Grudge Match: CFA® versus MBA – which is better?

I see this question all over the internet. While CFA versus MBA seems to be the most popular, it is followed closely by CFA versus virtually every other financial or business designation (CFP, CAIA, CPA, etcetera). I think sometimes candidates are so caught up with the question of which designation to pursue that they forget to actually study for any of them.

The answer, like so many things, is that it depends. Obviously, not too many charter holders are going to sell short the designation, so take the following for what it’s worth.

Two questions on topic CFA versus MBA:

There’s really two questions here, which designation is most appropriate and which should I pursue first.

If the last few years have proven anything, it is that learning is a lifelong process and anyone sitting on their a** with a designation earned decades ago risks becoming obsolete in today’s job market. While you may want to prioritize your continuing education, don’t think of it as a finish line but a continuous race.

The ‘which is better’ debate largely comes down to your career goals. The Chartered Financial Analyst designation is focused to analysis and management of investments. It is an analyst designation appropriate for those wanting to work in brokerage, banks, sell-side and buy-side shops, private equity and venture capital funds. The MBA is a generalized business designation for those wanting to work as management, regardless of industry. This is in contrast to the Certified Financial Planner designation which is focused almost exclusively to working as a financial advisor.

If you want to work as an advisor, you will probably want to pursue the CFP first, charter holders actually can get a pass on some of the CFP requirements but the designation seems more appropriate to the job. If you are more interested in a management position, then the MBA should be your priority. If you want to distinguish your academic credentials in the field of investment analysis and asset management, then the CFA is probably the better designation.

CFA versus MBA: What if you are interested in more than one area?

The decision may be blurred if you are interested in more than one area or want to pursue more than one designation. I would consider most of the designations (i.e. CFA, CFP, CPA, etc) as working designations because they include much of the day-to-day stuff you need for your job. Pursuing these during your first years on the job is going to help you become a professional in your specific field and there is something to be said for pursuing multiple designations as each brings something different to the table.

While many pursue their MBA right out of college (some even as a continuation of their undergraduate) it seems better to wait until you have some experience in the working world. I’m being a little hypocritical here, I attended night classes for my MBA while I worked my first job out of undergrad, but I always wished I had waited a couple of years. Learning about and addressing the issues in business management seems more practical once you have actually seen some of those issues arise in your working career.

With this, I would say pursue a working level designation (CFA) first then your MBA after a few years if you are looking for a career in management. Of course, if you don’t see yourself in management then continuing education in your particular field of analysis would be more appropriate.

Just remember: No amount of letters after your name will save you if you have not shown aptitude in your job and have proven yourself an asset to your employer. Pursue your continuing education but not at the expense of doing your job. A job candidate with a proven record of success will win out over some guy with an alphabet after his name any day of the week and twice on Sunday.

Joseph Hogue, CFA