In May 2013,
Forbes ran an article: Should
You Get A CFA, MBA Or Both? Much of the information below is from that
article.
Additional
education after college has become a prerequisite for career advancement in
many investment fields. For those considering a career in investments, the
great debate has been whether to obtain a Master of Business Administration or
the CFA Institute’s Chartered Financial Analyst designation. Both have their
advantages but considering the expense of the former and the difficulty of
attaining the latter, choosing between the two makes for a rather difficult
decision.
[Note: MarquetteUniversity’s Applied Investment Management (AIM) program in 2006 was named as the
first undergraduate educational Program Partner of the CFA Institute. So for
the students who have become members of the AIM program, they have had the opportunity
to pursue the CFA designation immediately after graduating with their Bachelor
of Science finance major].
To attract
students, graduate institutions have begun to teach a large portion of the CFA
program within the graduate business curriculum and some have gone as far as to
create a “CFA track” within their MBA course of study, allowing students to
obtain an MBA and a CFA at the same time. For those considering attaining both
a graduate degree and the CFA certification, one of these programs is the most
efficient way to get the best of both worlds.
[As previously
noted, Marquette’s AIM program allows a select group of undergraduate finance
majors to get hands-on academic and financial analysis experience, including an
opportunity to actively manage domestic and international equity and
fixed-income portfolios].
MBA vs. CFA?
Before the
advent of the CFA, many investment companies would pay to send some of their
best and brightest to business schools. These students would return with a much
better general business skill, but not necessarily the skills needed for
high-level, specialized asset-management responsibilities, such as portfolio
management. These specialized skills were usually obtained on the job as
professionals worked their way up through the ranks.
To generalize,
the skills obtained in business school were better suited for employees in more
general disciplines, such as marketing or general management. The CFA program
was devised to provide charter holders with specialized skills, such as
investment analysis, portfolio strategy and asset allocation. One way to
explain the differences in the programs is to say that the MBA program is a
mile wide and a foot deep, while the CFA program is a foot wide and a mile
deep.
The advantage of
an MBA is that the knowledge obtained in the program is valuable in other
industries outside of the investment world. The great disadvantage is cost –
both the direct cost of the program and the loss of income that results from a
two-year hiatus for those considering going back to school full-time.
The advantages
of the CFA program are the ability to acquire specific investment related
skills at a relatively low cost. However, although the CFA program is based on
self study, it is arduous, requiring a commitment of four years and 1,000 study
hours (on average) to complete it. Because of the commitments both in time and
money, few go on to acquire both the graduate degree and the certification.
The CFA Track
For many willing
to make the commitment and meet the other prerequisites necessary to obtain a
graduate business degree and the CFA, most will begin the CFA program right
after graduation, hoping to use some of the knowledge gained in their finance
courses to give them a leg up over other CFA candidates. However, until
recently, most graduate business programs did not organize their finance
curricula for this purpose, the advantage for graduates was minimal. This is
changing, as business schools such as Marquette University have begun to
incorporate CFA course work into their undergraduate offerings.
According to the
CFA Institute, in July 2014 there were nearly 150 universities worldwide that
are CFA
Program Partners. These universities must provide at least 70% of CFA
course work as part of their curriculum. The CFA Institute audits the course offerings
of these partner institutions to ensure they live up to their promises. To
attract students, undergraduate and graduate institutions have begun to teach a
large portion of the CFA program within their graduate business curricula.
The curriculum
offered by these program partner schools range from specialized finance courses
aimed to facilitate the CFA exams, to a specific “CFA track,” which includes
courses that teach the exam material. The CFA track usually is designed so that
students will take Level I of the CFA exam directly after graduation.
The Bottom Line
Due to the
program partnerships between business schools and the CFA Institute, there is
now an efficient means for investment professionals to obtain both a graduate
business degree and a CFA – or even to focus on CFA as an undergraduate.
Whereas it used to be adequate to obtain one or the other, this trend and the
number of new investment professionals acquiring both graduate degrees and the
CFA may ultimately require professionals to obtain both. Where the commitment
was once two years of graduate school and four years of self study, now
candidates that choose a partnering institution can perform a majority of the
CFA commitment within their graduate school course work. Although it will still
require an immense amount of commitment and discipline, an increasing number of
institutions allow investment professionals to gain both breadth and depth of
knowledge for all the investment management disciplines.
Or a student could opt to pursue a CFA track as an undergraduate at Marquette University within their Applied Investment Management program.
