Share
If you’re looking to level up your career in the banking or finance industry, sooner or later you’ll run into a big decision: should you pursue an MBA or CFA? Both credentials will supercharge your career prospects, but they open doors in different ways and require very different investments of time, money, and energy. Here’s how you can make a confident, thoughtful decision based on your career goals.
Who Should Get an MBA?
MBA (Master of Business Administration) programs are designed to give you a broad, leadership-oriented business education. While finance is a popular MBA concentration, the curriculum covers everything from strategy and marketing to operations and management.
MBAs are great for people who want to change careers or who want to break into finance from another industry. They’re geared towards professionals aiming for leadership, executive, or general management roles. MBA programs are also an excellent way to build up a strong professional network as you prepare for your career.
Of course, there are pros and cons involved with any MBA program. Some pros are you’ll develop a broad skillset that prepares you for multiple career paths, gain access to on-campus recruiting from top investment banks, consulting firms, and Fortune 500 companies, and as we mentioned, you’ll be sitting on a networking goldmine.
As far as cons are concerned, the most obvious is the high cost of MBA programs. Top programs can run $150,000+ in tuition alone. Along with this, if you’re in a full-time program and can’t work at the same time, it could be tough to get by depending on your circumstances.
Who Should Get a CFA?
The CFA (Chartered Financial Analyst) designation is a globally recognized credential for investment and finance professionals. It’s laser-focused on investment management, portfolio analysis, and ethics, and is widely regarded as one of the most rigorous certifications in the industry.
CFAs are best suited to investment-focused individuals who want to get into asset management, equity research, or portfolio management. They’re also great for professionals who want to level up their financial expertise and can often be obtained without having to leave the workforce, which means you can continue to earn a salary at the same time.
The pros of a CFA are that it’s way cheaper than an MBA, and typically costs between $3,000 and $5,000. A CFA is also highly respected in the investment world, and will open up many opportunities for you. As we mentioned, a CFA can also be earned while working full time, so you don’t have to wait to start working.
Kicking off the cons of a CFA is the difficulty. That’s right, the pass rates are around 40% for each of the three levels that are required to earn a CFA, making it one of the hardest exams in the world. You’d also be missing out on the wealth of networking opportunities associated with working towards an MBA. Lastly, a CFA is more narrowly focused, which might make it less useful if you want to make a career pivot.
MBA vs. CFA: Career Paths
There are plenty of career paths regardless of whether you decide to go with an MBA or a CFA. Here are some examples of common MBA career paths:
- Investment Banking Associate
- Corporate Finance Manager
- Strategy Consultant
- Private Equity Analyst
- Chief Financial Officer (CFO)
Next, here are some common CFA career paths:
- Portfolio Manager
- Equity or Credit Research Analyst
- Risk Manager
- Quantitative Analyst
- Chief Investment Officer (CIO)
If you see yourself in leadership roles that go beyond finance into strategy or operations, an MBA makes the most sense. On the other hand, if you’re committed to investment and markets as your long-term focus, the CFA might be the right choice for you.
Time Commitment and Cost vs. Return on Investment
A typical MBA program will take you about a year or two to complete if you go full-time, while part-time programs could take anywhere from three to five years or more. You’ll also be looking at $100,000 to $200,000 in tuition when all is said and done. Here, ROI often comes through higher starting salaries, faster promotions, and broader career options.
On the other hand, a CFA includes three levels of exams which usually take up to four years to complete and may require around 300+ hours of self-study per level. Keep in mind that this is often on top of a full-time job, so you’ll have to be particularly disciplined. The total cost of a CFA pales in comparison to an MBA at around $3,000 to $5,000, and ROI comes through access to specialized investment roles and higher credibility in financial circles.
The bottom line is MBAs are immersive and disruptive to your career for a short period, while CFAs are long, slow burns that require serious discipline over several years. It really depends on your career goals and what you’re willing to go through to achieve them.
Can You Do Both?
If you wanted to earn both a CFA and MBA, you certainly could. Most commonly, people will go for a CFA to gain expertise and will then later go after an MBA to expand their leadership opportunities. That being said, doing both is a major time and energy commitment, and it isn’t necessary for most career paths.
There’s no “right” answer when it comes to choosing between an MBA or CFA. What it really comes down to is which one is a better fit for your career goals. If you’re still unsure, consider speaking with people who are currently working in your target role, and ask which credential was most valuable to their success. At the end of the day, neither an MBA or CFA is a magic bullet—your work ethic, ability to adapt, and professional reputation are always what’s most important.
Rob Porter is an editor at Vault.
Share
