever. I know you don't understand how that can be the case. Just trust me....

Oct 7, 2015

The answer is neither, maybe take L1 during your senior year, but as other poster have pointed out there won't be any time if you're doing an IB internship.

Oct 7, 2015

depends.

Oct 7, 2015

why not both, they aren't mutually exclusive.

Oct 7, 2015

Good point, but if you had to choose...

Oct 7, 2015

If it were me, I would choose MBA only if it were a top 5 program.

If it wasn't a top five, then hands down a CFA

Oct 7, 2015

Get CFA while you're an analyst, get MBA later. If you already have MBA, I think there's less value-added to getting CFA as well.

Oct 7, 2015

It's difficult to complete your CFA as an analyst because of the experience you need, and you need 3 years to finish the exams (well 2.5 actually if you take L1 in Dec)

Oct 7, 2015
mp2437:

It's difficult to complete your CFA as an analyst because of the experience you need, and you need 3 years to finish the exams (well 2.5 actually if you take L1 in Dec)

Not true. you can take the exam if you have graduated from a 4 yr college or even in your senior year. see for yourself http://www.cfainstitute.org/cfaprog/requirements/
And its only 2 yrs from the day of your first exam if you are taking the exam in June and 1.5 if you are taking in Dec.

JUNE
Jun 07 L1
Jun 08 L2
Jun 09 L3

DECEMBER
Dec 07 L1
Jun 08 L2
Jun 09 L3

"They" say, in terms of the broad area of study and course depth, the CFA is an inch wide and a mile deep whereas the MBA is a mile wide and an inch deep. I think they are both vastly different and compliment each other. Taking the CFA as well should help, not hurt.

Oct 7, 2015

What level of experience do you need?

Oct 7, 2015

Nice post... thanks

Oct 7, 2015

If you want to do investment management, CFA.

Otherwise MBA

why not both while your at it?

Oct 7, 2015

As far as recruiting, MBA is better for i-banking. Though, in my experience, the CFA charter does help avoid some technical questions and give them some confidence in your ability/dedication.

Oct 7, 2015

CFA study ruins your life. 4 hours a night for 6 months for EACH level. Impossible to do as an analyst at an I-bank, if you're in the IBD division at least. All my mates at work take study for that shit, because they get a $15K annual salary boost when they get certified (plus it would make it much easier for them to seek other employment). That being said, I can't wait to get mine, post-analyst, post-MBA, because I want to invest money, and the CFA is the GOLD-STANDARD for investing money (disclaimer: not because it necessarily makes you better at investing money, but because people with money will trust you to invest their money).

I do disagree with Kreatif though. The CFA is not an inch wide and a mile deep, I'd say it's a mile wide and three feet deep. I don't know one money manager in the world that uses all of the concepts tested by the CFA, and most probably use 15-20%.

Oct 7, 2015
PoolSideBanker:

I do disagree with Kreatif though. The CFA is not an inch wide and a mile deep, I'd say it's a mile wide and three feet deep. I don't know one money manager in the world that uses all of the concepts tested by the CFA, and most probably use 15-20%.

Metaphors are not quantified =), they are meant to give a general impression. My intent was to illustrate the differences in cfa VERSUS mba. compared to a MBA, a CFA is much more focused on certain topics, and very very intense.

Oct 7, 2015

BTW, take the CFA level I as a senior if you can, like Kreatif said. Although many firms will pay for your CFA study and exams, it is expensive, and they are much more likely to hire you if you already have level I complete (this applies mostly to money management positions).

Oct 7, 2015

CFA in London, MBA in US

Oct 7, 2015
ratul:

CFA in London, MBA in US

Why CFA in London?

Oct 7, 2015

interesting. i guess he probably percieved london to be less mba dominated then the us and hence has arrived at that conclusion.

Oct 7, 2015
relinquo:

interesting. i guess he probably percieved london to be less mba dominated then the us and hence has arrived at that conclusion.

While it's true that more analysts get to promoted to Associate in London than in the US, the VAST majority of Associates hires are MBAs in London.

Oct 7, 2015

I'm am not in I-banking, but I'm currently studying for Level 2 of the CFA. I would imagine that it would be nearly impossible to have sufficient study time to complete the CFA as an analyst working 80-100+ hours a week.

Oct 7, 2015

What kinds of professions tend to take the CFA? It seems like i-banking people don't have time for it. Is it people who want to make the transition into the buy-side from another career, or people already in the buy side that just want to enhance their credibility?

