AU
CFA vs MBA
15 May 2007
An article on our US site has created a furore over the relative merits of a CFA over an MBA. Here's the potted version.
According to the US commentators/ranters, here are the positives for both qualifications.
The plus points of an MBA
• An MBA is still exclusive: it works in its favour that the CFA has been devalued now that more and more people are taking it (including, allegedly, one child's violin teacher).
• The best i-banking and asset management jobs still go to graduates of the top 10 MBA schools.
• An MBA offers contacts and networking; a CFA offers all the networking opportunities of an after-work home study course.
• An MBA from a top 10 school is infinitely better than a CFA, but a CFA has the prestige of an MBA from a top 20 school.
• A good MBA is a bonus for career changers; a CFA is best for someone already in the industry.
• An MBA gives you a prestigious brand name to market yourself with.
The plus points of a CFA
• A CFA is more difficult than an MBA; it's also more relevant, and more comprehensive.
• A CFA teaches hard skills and tests you on them; by comparison, an MBA teaches soft skills.
• A CFA is an excellent route into asset management.
• A CFA is already mandatory for most senior equity analysts and is increasingly required for fixed income analysts.
• Each of the three CFA exams requires 250 hours of study in your own time. That shows true commitment.
• MBA courses offer an introduction to financial theory. The CFA provides the tools to develop creative solutions to complex financial problems – and a growing number of top MBA schools are including it in their curriculum.
Conclusion
It helps to have both – the MBA for strategy and networking and the CFA for financial analysis – but even then you won't be assured of career success (particularly if you plan to use the combination to get a leg up out of the back office).
Both courses are complementary.
An MBA gives you solid qualitative decision-making skills. The CFA gives you hardcore quantitative financial training.
Both qualifications have weaknesses.
The MBA does not dive deep enough into finance and budgeting. The CFA lacks a strategic element of the bigger picture beyond the finance department.
Don't forget, there are credible alternatives to the MBA and CFA. They include MSc Management and MSc Finance.
Always be sure to pick the most prestigious university brand you can afford. While MBA content, in my view, is broadly the same across most colleges in the developed world, the overwhelming perception among top-tier employers is that they want employees from top-tier academic institutions, regardless of what you study.
MBA & CFA Grad 21 May 2007
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