CFA vs MBA: Which programme should you choose?

Are you a professional who is working in finance? When it comes to CFA vs. MBA, the answer as to which credential to pursue to climb the corporate finance ladder is not always an easy one. 

Both are popular and gruelling in their own right, but which should you choose to upskill and enhance your competitiveness in the job market? 

Here are some of the major differences between the two programmes:

What you’ll learn

An MBA programme equips you with management skills that can help you move across industries. It covers numerous topics, including core business concepts such as marketing, human resources, sales, business operations, and entrepreneurship, depending on your programme.

In comparison, the CFA is a specialised area of study that is finance-specific. It is a globally recognised credential that can set yourself apart from the competition in the financial industry. The programme will give deep knowledge in areas such as investment analysis, asset management, and corporate finance.

Duration

An MBA typically takes two years of full-time study while the CFA has three levels of curriculum, each with its own examination. 

You’ll need to pass the examination for all three levels to obtain the CFA charter. The average time it takes to complete the programme is four years, notes the CFA Institute.

CFA Institute notes that you’ll need to meet one of the following requirements to enrol in a CFA programme: have completed a bachelor’s programme or equivalent programme and have received a degree from the college or university; be a final-year student of a bachelor’s programme or equivalent programme on the date of enrolling for the Level I exam and becoming a candidate in CFA programme (you must complete your degree prior to the date of registering for Level II); or have a combination of four years (or 48 months) of full-time work experience and/or college/university education on the date of registering for the Level I exam.

Conversely, most MBA programmes typically require candidates to have some two to three years of work experience prior to enrolling.

Cost

The cost of an MBA programme depends on the business school you attend. Conservatively, you can expect to pay anything between US$60,000 to US$100,000 for a two-year programme. 

Conversely, CFA exams cost considerably less.

You’ll have multiple fees to pay for the CFA exam. There is a one-time enrollment fee of US$450 the first time you register for the Level I exam. The standard registration fee for each level of the exam is US$1,000. The early registration fee is US$700 while the late  registration fee is US$1,450.

If you register on time and at the standard rate, the total cost of taking each level of the CFA exam is US$3,450.

Mode of studying

You can expect to self-study for the CFA while how you study for your MBA varies depending on its delivery – either on-campus or online. According to CFA Institute, candidates spend an average of 300 hours preparing for the exam for each level.  

Career opportunities

An MBA is best suited to someone who is looking to have a broad understanding of the different parts of a business and a broad set of skills that are transferable to many industries. A CFA, on the other hand, is more suited to someone who wants a more in-depth, practical knowledge of finance.

Remuneration

The National Association of Colleges and Employers (NACE) salary survey – which contains annual salary projections for the Class of 2020 college graduates in the US – forecast that the average salary for this year’s MBA graduates stands at about US$79,043. 

This is more than US$20,000 higher than the projected salaries of business undergraduates at US$$57,939. The figure is higher for graduates from elite institutions.

Meanwhile, according to Payscale, the average CFA salary is US$92,689 in the US.

Which should you choose?

CFA vs MBA – this isn’t always an easy answer for many.

Ultimately, the programme you choose largely depends on your career goals. If your goal is to have a broad understanding of business, and you want the versatility of moving across industries, an MBA could be useful. On the other hand, if you want to further your career in finance, it may make sense to pursue a CFA instead. You could always pursue an MBA later.