Oct 7, 2015

The CFA has value only if you will either consistently use the knowledge, or if you judge it will open doors for you in your chosen field (IB maybe not as helpful, portfolio management much more so, for example). Personally, I don't feel that they're mutually exclusive and one can be had in lieu of the other. I also think you're taking a risk if you choose the CFA rather than an MBA, even from a non-top 10 institution, because the MBA value doesn't depend as much on your chosen field, necessarily. For example, remember that with your MBA, you are a student for two years, but an alum for life. That's one of the most valuable aspects of the MBA: the networking opportunities--and a strong network has value no matter what you do. But then again, you could be significantly handicapping yourself if you elect to pursue an MBA in lieu of a CFA and you're trying to break in to a field that strongly values the CFA.
So in summary, both are good to have, but which is more valuable depends heavily on your chosen field. If it's not too late, and you have an idea of what you want to do, talk to hiring professionals about what they want to see, and ask them this question...then you'll have a much better answer.

Oct 7, 2015

you are clearly going to have a skewed opinion because you have a cfa and are publicly broadcasting it...tsk tsk

I eat success for breakfast...with skim milk

Oct 7, 2015

Waste of a post

Oct 7, 2015

stop posting this crap. You did the same crap on analystforum

Oct 7, 2015
spaceagecowboy:

stop posting this crap. You did the same crap on analystforum

Get Em!!!

I eat success for breakfast...with skim milk

Oct 7, 2015

The primary consideration is whether the focus is on power of credentials VS the job you want and the credentials necessary to get it. Once that is clarified, there's little debate.

Oct 7, 2015

What UFO said.

This question will always be silly as it totally ignores the goals of one's career path and environment. The CFA/CAIA have both done wonders for my crappy undergrad performance but I've also seen many people with the same credentials doing fuckall in BO.

PS: thread seems like a website advert...

Oct 7, 2015

Comment deleted

Oct 7, 2015

It's all about connections.

lol @ degrees and designations.

Oct 7, 2015

This thread seems like it has an agenda. You want validation from your peers that your CFA was better than any MBA, don't you?

Gate_Crasher:

It's all about connections.

lol @ degrees and designations.

^Really, and what place of experience are you coming from with this? Because from your other posts it appears that you are still trying to get an offer?

Oct 7, 2015

^^^ or you gain connections through doing courses such as the CFA or completing an MBA.....mind blown!

Oct 7, 2015

Fight fight fight

I eat success for breakfast...with skim milk

Oct 7, 2015

If you want to get into banking, do not do an online MBA.

Oct 7, 2015
undefined:

If you want to get into banking, do not do an online MBA.

Why not? I went to the Harvard of Online Programs.

    • 1
Oct 7, 2015

What @cayo275 says, regardless of his second comment, is correct. If you want to get into banking, an online MBA is not going to get you in. Period.

And your best bet to get into banking right now is to go to a reputable MBA program

Let me put this into context - its very difficult to break into banking from a reputable MBA program as it is, so I'm not sure how an online MBA (whether Tier 1 or 2) is going to get you there. To be very blunt - its either a top tier regular MBA program or little/no chance of IB

Oct 7, 2015
undefined:

What @cayo275 says, regardless of his second comment, is correct. If you want to get into banking, an online MBA is not going to get you in. Period.

And your best bet to get into banking right now is to go to a reputable MBA program

Let me put this into context - its very difficult to break into banking from a reputable MBA program as it is, so I'm not sure how an online MBA (whether Tier 1 or 2) is going to get you there. To be very blunt - its either a top tier regular MBA program or little/no chance of IB

Thank you sir.

    • 1
Oct 7, 2015

Can I wear a tux to a BB interview?

    • 2
Oct 7, 2015

of course, you can wear whatever you want. No one is stopping you

Oct 7, 2015

Thank You.

  • Anonymous Monkey
  •  Oct 7, 2015

If you are an online kind of person you can get a degree in online resource sanitation advisory research.

Oct 7, 2015

MBA

KICKIN ASS AND TAKING NAMES

Oct 7, 2015

MBA and connections will get you interviews. If you had CFA level I on your resume for example, that might be the decisive factor between you and other equally suitable MBA's.

Oct 7, 2015

A top 10 MBA for sure. Let's say someone with no experience in investment management wants to break into that field. Good luck doing that with just a CFA. But if he was at a top school like wharton/booth/columbia, he can easily land interviews at top hedge funds and IM firms.

