CFA® Charter vs MBA: Which Direction is Right for You?
It’s a popular question, and there is no shortage of opinions on the topic. But deciding between the CFA® Program and an MBA program is a very personal decision. As a finance professional, you would likely be very well served to pursue either. This comparison is not meant to call one out as a clear winner. There are a lot of variables that dictate which one might be the better option for you. And the truth is, many finance professionals choose to pursue both at some point in their career… although we wouldn’t recommend pursuing them both at the same time, at least while working a job as well.
This article is intended to look at particular characteristics of both paths and help you determine which is best for you, your lifestyle, and your career plans. Below, we’ve detailed a list of questions you’ll want to consider when deciding between the CFA Program and pursuing your MBA.
CFA Charter vs. MBA: What do you want to do when you finish?
This is perhaps the most important question to ask yourself when deciding between earning the CFA charter and earning an MBA. If you know you want to be a corporate financial analyst or portfolio manager, you would probably be best served by completing the CFA Program. It’s been said that the CFA exam is a foot wide and a mile deep. It won’t make you a stronger marketer. It won’t make you a better manager. It’s intensely-focused on one thing: making you an investment expert. You will come out of the CFA Program with a specialized skill set for asset management.
The MBA, on the other hand, is a broader approach. While the CFA Program is intensely focused, the MBA program is better defined as a mile wide and a foot deep. The skills you attain in business school are not focused on a single industry. Instead of intense focus on a particular skill set, you get some exposure to all facets of business operation. If you are still a little undecided about what industry you want to work in, and feel like you need more practical exposure to a variety of business practices, the MBA path is probably the better choice for you.
What About Earning a Masters of Science Degree in Financial Analysis?
Sometimes, candidates looking to pursue the CFA Charter also may pursue a Masters of Science Degree in Financial Analysis (MSFA). Certain graduate programs are aligned to the learning outcomes of the CFA Institute’s CFA Program, which allows for students to earn an MSFA while simultaneously preparing for the CFA exam. The College for Financial Planning's Masters of Science in Financial Analysis program includes access to Kaplan Schweser’s CFA Essential Study Package to prepare for the CFA exam.
CFA Charter vs. MBA: What are you willing to spend?
While your career plans should be the primary consideration, cost is often a factor when deciding between an MBA and the CFA charter. There are costs associated with both. The CFA charter is relatively affordable when compared to an MBA, especially if you’re planning to attend a well-known business school. All told, you can complete the CFA Program with premium exam prep materials for under $12,000. Business school tuition can cost $80,000 or more. That said, it really comes down to what you want to do with your career. You can’t put a price on job satisfaction.
CFA Charter vs. MBA: What are you qualified for?
To enroll in the CFA Program, you must meet one of CFA Institute’s qualifying criteria:
- Have a bachelor’s (or equivalent) degree
- Be in the final year of a bachelor’s degree program
- Have 4,000 hours of professional work experience, or
- Have a combination of professional work and university experience that totals at least 4,000 hours
Business school requirements vary from school-to-school. You’ll want to make sure you meet the specific requirements of the school or schools to which you want to apply. Generally speaking, each school will require that you:
- Have a bachelor’s degree
- Complete the GRE or GMAT exam with a satisfactory score
- Have professional work experience (varies by school)
- Complete additional program prerequisites (varies by school)
CFA Charter vs. MBA: What works for your schedule?
If you dedicate yourself to being a full-time student, you can complete your MBA program in two years or less. Technically, if everything went perfectly, you could complete the CFA Program in 18 months, not including the time you spent studying for the Level I exam. But that would be a very intense 18 months of studying. It’s recommended that you spend 300 hours studying for each level of the CFA exam, but you can take a year off in between levels if you need without jeopardizing your chance of completion or significantly adding to the cost. On average, successful candidates take four years to earn their CFA charter, according to CFA Institute.
Nearly all CFA charter candidates hold jobs while they prepare for and take the exams because they need to meet a work experience requirement before they can become a charterholder. The CFA exam is what it is…three levels, 300 hours each, and intense preparation. There is no shortcut. Whereas the option does exist to complete an MBA program part-time if you choose. It takes a little longer, but the option is available.
For the most part, completing the CFA Program is something you do on your own, while an MBA program is typically a more socially communal experience, with an emphasis on networking and team projects.
CFA Charter vs. MBA: How much do you hope to earn?
Financial compensation is obviously a factor in your decision to pursue further education. But it shouldn’t be the biggest factor in deciding between the CFA Program and an MBA. According to Business Insider, the median compensation for a CFA charterholder with 0–5 years of experience is $72,900. The median compensation for a business school graduate with 0–5 years of experience is $57,700. Business professionals with 0–5 years of experience who have completed both programs have a median salary of $87,200.
You are standing at a crossroads where countless others have stood. As you’re likely learning, there isn’t a single right or wrong choice that works for every individual. What you might see as a positive might be a negative to the next person in line. Consider all of the factors, make your decision with confidence, and don’t look back. Either way you go, you’re headed toward a brighter future in a finance career.
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