Should I Go CFA or MBA in Finance First?

One of the most debated topics for students in the finance sector is to choose between the CFA and MBA degrees.

Both these programs offer different types of benefits and limitations. CFA is cheaper and intensely inclined toward investment analysis and finance.

While MBA is a generalist degree with more career opportunities other than finance as well.

Let’s dive in to know more about these two programs and see which one is the right fit for you.

What is CFA?

CFA stands for chartered financial analysts and is a chartered designation awarded by the CFA Institute.

Students need at least 300 study hours per tier and a work experience requirement to earn the designation. It costs around $ 5,000 to complete three tiers 0r charter levels.

CFA is recognized by 30 countries around the world. Some other institutes may award a parallel degree as well.

CFA requires self-study but can be achieved through regular tuition at an accredited educational institute from the CFA institute as well.

The syllabus of the CFA is inclined toward finance, investment, portfolio management, and asset allocation heavily.

CFA exams are arranged a few times a year for each charter level. The students can earn the full designation with successful completion in a minimum of nineteen months.

Advantages of CFA

CFA designation is suitable for students looking for a career in investments and finance with some specialty.

The average salary of a CFA is around $95,000 per annum in most parts of the world. It also gives a chance to start at a managerial or higher position.

CFA costs are cheaper than MBA. Also, students can earn it through self-study saving more on tuition costs than MBA.

Students can get specific skills in finance and investments with a CFA course. Also, students can continue the course along with the job.

Disadvantages of CFA

CFA requires at least 1,000 study hours for its three levels. Also, students will need four years of relevant work experience to earn the designation.

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CFA members must pay for their membership and update their skill sets with the relevant courses and continuous work experience.

The CFA career path is inclined towards investment and finance sectors only. Unlike MBA, it does not offer a broader career spectrum to its members.

Another challenge with the CFA designation is the difficulty in passing the exam. CFA pass rate is roughly around 50% only.

What is an MBA?

MBA stands for Masters in Business Administration and it is a two-year degree program offered by business schools around the world.

Students require two years of full study and it costs around $ 100,000 in the prestigious business schools globally.

The MBA syllabus covers mostly the business management aspects in different fields including finance, accounting, human resources, and marketing.

Further, students can choose a specialization in a relevant field like information technology, healthcare, and financial advisory.

The MBA route leads to managerial and executive roles in finance, marketing, and human resources. The designation will earn you a place in these roles across multiple industries.

Advantages of MBA

The biggest advantage of an MBA is that it is considered a prestigious business degree globally. You can target the highest designations in a company with this qualification.

The average starting salary of an MBA is around $90,000 per annum which is at par with CFA. You can apply for a wide range of roles across multiple industries.

Having an MBA opens the doors to career opportunities other than finance as well. Students come with specific soft skills that are used widely across different roles in any industry.

In short, MBA is a widely recognized degree and offers more career opportunities than CFA.

Disadvantages of MBA

MBA is a costly qualification as compared to CFA. Also, you cannot earn it through self-study and you may forgo the job opportunity if you have one.

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Also, the broader spectrum of this qualification means graduates lack specialization. Unlike CFA, this degree does not hone skills specifically for specialized fields like investment analysis, asset management, and portfolio management.

It requires a two-year commitment and is not a suitable option if you already have a job. Moreover, earning an MBA degree also requires a prestigious badge from a top-class business school to make it worthy in the fiercely competitive business market.

CFA v MBA – Important Considerations

Choosing between CFA and MBA generally requires considering your current situation and future objectives.

Here are some key points to help you make the right decision.

Prerequisites

For an MBA degree you need:

  • A bachelor’s degree
  • Work experience in the relevant field
  • Combine the study hours and work hours to complete the degree

For a CFA degree you need:

  • A bachelor’s degree
  • Pass the GME or GMAT exam
  • Complete any prerequisites for specialization

Further, CFA members require continuous professional development and pay the membership fee as well.

While MBA does not require any membership fee or continuous educational requirement once completed.

Cost

The cost of completing an MBA degree is staggeringly higher compared to the CFA. The MBA degree is a full study program of two years while the CFA program can be completed through self-study.

However, it does not mean that CFA students do not require any tuition support. Despite that, the cost of CFA studies is significantly lower than MBA.

Learning Outcome

MBA covers broadly different segments of business studies including finance, marketing, accounting, and human resources.

It is a broader educational course despite offering specialization in the later part of the program.

CFA is more intense and specifically geared toward specialized fields of finance like asset management, investment appraisals, and portfolio management strategies.

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Skills Achieved

MBA students earn skills in various business management fields that can be applied across multiple fields like communication, HR management, IT, and taxation to name a few.

The CFA course offers skills related to finance and investment fields only. It does not offer a comprehensive skill set as compared to MBA.

Career Options

MBA offers a career path in business administration and management in various fields. Your specialization will further help you achieve a managerial or executive role in different business management fields.

The remuneration package of MBA graduates is also healthy.

If you are looking for a specialized finance or investment field, CFA is for you. It helps you grow a career as a broker, academic, risk analyst, investment analyst, and finance manager.

The remuneration package of a CFA is usually higher than MBA.

Time Required

MBA is a full-study program that requires at least two years. It’s a rarity to complete this program through self-study although some business schools have started offering online or distance learning programs recently.

The CFA program requires three charter levels to pass. If students pass all three levels on the first attempt, they complete it in nineteen months only.

Success Rate

The success rate of an MBA is higher and is around 90% around the world in the leading business schools.

On the other hand, CFA has a very low success rate of around 50% globally.

CFA v MBA – Final Thoughts

Some ambitious students pursue both degrees and some chose one of these two most sought-after degrees.

The final choice would largely depend on the cost, time, and career ambitions. If you want a cheaper but more credible degree, choose CFA.

If you want a prestigious degree that offers a wide range of career paths, choose MBA. Finally, if you have the resources and time, you can pursue both degrees as well.