CFA vs MBA | Which is Better for Your Career?
CFA versus MBA, which one is the best choice for your career in business and finance? If you are wondering if a CFA or MBA is worth it, this should help. Let’s see which on you should get.
First, you need to take a step back and ask yourself why you are trying to get either of these designations. Are you looking at these because of company pressures or are you looking for a leg up on your next promotion? You also have to ask yourself what you actually want to do with your career. All of these things matter and play a big role in which certification you want to pursue because both of these are time consuming and expensive. You don’t want to get half way into something and figure out that it was the wrong choice, so these questions are important. Let’s take a look at the first question.
Difference between a CFA and MBA designation.
Most business and Wall Street professionals get to a point in their career where they need to start looking at company advancement otherwise they will get left in the dust or their company will simply faze them out and look for a more determined professional. Both of these credentials will help you move up in your company, but both of them are not equal.
The CFA charter is more of a financial and investment designation. If you pursue this, you will have plenty of knowledge, experience, and respect in the financial management and services industry, but it doesn’t go much beyond that. CFA charterholders typically don’t leave Wall Street because their analytical skills are best suited for investments. If you don’t see yourself as a portfolio manager, hedge fund manager, or something in the financial services industry down the road, you might want to look past this.
The MBA, on the other hand, is a much more broad credential. People who earn their master’s degree in business administration are trained in operations, management, accounting, and a number of other business related topics. This suits them for management and executive roles in companies across all industries. An MBA won’t teach you the investment and analytical skills that you will learn in a chartered financial analyst program, so if you want to stay in financial management, you should probably not get an MBA.
The next thing that you have to ask yourself is how long will it take to get a CFA and MBA and how much does it cost? Some people might want one of these certificates right now, but can’t stand the thought of going back to school for a few more years.
That’s the good thing about the CFA. You don’t have to go back to school if you have completed your minimum educational requirements. You simply have to take a set of three exams and complete the work experience component. This sounds easy, but that couldn’t be farther from the truth. It’s recommended that you study for 300 hours for each section. The CFA exam is extremely difficult and usually takes candidates several years to pass all three sections.
Conversely, an MBA requires you to go back to school, obviously. It’s a master’s degree program. Most master degrees in business administration require two years of college courses. This can be done at an accelerated rate, but most people choose to space it out by taking night classes and maintaining a job in their field. Once you’ve completely your college coursework, you are done. Not final certification exam!
If you are lucky enough to have your employer pay for your continuing education, you don’t have to worry about this. Unfortunately, most of us are that lucky and this can be a big concern to most.
Becoming a chartered financial analyst is much less expensive than getting a master’s degree. If you register early for the exam, it will only cost $1,000-$1,500 per level. Obviously, if you fail an exam, you will need to retake it. You will also need a set of study materials to help you prepare for the exam. We’ve reviewed all of the major companies that offer these courses, so check out our comparison chart if you think you want to sit for the CFA exam.
Going back to school to get your master’s degree is expensive. This can range anywhere from $80,000-$200,000 depending on where you attend school. Obviously, there are scholarships, work-study programs, and grants that can help with this cost, but you will definitely end up paying way more for this type of designation.
Career Paths Revisited
We all know these credentials aren’t easy to get, so let’s see the reward for earning them.
Like I mentioned earlier, a chartered financial analyst’s career is more narrowly focused in the financial services and investment industry. If you want to work as a portfolio manager or at a hedge fund, this is the right career path for you.
If you want to get outside of the tedious and analytical world of stocks, bonds, and investing, and get into running companies, then an MBA is probably the right career path for you. This will give you a much broader skill set and knowledge of business and finance from a managerial perspective.
Salary and Compensation
As far as compensation goes, both have their merits and opportunities. What’s interesting is that you aren’t limited to one. Look at the table below.
As you can see, people who have both are raking in the money.
MBA vs CFA, Which One is Better?
Well, neither is better. It’s more of a question about which one is right for you. Do you want a career in financial management, or do you want to a career in company management. That’s the question. It’s a matter of what you want to do with your life and your career. Both are good options. Remember, you can always be super ambitious and get both an MBA and CFA. 🙂
Think long and hard about where you want to take your life before you invest a lot of time and money.