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Which to Choose: CFA or MBA

I got a question via a comment to my Trading Jobs – Making the Transition from a Non-Trading Job post which I thought presents a good follow on to my recent Picking a Good Business School post.

What is your opinion on the CFA program? Is it any good?
Will it help land a job in trading or money management (hedge fund)?

The CFA is the Chartered Financial Analyst designation. It is comparable to a CPA in terms of it being a test based certification. There are three testing levels which must be passed to become a CFA. You can learn more about it at www.cfainstitute.org.

The CFA is primarily a professional money management (think mutual fund or pension fund) type of designation. I took the first level of the exam right out of undergraduate. It’s pretty intense and covers a number of different subjects. I opted not to carry on in pursuit of the certification, however, because I really had no plan on getting into money management.

These days, the CFA and MBA are virtually interchangable. In most job postings which list a CFA requirement you will find “or MBA”. There are a few exceptions, but the either/or is something I’ve seen in most listings.

That being the case, my general view is that an MBA will serve you better than a CFA. This is a simple case of it being a wider certification, applicable in many more areas than a CFA. Considering that most people change careers multiple times in their life these days, the MBA offers more job flexibility than does the CFA. There’s also the networking that you do through the grad school process which the CFA cannot really match.

If you’re thinking in terms of trading, neither one is going to help you much more than to provide high level background and theory. They are not practical trading programs.

That’s my two cents anyway.

By John

Author of The Essentials of Trading

3 replies on “Which to Choose: CFA or MBA”

In the world of money management, the CFA does carry more weight than a CPA. The CFA requires its holder to have a few years of experience under their belt.

As far as money certs go, the CFA is above and beyond the best of the best. No other designation is as recognized and important as the CFA. The CFP is second to it (most get a CFP if doing client-facing work).

The MBA will do more for you if you plan on doing work outside of money management. And most CFAs that move their way up the ranks also have an MBA. I suggest getting the MBA and then if you move into money management your company will likely help you get a CFA.