There comes a time in everyone's life when we face a choice between the two or many options that offer lucrative opportunities. But, as the saying goes "you can't have the cake and eat it too." Making a choice is indeed a difficult task and when it comes to choose educational degree that will shape your career, it needs to be more well-planned.
This choice is often encountered by the candidates who are on the trail to climb the financial career ladder in a bracket which is one side closed by Charted Financial Analyst (CFA) qualification and another side is closed by an attractive MBA in Finance degree. This bracket is so complex that without doing proper comparative analysis of both the qualifications and measuring the aptitude of the candidates, it is too tricky to be opened.
One usually embarks on an MBA career ladder to get into Investment Banking, but often lags behind in technical know-how of finance. While CFA prepares you to deal with the core financial issues; at the same time it leaves you huffy and puffy when it comes to doing the management of financial services.
Here how you should compare and decide between the two courses.
Cost and Earning Potential
If one were to compare the costs of doing the CFA and MBA, CFA is by far the cheapest option available to students. The approximate fee of doing this course is around 2 lakhs. There are two ways of doing this CFA in India. One is through CFA Institute US (also known as International CFA) and another can be pursued from ICFAI University (also known as Indian CFA).
The Charted Financial Analyst Degree is an internationally acclaimed degree with the starting average pay package, swings in the range of $60,000/- p.a. and $100,000/- p.a. in the U.S. The minimum educational qualification for CFA is a bachelor degree with at least 4 years of experience.
But presently there is a trend among various MBA graduates that they pursue this degree alongside their MBA, which strongly substantiate the value of this course.
But when it comes to doing MBA, it takes your lot of efforts to get into top B-schools and then invest around 15-20 lakhs to earn this degree. You can easily pay-off this amount in just one year while doing your job in some reputed company.
Scope of MBA in Finance vs. CFA
Someone already working in financial sector or want to move to some financial segment can opt for CFA course. This Course assists in areas like financial strategy, research analysis and asset management roles like private banking, financial advising, relationship management and portfolio management. And if you are switching over to some other country, this CFA course is still relevant as it is internationally recognized.
An MBA degree holds prominence not only in private business sector but also in govt. sector. People who specialize in Finance get to know about stock market analysis, global economy, futures and options, financial instruments, financial foundation, market trading, market volatility, bankruptcy, risk management and corporate finance.
To put it in a nut shell, an MBA-degree, with or without specialization in Finance works very well in the finance industry.
But it does not work in two areas namely, equity research and portfolio management. Except these two areas, an MBA degree works really very well with almost all financial sectors. Another plus point of holding an MBA degree is that it becomes very easy for those who are working in non-financial sector to move over to financial as recruiters highly appreciates and acknowledges its value.
While one does not need to leave his job to pursue this CFA course but for doing full time MBA one is required to fully devote two years of time to earn this degree which sometimes leaves learners in debt.
Though CFA is affordable but on an average it takes a candidate around 4 years to earn CFA. CFA exams have three sections which require you to put in six hours each. You must clear each section before marching to the next. The first section, Level I, is offered in December and June, while sections II and III are only offered in June.
If everything goes well as per the planned strategy then a candidate can clear his CFA in less than two years (minimum 19-20 months).
But it is not a cake-walk to clear this exam in less than two years as cautioned earlier that it takes on an average four years to clear this exam after putting in 300 hours of study for each section. And the passing percentage for each section is only 45-60% in a given year.
The general consensus is that CFA exam is too tough to pass and demands more study time. The CFA exam includes audit problems, and there is a general agreement that those with an accounting background have an upper hand in cracking this exam.
As discussed earlier when it comes to pursuing an MBA, then it can be completed in only two years but the cost of pursuing it runs into millions of rupees, though with a good passing percentage.
A candidate need to make sure that he is doing his MBA from an AICTE approved b-school with good reputation and track record in placements. There is no age criterion to pursue this program as candidates even after putting in eight to ten years of work experience go for this MBA degree.
The average age of a CFA program candidate is 29 years. Surprisingly as the current trend shows, younger students frequently enrolls themselves for the program in their last year of school or shortly thereafter. .
Even some business schools teach the CFA program within their MBA coursework, allowing students to both obtain a degree and embrace themselves for the certification simultaneously.
Both the courses are highly valuable. CFA, however, is mostly sought after by those professional investors who work as money managers and registered investment advisors during their initial years of job and training.
Remember, all these certifications give you an extra edge to make you more skilled and knowledgeable.
Above all, your experience and networking matter more than these certificate programs. It is just that if you have these certificates then you have better understanding than others and good chance to zoom past others in your career ladder.
Last but not the least, before jumping on to your decision to pursue any course never forget to measure your aptitude and requirements.
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