MBA VS CFA - MBAkarma

MBA vs CFA- what should a candidate choose? Here are answers to the frequently asked questions for those who are confused between the two courses.

What’s in the name?

Master of Business Administration, popularly known as MBA is a post graduate course in management, offered by thousands of business schools across the world.

Chartered Financial Analyst or the CFA Program is a professional credential offered by the American-based CFA Institute to investment and financial professionals.

Learning Objectives

As the name suggests, CFA focuses on Finance skills such as Investment Analysis, Portfolio Strategy, Asset Allocation and Corporate Finance.

On the other hand, an MBA focuses on all round business management skills in varied areas such as Marketing, Operations, Human Resources and even Finance. The only specialization that can loosely be compared to a CFA is MBA in Finance, although even that comparison is not apt, as both the courses provide different skills and immersion into the field of finance. You may read more on all available MBA specializations here.

Simply put, a CFA has more depth in learning finance and an MBA has more width in way subjects offered.

Eligibility Criteria

To become a CFA holder, candidates must have four years of work experience (or a combination of education and work experience as specified by the CFA Institute). However, individual level exams might need to be taken prior to satisfying this requirement. In addition, the candidates must complete the CFA program, become a member of the CFA Institute and adhere to the CFA Institute Code of Ethics and Standards of Professional Conduct.

Though the eligibility criteria for MBA admission can vary depending on the country and business school, some fundamentals remain same almost everywhere. An undergraduate degree and a qualifying examination such as GMAT or GRE is a requirement for admission to almost all MBA programs. In addition, the business schools may evaluate applicants on the quality if their work experience, written applications, recommendations and other such criteria. Some MBA programs cater to different audiences such as mid-level professionals, senior managers or even working executives and the eligibility criteria may change accordingly.

You can read here on how to get admission at top b-schools.

Interestingly, some business schools waive off the GMAT if the applicant is a CFA level three holder.

Always check the website of the specific business school you are interested in to know the exact eligibility criteria.

Duration

Completing a full time MBA usually takes between 12 months to 24 months. The exact duration varies as per the country and business school. Generally speaking, majority of the MBA programs in the US have duration of two years, while those in Europe range between twelve to eighteen months. Part time MBA programs may hold classes on the weekends and may take several years to complete. A CFA has three levels and completing it takes an average of four years to complete.

Mode of Study

Perhaps the biggest difference between the two programs is the mode of study.

The CFA is a self-study program that does not require candidates to take a break from work. A student might be required to dedicate ten to fifteen hours per week. It takes approximately three hundred hours of work to clear each level of CFA.

A full time MBA is a classroom based program that may require students to take a break from work. There are part-time MBA programs too, but even these will be heavily focused on classroom learning with peers and professors.

Job Prospects

Both courses are reputed in their specific industries. However, where you pursue an MBA from can make a great difference at least at the beginning of your career.

CFA holders can expect to get into Portfolio Management, Research Analysis, Risk Management or Financial Advisory.

Generally speaking, MBA graduates have a wider variety of roles open to them such as Consulting, Brand Management, Relationship Management and many more. For graduates in MBA Finance, a few roles may overlap with CFA holders. One need not have a financial background to pursue an MBA in Finance.

At the same time, a CFA may be a good credential to gain for MBA graduates, especially the ones who want to build a career in the field of finance. (Yes, many MBA Finance graduates do not end up building a career in hard-core finance)

For people who want to build a career in Finance the right statement may not be MBA vs CFA but MBA plus CFA.

The Cost

The CFA costs $500 to $2,000. The price of an MBA will widely vary based on the country and business school and can vary range from $30,000 to over $100,000 and more. However, there are schools that may offer part or full scholarships to exceptional candidates.

The opportunity cost must also be considered while going for a full time MBA.

Return on Investment

While many applicants want to know the long term return on investment (ROI) for both the programs, I will refrain from getting into this debate. ROI just compares salaries in isolation and does not judge the probability of success of a candidate. The two programs cannot be compared because of what they offer. Instead the ROI must be measured on in terms of what the candidate wants to do in the long run (AKA career goals). Plus CFA is a standard course, but an MBA is offered by many B schools ranging from great to mediocre to absolute trash. As mentioned earlier, where one studies can make a difference at least in the beginning of their career.

Many applicants pursue an MBA after having completed a CFA and many students undergo the CFA training after an MBA so there is no strict rule here. If your goals are clear, you will automatically know what program to choose. The ROI will be high if you choose the program that matches your goals, interests and skills.

Still have questions? Reach out to us on info@MBAkarma.com to get a free consultation on your career goals.