CFA or MBA? Is CFA Better Than MBA?

1.2 CFA – Not the One for All

Despite being the most recognized qualification among Financial professionals, CFA is actually NOT required from every role in the industry. 

Let’s make it clear from the start: CFA might not be the right one for you, UNLESS you are sure about your career path within these Investment divisions:

• Portfolio management, 
• Asset management, 
• Wealth management,
• Equity Research, 
• And other financial roles relating directly to investing decisions.

This conclusion is based on the proportion of Job roles of CFA Charter-holders below:

However, the fact that you’ve probably seen yourself listed on this group is not necessarily equivalent to you taking the CFA exam right away. Let’s check on the MBA and the questions below, too, to ensure yourself 100%.

1.3 MBA – An Open Door

Every year, top Business schools welcome the most competitive future Business leaders from around the world, producing a batch of management talents coveted by a wide array of employers across industries. That is how the MBA degree has been polished year by year – too shining a professional medal that thousands of competitors aspire every year, with the hope to enhance their career.

Wharton, Harvard, Stanford, Oxford, Yale… – owning an MBA degree at these prestigious B-schools, and your professional path would likely be upended. You will be equipped with a solid grounding of Business and Management fundamentals, plus the skills to be an effective leader. One more thing unique to these B-schools is the support and learning opportunities from a robust alumni network. 

With that said, in terms of technical skills, MBA at its core is “A mile wide, and a foot deep”, especially when compared to CFA. If you are a Financial analyst considering the two qualifications, you might want to read on to the self-assessed questions below to make up your mind.

2. CFA vs MBA – “How Do You Picture Yourself Afterwards?”

2.1 The Answers that Scream “CFA”:

 

With that said, let me remind you: A CFA HELPS you get the job, not “GUARANTEES”. Even more important than this 3-letter qualification are: 

– your relevant experience, 

– your networking skills, 

– and your interview performance, in total. 

CFA proves your sufficient knowledge, but your experience and networking get you into the interview, and your performance would ultimately make their call.

2.2 The Answers that Scream “MBA”:

3. CFA vs MBA – “What is Your Working Style and How Much are You Willing to Commit?”

3.1 The Answer that Screams “CFA”:

“I’m a lone woof, I’m ready for intensive study hours.”

When it comes to CFA, there’s a legendary number: 300 – 300 hours of intensive exam preparation that eat up all your time besides your full-time job. 

You must be prepared for at least 1.5 years of pressured unbalanced work-study lifestyle, before deciding to embark on this challenging journey. 

You must picture yourself working with data and clients all day long, then get home, have a quick dinner, and sit tight to cram CFA materials until midnight. 

All the difficulties aside, if you are highly self-disciplined and motivated by tons of books, the CFA preparation process is fun in a particular way. 

You work hard, you get paid off. 

You don’t have to compete or prove yourself to any other along the way. 

You work hard, you pass the exam.

Other’s performances are not affecting yours anyway.

3.2 The Answer that Screams “MBA”:

“I want classroom interaction, and a more chill-out program.”

An MBA is the closest thing to going back to undergrad, but with highly-potential future leaders. Therefore, besides all the Business aspects the program covers, you’ll also get to build a quality network and absorb from great mindsets from all over the world. 

The course of work is not as intensive in terms of depth and study duration as for CFA. MBA students still have much time to socially interact, do leisure and community activities, take internships, and network their way to future interviews.

As much as you like classroom interaction, it’s a teamwork environment so your grades will depend a lot on group work performance and you will be assessed against your peers. Be prepared for that!

4. CFA vs MBA – A Look into ROI

4.1 CFA

Glancing through the costs it takes to become a CFA Charter-holder, it seems to be a bargain: A fairly low price, compared with its educational values as well as the weight the designation carries itself. 

Cost	Detail	Value
CFA Program Enrollment Fee	A one-time fee to enter the series of CFA exams	$450
CFA Exam Registration Fee	A fee charged on every exam you take, also covering eBook of the complete curriculum & mock tests	$650 – $1,380
CFA Institute Member Fees	Annual CFA membership fee once you passed 3 exams and your application is approved	$275
Study material costs	Test-prep materials from outside sources	$1,000
Opportunity cost	Work-life balance Other approaches to move up: focus on current job, networking with experts… Trials on different career tracks & roles	–

List of costs incurred

Doing a quick math and we’ll see the maximum costs incurred is roughly $6000, but with invaluable opportunity costs coming along.

In return, you will receive a highly-recognized qualification likely to boost your career status and salary. Here’s the average salary of CFA Charter-holders, for you to determine if it’s a worth-it investment:

Title	Income
Financial Analyst (corporate)	$80,930
Portfolio Manager (fixed income)	$253,250
Chief Investment Officer	$316,600
Portfolio Manager (equities)	$344,500

CFA yearly salary by job titles

4.2 MBA

MBA tuition fee is noticeably higher than the total cost of CFA, at averagely $120,000 for a 2-year program. That is yet to include room-and-board costs – the total could be as much as $100,000 a year, and it is increasing over time!

Not yet to mention the opportunity costs of the 2-year career pause, it’s a big number that drives applicants dizzy already. 

However, thousands of applicants still head to every top B-schools each year, hoping for a leap in career position and financial rewards afterwards would fairly compensate. 

Highest salary and bonus of MBA graduates 2019 (Source: USNews)

5. CFA vs MBA – A Conclusion

All in all, some basic factors we recommend you to consider when deciding for whether CFA or MBA are 1. Your career expectations, 2. Your commitment, 3. Your budget.

• If you’re into quantitative and Investment-related jobs – those like Asset management and Portfolio management for example – CFA is a to-go Charter for you, stating that you’re a qualified professional in the field of Investment. Mindful the 300 rigorous study hours, and approximately $5000 – $6000 you have to spend to get this approval stamp.

• If you want to acquire a wider area of knowledge, with more rounded sets of skills to support your position at other Wall Street jobs, go for an MBA. However, be noted that only MBA degrees from top 20-30 Business schools can guarantee you a position at tier-1 financial giants. Other than that, you’d probably land your job at tier-1.5 – tier-2 firms, such as in Boutique banks or small Investment firms. Averagely $200,000 of total fee, added up with the opportunity cost for 2 years off from work, would be a major factor for you to consider, in return for quality networks, and the school’s prestige that likely to get you up the career ladder.