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CFA vs. MBA: Which qualification for which banking job?

CFA or MBA by sector

Sometimes, a CFA will make you stand out. Other times, it won't.

Do you really need a £70k MBA to boost your career prospects in finance? No. Then do you need to spend 300 hours studying for each three levels of the CFA Charter? No. But if you do, it may help.

Based upon the CVs uploaded by experienced candidates to eFinancialCareers 1.4m CV-strong database over the past year, we’d say neither qualification is mandatory. Either qualification can, however, benefit your career – depending upon the sector you’re working in.

As the chart below shows, experienced candidates with a CFA qualification (not necessarily the full CFA charter) account for the largest proportion in almost every sector. Only experienced private equity professionals are more likely to have an MBA than a CFA qualification – and even here, the difference is marginal.

In some sectors, however, CFA candidates outweigh MBA candidates by a greater margin than in others. In equities and asset management, for example, the proportion of experienced candidates with CFA passes outweigh MBAs by 2.5:1; in research, by 2.2:1, in hedge funds, by 2.1:1.

In IBD (investment banking division, including capital markets and M&A), the percentages of experienced candidates with CFA or MBA qualifications is roughly similar. Which may be galling to anyone who’s spent money on the more expensive MBA accolade.

There are also sectors in which neither a CFA nor an MBA is likely to make much difference: think risk, compliance and…trading. The latter may seem curious given the apparent penetration of the CFA exams in hedge funds, but we suspect hedge funds’ CFA-equipped employees are more likely to be found in support positions than in front-line trading and portfolio management roles.

Interestingly, the CFA Institute’s own research, shown in the chart at the bottom of this page, suggests plenty of people take the CFA to move out of asset management and into investment banking or private equity, or alternative investments (hedge funds). Our figures suggest they’re not necessarily assured of success. In private equity, at least, an MBA might have been a better bet.

The jobs CFA exam candidates are doing vs. the jobs CFA exam candidates want to do:

CFA or MBA by job

Source: CFA Program Candidate Survey

Photo credit: the gang by(matt) is licensed under CC BY 2.0.

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