CFA vs MBA for Investment Banking

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Even though CFA and MBA are technically similar in the field of work, the critical difference between CFA and MBA is the skills obtained. CFA focuses on increasing management skills such as portfolio strategy, investment analysis, etc, while MBA focuses on overall management skills such as operations, marketing, finance, etc.

Talking about investment banking, which career is best to apply for this position whether CFA or MBA. Since both are similar, you may be confused about what is the right choice for you to make between CFA and MBA. Okay, you can dive into our post to find out the information about it. Here you go!

CFA Vs MBA, Which Is Better for Investment Banking?

It’s slightly hard to determine which career between CFA and MBA is better for investment banking, since both have been tested for feasibility. Either CFA or MBA will be right for investment banking.

However, there is a gap which determines whether a CFA or MBA is better for investment banking. The gap here is regarding how reputable the school you attended is. According to some sources, an MBA degree will be marginally preferable over the CFA, as long as the candidate holds the business degree awarded by a top B-school.

In fact, completion of an MBA degree will give you direct access to investment banking jobs, since the major firms recruit on campuses. Of course, it will give you a good network of contacts.

The point is, if you are lucky enough to get into a top B-school, you can really afford it, and the MBA should help you get your foot in the door further. In fact, those benefits are not available with the CFA, which is mainly a self-study program.

On the other hand, a CFA charterholder is also eligible to apply for an investment banking position, since the CFA program has been a viable alternative to start a career in investment banking, not least due to its scarcity value.

Reportedly, total CFA charterholders across the world numbered just over 170,000, as of 2020. Otherwise, around 200,000 student graduates from U.S. business schools every year.

However, CFA certification is a solid credential for a lot of investment jobs. Sure, it will be worth considering if you are looking for entry level jobs in investment banking. So far, a CFA program will probably serve you better than an MBA program from any business school other than the top 20.

CFA Vs MBA, How Does Each Program Play a Role?

It is known that CFA charterholders are investment experts who have trained to be highly analytic. Several specialist skills provided by the CFA program are investment analysis, asset allocation and portfolio strategy. Of course, the CFA program has a narrower scope than the MBA program.

The time that will be required to earn a CFA charter is substantial, considered one of the most grueling tests. The CFA exam consists of three parts, each of which takes 6 hours to complete. Well, each section should be passed before moving onto the next. Some of the subjects in a CFA program include Ethics in Investment, Financial Reporting Analysis, Asset Management, Portfolio Management, Financial Strategy, etc.

Finally, earning the CFA designation will tend to be prolonged, even if a candidate passes every part in their first attempt and of course it is still at least a 19-month journey. The CFA Institute reported that the CFA candidates will spend an average of 300 hours of study for each section and that the average candidate will take four or five years to pass every section.

Talking about MBA, if a candidate graduated from a reputable school or institution, the value of a candidate to employers will increase, particularly demonstrating expertise, work ethic and ambition as well as a solid network.

The MBA degree actually opens doors in management roles at large companies in areas like investment banking, finance or consulting. Another fact proves that a focused MBA is also helpful if the goal is to switch between careers.

The time that is required to take an MBA program is approximately two years of full-time study and of course, has a high degree of variability. The students will get MBAs in specific fields (accounting, finance & economics, etc) and they still graduate with broad-based knowledge and also have a wider variety of opportunities open to them.

Furthermore, MBAs will get to be part of corporate visits, case studies, seminars, presentations and also many leisure activities. Some subjects you will learn in an MBA in Finance are Money and Banking, Financial Management, Global Financial Ethics, Financial Investment Strategies, etc.

CFA Vs MBA: Career Options

Knowing the career option while deciding between a CFA and an MBA In Finance is the most important factor you should consider. Of course, both programs actually offer benefits which can help you advance in your finance career.

Careful analysis of the job profiles in top finance roles will actually benefit in selecting the right course as your desired career prospect. Of course, it would be better for you to identify the most common career options that each program offers.

CFA is very beneficial and will be well-suited to investment careers. Here are some CFA careers you can apply for:

  • Investment Manager
  • Portfolio Manager
  • Investment Strategist
  • Consultant
  • Wealth Manager
  • Equity Research
  • FP&A Analyst
  • Investment Banker
  • Credit Analyst
  • Asset Manager

MBA graduates will have a chance to work beyond investment management such as human resources, strategy, consulting, etc. With your MBA credential, you can work in a variety of industries and some of the finance positions, including:

  • Chief Financial Officer
  • Financial Analyst
  • Private Equity
  • Cash Manager
  • Accounting Manager
  • Credit Manager
  • Investment Banker
  • Wealth Management Consultant

The point is, both the CFA and MBA are valuable. However, the CFA is sought-after by professional investors who are working as money managers and registered investment advisors. Each credential actually has their own advantages as well.

Traditional MBAs are broader than the CFA program that covers topics such as marketing, management and strategy. While, CFA program provides deeper coverage of investment management.

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