CFA vs MBA is a long-raging debate in the finance circle. Whether you are a student or a seasoned professional in finance at all levels, you must have heard of these two academic qualifications.
They are arguably the pinnacle of academic qualifications that can be attained by finance professionals and business managers.
By definition, they both serve as a means to tune up your finance and management skills. Determining which is of them is better is largely a personal decision, which would depend on your own long-term career goals.
This article is going to guide you towards making the right choice.
CFA vs MBA
Like everything in life, every individual has different opinions based on their own sentiments and strengths. Hence, there are people who argue for and against the two and with valid reasons on both ends of the spectrum.
Let’s see a brief introduction of the two qualifications:
What is CFA?
CFA stands for Chartered Financial Analyst. It is a post-graduate professional certification administered by CFA Institute, an America-based body. It was formerly known as the Association for Investment Management and Research (AIMR).
Who is Eligible for CFA?
CFA is offered globally to graduates of all disciplines. However, if you have not studied for a finance-related degree you may find it slightly difficult at the beginning. It is strongly advised that you brush up your skills in basic finance and mathematics in order to have a smooth ride.
Is CFA a Waste Of Time?
CFA is definitely not a waste of time. It offers world-class knowledge in a wide range of courses related to finance, thereby providing students with general knowledge of diverse areas of finance.
It includes courses such as Economics, Financial Analysis, Portfolio Management & Wealth Planning, Quantitative Methods, Derivatives and Equity Investments among others.
The CFA is regarded as one of the most rewarding qualifications a finance professional can earn as it bestows instant significant prestige among peers and most importantly, it can become a precursor to a highly lucrative career.
The average salary of a qualified Chartered Finance Analyst in Canada is $70,000 annually. So, if you have been thinking of creative ways to waste your time, this surely is not a bad one. Is it?
How long does it take to Complete CFA?
The program is divided into 3 different qualification levels. CFA Level 1, CFA Level 2, and CFA Level 3.
Can I Finish CFA in 2 years?
Finishing CFA in two years is possible if you are willing to put in the work. However, on average, it takes candidates three to four years to complete all 3 levels and become qualified Chartered Finance Analyst.
Who Employs CFA Charterholders in Canada?
Although Investment Banking & Management and Financial Accounting are by far the top two careers for CFA candidates, they are increasingly being hotly sought after across all sectors and industries all over the world.
Goldman Sachs, JP Morgan Chase, Royal Bank of Canada are currently among the highest employers of CFA charter holders globally.
How much does CFA Cost?
Registration and completion of all three levels of the CFA program cost about $3,800 USD ($4,800 CAD). If you register early, you can get a significant discount which can drive your bill down to about $3,200 ($4,020 CAD).
Is CFA harder than GMAT?
Although the CFA and GMAT are both numerate in nature, and they have a similar level of academic requirements to register candidates, it is however quite difficult to compare CFA to GMAT as they both test different skill sets. Also, the examinations are structured very differently.
However, based on general public opinion, CFA is significantly more difficult to pass and requires more hours of study than the GMAT.
As a matter of fact, in the last 10 years, only 9% of Candidates have passed all 3 CFA levels consecutively.
You even might be eligible for some waivers on your CFA Level 1 if you have excellent scores on GMAT. This indicates that GMAT can be a good way to prepare for your CFA exploits especially if you have not studied a numerate undergraduate course i.e. Accounting, Economics, Mathematics, Statistics, Business Studies etc.
What are the Requirements for CFA?
To register to take the CFA program you must satisfy the following requirements.
– A bachelor’s degree or be in final-year at the time of registration
– Pass all three levels of exams in the CFA curriculum
– Minimum of 3 years work experience acceptable to the CFA institute
– Become a CFA Institute member
What is an MBA?
MBA stands for Master of Business Administration.
It is a post-graduate degree program, equivalent to and Master’s degree (MSC). In addition to theoretical and academic knowledge of business, it also aims to provide practical, hands-on training for potential managers and team leaders in the business world.
The business world is multi-faceted and diverse. The knowledge of finance and investments in the money markets and capital markets alone are not sufficient to make an organization achieve its goals.
MBA is focused on teaching other key skills such as Business Law, Tax Law, Marketing, Applied Statistics, Business Strategy, Managerial Economics, Human Resource Management, and Entrepreneurship among others.
Who is Eligible for MBA?
To register for an MBA, you must have completed a bachelor’s degree or its equivalent, in any discipline.
Unlike CFA which is more or less an induction into a professional society, the MBA is a course offered only at an accredited University or College around the world.
Hence, to attain MBA, you have to apply to be admitted into a University of your choice to take the program.
How long does it take to get MBA?
It typically takes between 6 months to two years to attain a standard MBA.
How much does it cost to take an MBA program?
The cost of an MBA program varies all over the world, depending on the pedigree of the university that offers the program and the government policy towards education in the country.
MBA can cost between $0 to as high as $100,000 in some high-profile schools. Before selecting a school, quality of education, alumni societies and access to networking are some of the factors you should consider.
Who employs MBA Graduates?
Unlike the CFA which is heavily specialized and tailored towards the finance sector, MBA takes a bird’s eye view of the entire business management world instead.
It seeks to empower students with practical skills on how to manage, lead or direct a business regardless of what industry the business operates.
It teaches people how to apply human, physical and financial resources towards achieving the most efficient, viable, or profitable outcomes for the business that they manage.
Whereas the CFA prepares candidates for a stellar career in finance, the MBA arms students with key managerial skills need to direct a business.
How much do MBA Holders earn?
New MBA hires often earn an average of $80,000 annually.
Is CFA Equal to MBA?
CFA is largely limited to the finance niche. The knowledge level is significant but is highly focused and directed towards the finance sector alone.
In the academic hierarchy, the MBA effectively confers a Masters Degree on graduates and also provides them with the skills to become team leaders and managers in the business world, across all sectors and industries.
Hence, we can say the MBA takes the crown, especially for people who want to have the versatility of switching careers or owning and running their own businesses in the nearest future.
Is CFA useful to MBA?
CFA is definitely useful in your quest to attain MBA. The CFA curriculum contains so many courses which are also taking in the MBA. Having a CFA qualification gives a huge advantage towards having better grades and having a deeper understanding of some courses in the MBA curriculum.
CFA vs MBA Comparison
A brief comparison to help you choose.
| CFA | MBA | |
| Program Duration | 3 – 4 years | 1 – 2 years |
| Area of Specialization | Portfolio Management | Business Management |
| Average Cost | $2,540 to $5,040 USD | $50,000 – $180,000 |
| Career paths |
|
|
| Pass Mark | 50% | 85% |
| Career Benefit | Technical knowledge | Connections, Networking and Recruitment |
| Average Salary
(Depending on experience) | $60,000 – $100,000 CAD | $82,000 – $117,000 CAD |
| Exam Module | 3 Exams | Master Degree
(2-3 years) |
| Award of Completion | Professional Designation | Degree Certificate |
Conclusion
If you are a finance professional, and you see yourself pursuing a long-term career in finance, accounting, banking, investment management etc, CFA is your best bet.
However, if you are seeking a broader career path or a quicker route up the ladder to take up senior roles in the management of firms across different non-finance sectors, an MBA program will do you a world of good.
Verdict: How about both?
CFA gives you the necessary tools you require to understand how best to allocate money and other valuable assets to generate the highest level of returns. MBA will teach you the skills required, to build, run and grow any business organization. It will also give you access to a wider range of networks necessary for a successful business or career.
Having both the CFA and MBA puts you in good stead to rise to the highest echelons of management in any top Financial Institution.
What’s better than one professional qualification? – Two.
