Two of the most significant credentials for financial professionals are a Master of Business Administration (MBA) degree and a Chartered Financial Analyst (CFA). Traditional MBAs are broader than the CFA program, covering topics such as management, marketing, and strategy. The CFA program, on the other hand, provides deeper coverage of investment management.
Ultimately, the decision on which one to pursue depends on what one’s career goals in finance are. So, to quickly summarize the differences between the two, below we discuss both designations and their career options.
CFA vs. MBA: Which One is Best for You?
Traditionally, MBA programs offer a broad business curriculum, including financial and investment aspects, making it the conventional path for business management. On the other hand, the CFA designation curriculum focuses explicitly on investment analysis and portfolio management, providing deep knowledge of investment principles and ethics.
With that said, let’s get into more details on what each of them is and why you should get either of them—based on their purpose and what they offer.
Why get an MBA?
An MBA from a reputable institution may increase a candidate’s value to employers by demonstrating expertise, ambition, and work ethic, as well as a solid network. This degree opens doors in management roles at large companies in areas like finance, investment banking, or consulting. On another note, a focused MBA is also helpful if the goal is to switch between careers.
An MBA program takes approximately two years of full-time study and has a high degree of variability. Students can get MBAs in specific fields—with a concentration in finance & economics, accounting, etc.— and still graduate with broad-based knowledge and have a wider variety of opportunities open to them.
Moreover, they get to be part of corporate visits, seminars, case studies, presentations, and many leisure activities. Some of the subjects in an MBA in Finance are Financial Management, Money and Banking, Financial Investment Strategies, Global Financial Ethics, etc.
Why get a CFA designation?
CFA charterholders are investment experts who have trained to be extremely analytical. Investment analysis, portfolio strategy, and asset allocation are among the specialist skills provided by the CFA credential. It has a narrower scope than an MBA and is highly sought after by investment professionals.
The time required to earn a CFA is substantial, and it is considered one of the most grueling tests. The CFA exam is divided into three parts, each of which takes six hours to complete. Each section must be passed before moving on to the next. Some of the subjects in a CFA program are Financial Reporting Analysis, Ethics in Investment, Portfolio Management, Asset Management, Financial Strategy, etc.
Ultimately, getting the CFA designation tends to be prolonged—even if a candidate passes every part in their first attempt, it is still at least a 19-month journey. According to the CFA Institute, candidates spend an average of 300 hours of study for each section, and that the average candidate takes four or five years to pass every section.
Career Options: CFA vs. MBA Finance
This is the most critical factor that you should consider while deciding between an MBA in Finance and a CFA. Both programs offer benefits that can help you advance in your finance career. Careful analysis of the job profiles in top finance roles would be helpful in choosing the right course per your desired career prospect.
Nonetheless, let’s take a look at the most common career options each program offers.
CFA is particularly useful and well-suited to investment careers. Some careers include:
- Investment Manager
- Portfolio Manager
- Investment Strategist
- Wealth Manager
- Equity Research
- FP&A Analyst
- Investment Banker
- Credit Analyst
- Asset Manager
An MBA provides a diverse experience beyond investment management, such as consulting, strategy, human resources, etc. An MBA can take you into various industries, and some of the finance positions you can get with this credential include:
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- Chief Financial Officer
- Financial Analyst
- Private Equity
- Cash Manager
- Accounting Manager
- Credit Manager
- Investment Banker
- Wealth Management Consultant
At the end of the day, both the MBA and the CFA are valuable. The CFA, however, is widely sought-after by professional investors who work as money managers and registered investment advisors. Some very motivated individuals get both MBA and CFA credentials, giving them training in broad and more specific aspects of business, wealth, and portfolio management.