If you want a career in finance, it is important to understand the two most common degrees that candidates (generally) earn to get jobs in this industry: a Master’s of Business Administration (MBA with a specialty in finance, or a Chartered Financial Analyst (CFA) certification.
Both the MBA and the CFA are highly respected—and require a serious time commitment. They also prepare you for a variety of positions, from working as a financial advisor to managing corporate investment portfolios.
To decide between an MBA and a CFA, you need to identify what you want—both long- and short-term, in your education and in your career. Only then will you be able to accurately weigh pros and cons of each.
Let’s start by exploring the following questions:
Simply put, while both MBA and CFA programs are intense courses of study, MBAs tend to be more high touch and experiential. Furthermore, CFA programs develop strong but narrow expertise, while MBA programs offer broad training with the opportunity to specialize.
One of the main differences between a CFA and an MBA is the type of study involved.
A CFA is a focused self-study graduate level program. Coursework is divided into three areas, which correspond to three tiers of exams: Levels 1, 2, and 3. To become a certified CFA, students must pass all three exams. Test-takers report that these examinations are tough, and that the material is complex. In fact, it’s not unusual for aspiring CFAs to fail on their first attempt.
It takes 300 hours of self-study to complete CFA coursework. There are additional certification requirements as well, including several years of full-time work experience in the finance industry. All study, exams and licensure are overseen by the CFA Institute, the regulatory body for investment management professionals.
The MBA is a comprehensive and expansive degree. Students rotate through the foundational disciplines of business, which include operations management, human resources, marketing, and strategy. But for would-be MBAs who are interested in finance, it’s possible to specialize and develop expertise in that field. And if you do choose to earn your MBA with a specialty in finance, you will still develop strong skills as a generalist.
Depending on the format, MBAs are commonly pursued as a full-time, two-year classroom programs. At some business schools, however, students have the option of completing an accelerated degree in as few as 18 months.
Traditionally, business schools offer a dizzying array of learning experiences both within and outside of the classroom. These allow students to build their social and professional networks and develop strong leadership skills. Many MBAs report that their two years at business school were among the most formative and live-changing of their lives.
Increasingly, online study is a welcome option for earning an MBA. Some programs offer a hybrid approach in which students meet on a campus a few times a year, while others follow a synchronous course of study with live digital classrooms. The alternative to this is asynchronous, meaning that students self-study at their own pace with weekly deadlines and regular instructor feedback.
Most CFA programs do not offer the same student-life experiences as one might expect from an MBA program. Some students find that the relationship-building component of MBA programs pushes them towards that degree.
CFA study builds standout expertise in portfolio strategy, corporate finance, investment analysis, and asset allocation.
According to the CFA Institute, the most common jobs for CFA holders are:
As titles go, a CFA is an in-demand designation greatly respected by investment professionals. But it’s important to do your homework and learn whether this credential will be valued by your current or future employer. You might also consider whether you’ll need a CFA in order to advance your career.
The CFA credential does place graduates at the top of their game in the financial field. With such narrow expertise, however, there is limited career flexibility. While an MBA might enable a professional to easily pivot areas or industries, a CFA would not.
As a credential, a CFA provides less foundational learning but more specific and thorough financial training. There may be fewer options to diversify your career, but if finance is your passion and you intend to stay rooted in this industry, a CFA may be the best credential for you.
Depending on the school, one significant benefit of an MBA over a CFA may be the resulting alumni network. Whether an MBA is earned online or in-person, the alumni network will be a huge benefit and will offer excellent opportunities for professional growth.
There is no doubt that an MBA provides degree-holders with the flexibility to move from industry to industry and to function in diverse roles over the lifetime of their careers. For this reason, employers may favor MBAs for a wide range of roles.
There are major differences between an MBA and a CFA, both in terms of what you must do to earn the credential and in terms of the careers for which you will become qualified. Aspiring degree-holders often try to assess which option would be better, but “better" is not the correct yardstick by which to measure the value of a CFA or an MBA.
These degrees—and the careers that come with them—vary widely. The “better" path for you will be one that is based on your goals and interests, and experience you want to have while in school.
Although pundits occasionally debate the continued relevance of earning an MBA, there are some who critique the CFA as well. This is because earning a CFA takes a substantial investment of time and effort; it’s a credential that many find difficult to complete.
In the end, neither degree is a cakewalk, but both pay major dividends when it comes to career opportunities.