Private Banking - CFA or MBA?

Let's add the CFP to the mix here.

Pros:

CFP-

What it is: Series of courses and a 10 hour exam certifying broad knowledge in insurance, investments, trust and estate planning, tax planning, retirement planning

Pros:

Easiest to earn and the most recognizable in PB. Clients widely recognize what it means and it means something to them. More importantly, outside professionals (CPA's and JD's) that can refer you business understand what it means and how you fit into the value stream. As a young person trying to build a book, the CFP can be an instant validator with older professionals who can refer you business.

Almost a requirement to succeed in the mass affluent market (think half million to a million dollars); still useful for larger clients.

Cons:

Little application outside of client facing private banking/pwm/financial planning/insurance roles. Very career specific.

CFA-

What it is: Extremely rigorous series of exams (3 in total) certifying a wide range of knowledge around pricing assets, building investment portfolios and analyzing financial statements.

Pros: Gold standard in the investment industry - can open a lot of interviews up in the future both in client facing and research roles. Almost a requirement for most research roles at reputable asset management firms. Clients and outside professionals don't typically understand quite what a CFA is, but they tend to know it is impressive. CFA society tends to be good networking in the industry. May help allow for some involvement with a firm's investment committees.

Cons: Difficult to earn - typical track is 4 years on average, very difficult to juggle while working full time. Low network value for building a book of business - less overlap with industry events involving JD's and accountants than the CFP.

MBA -

What it is: Duh.

Pros: Very strong network value for building a book 15-20 years out, as former classmates become potential clients. Good validation among clients and accountants/JDs. Strong branding for clients - there are clients who definitely prefer to see a top school on a bio. The best regional programs can also provide strong benefit (i.e. Georgetown in DC, McCombs in TX, etc). Can allow for opportunities outside of PB/PWM down the line and may help transition from mid level to senior level management if that is a goal.

Cons: Cost (~50x the cost of the CFP or CFA). Most top programs require a full time commitment (opportunity cost). No guarantee of finding a PB job post MBA.

Based on my experience, family wealth clients generally get most comfortable with private bankers/wealth managers who hold: Top MBA>CFP>CFA>>>Regional MBA

Meanwhile, institutional clients get most comfortable with: Top MBA>CFA>>>>>Regional MBA>>>CFP

Outside advisors get most comfortable with pb/pwm advisors who hold: Top MBA=CFP>CFA>Regional MBA (unless they're an alum, then move this up!)

The most beneficial for recruiting to another PB/PWM role: CFP=CFA=Top MBA>Regional MBA

The most beneficial to recruit for a different asset management role (mutual fund research, capital markets teams, etc): CFA (almost a requirement)>Top MBA>Regional MBA>>>>>>>>>>>CFP (useless)

The # of hours required for each: CFA: 1000-1200 (3-4 years at ~300/year) CFP: CFP swings way above its weight for value add if you are planning on managing money for families in the long run. A CFA/MBA combination is lethal managing money for institutions or recruiting for asset management; CFA/CFP or CFP/MBA go a long way credentializing to clients and advisors.