Oct 7, 2015

I would say if you want to get a cfa it could only help you. It could open more doors.

Oct 7, 2015

ER after business school not that simple, either. Much better chances with industry experience + CFA.

Oct 7, 2015

I agree with dacasale. If you are having difficulty breaking in to ER, it is definitely worth having that industry experience. ER seems much more open to the unconventional/non-mba path than other FO jobs, in my opinion.

Ever see a guy say good-bye to a shoe?

Oct 7, 2015

The CFA is better for your career going up equity research. Largely it's used for credibility reasons (banks want to brag that their researchers are certified, etc, distinguished from MBA's who really are all over place). MBA grads do go into equity research too...it's just that the CFA does more for your career in equity research than an MBA - which is a life experience and sucks up 2 years of time. The CFA doesn't actually make you a better equity researcher - you still gotta do your research, make DCF models, and write a report that communicates understanding of an industry. But since equity reports are sold to asset institutional managers...to communicate with them on the same level - the CFA will give you the background to do that where as MBA grads might not be a s familiar with lingo that asset managers might use. I mention some info related to this on my site, so check it out when you get a chance.

And should you go down the MBA route - check out GMATPill.com for your study aid.

Oct 7, 2015

please include the payback for any arguments for an MBA (approx $40-80k)

Oct 7, 2015

get your CFA while working. start now. if you're working in finance, it can only help/complement what you're working on a day-to-day basis. plus, if you decide to get your MBA later on (which you really can't start now without some work experience), it wouldn't hurt to have a CFA at that point during recruiting.

Oct 7, 2015

The credentials depend on the industry you want to enter. Banking will value an MBA more than a CFA. If you work at a hedge fund or Asset Management firm the CFA will be highly valued. Also, the cost of the CFA is often subsidized by the firm you work for. Also after the initial 2 years of private equity, many shops want you to get the MBA before you can advance a great deal more.

www.sharpeinvesting.com

Oct 7, 2015

It all depends on which area of investment banking you want to be in. S&T - you probably wouldn't need an MBA unless you were trying to move into the industry mid-career. If you start out in it out of undergrad, like the article from mark klein MD shows, it often makes no sense to go back to school as it is much easier to be promoted without it. The CFA is more applicable here as it would help if moving to a hedge fund or a portfolio management role.

IBD - it's generally needed to move past the analyst level (this applies to some PE shops as well from what I understand). CFA not quite as necessary unless one has interest in moving to hedge funds/portfolio management, in which case it would be helpful.

That in mind, realize that an MBA is a long term investment in yourself (as is becoming a CFA). While you'll have to forego a salary for two years, you generally do this with the thought that it will pay dividends in the future. Even in the article, one of the people admits their strategy is "short sighted". It's your call, but neither will ever hurt you in your career - only take up free time.

Oct 7, 2015

You cannot become a CFA.

Array

    • 1
Oct 7, 2015

If your goal is to stay in a financial advisory role or investment management role I would suggest that you pursue a CFA. If your goal is to switch careers I would suggest that you stick it out for one more year, get involved in leadership roles with local community organizations, and beginning thinking about business school applications.

Oct 7, 2015
Oct 7, 2015

As a CFA level 3 candidate I think the MBA is clearly superior in terms of content and value. But then again, consider how much a MBA costs explicitly + opportunity costs. CFA exams cost me like 2k-3k every year and lots of time.

Oct 7, 2015

I was relieved when I got to the last point, I thought they had forgotten to include the crazy parties...

Oct 7, 2015

floppity, doing the cfa was completely joyless and utterly painful, and I did not get any career benefits out of it. Most of my friends who did the cfa also feel the same way, and they are pretty much all planning on doing an MBA at a top school to make the transition they want.

Oct 7, 2015

Now that's a little unfair, yes it is joyless and painful but I think there are some career benefits.

Oct 7, 2015

I certainly don't view them as mutually exclusive. Studying for CFA has actually made me kind of want to do MBA even more. But I would want to be in an MBA curriculum that didn't just make me do a lot of the CFA curriculum all over again.

Oct 7, 2015
bengigi:

Now that's a little unfair, yes it is joyless and painful but I think there are some career benefits.

Totally agree, I mean you need to be in the right field for people to recognize the effore you put in but I think anything that shows that level of commitment and intelect is a career booster regardless of direct suitability.

"I am not sure who this 'Anonymous' person is - one thing is for certain, they have been one hell of a prolific writer" - Anonymous

Oct 7, 2015
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