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Stop comparing the qualifications, says this chief investment officer.

CFA or MBA? They're completely different

As someone who has gone down the CFA® Charter and MBA paths, I wish that people would stop comparing the two. They are fundamentally different, but are both popular and helpful personal and career development steps.

A traditional MBA teaches students how companies work. The MBA will provide you with broad brush strokes on all the key departments and functions: management, accounting, finance, information technology, operations research, finance, strategy, and marketing, supplemented by the academic bases of economics and statistics needed to understand the basic intellectual tools behind some more specific functional applications.  MBA students have room for electives in things like investing, international finance, real estate, or more discrete topics like options, or higher level courses in any of the basic subjects.  For someone like me, who worked in finance before getting their MBAs, the education was incredibly valuable -- indeed 50X more valuable in my estimation than the relatively narrow CFA Charter, which I earned after the MBA, and after the CFP.

By comparison, the CFA Charter is a three-year baseline cram course in investment formulas and calculations.  It covers a lot of useful material, but because of the way the course is structured - as crammer with 20 topics at a time, very few people who take it ever retain much from it. 

Attaining the CFA Charter is also very stressful.  Anyone who asks me if I recommend taking the CFA exams always gets the opportunity cost speech about what else they might be doing with their time. - Is studying 300 hours per exam really the highest and best use of their time?  For many, the answer is "yes," the CFA Charter is perfectly worthwhile for them in their circumstances, but if anyone says, I am dithering between taking the less expensive CFA exams (before you NPV the $500 per year dues over your career) and the more expensive MBA, I usually lean towards the latter, so long as the school they are considering is more than a paper mill.

It's also worth noting that career-wise, I have held a few jobs where the MBA was a requirement, but none where the CFA Charter was more than a nice to have.

Eric Beyrich is an equity portfolio manager and co-chief Investment officer

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  • ta
    taxbuffettnotme
    16 September 2021

    No, the CFA and MBA are not the same. The CFA is geared toward specific jobs, such as portfolio management and equity and fixed income analysis. The MBA is primarily a management degree. Even if you concentrate or major in finance, the MBA is much more general. The CFA is also much harder to attain. Many hiring managers at investment firms consider the CFA the equivalent to an MBA from a top 20 school. I have both as well as a Ph.D. in finance. I got the CFA last and found it very useful when I decided to leave academia and get a job in the "real" world.

  • Ch
    Chris Forma
    16 September 2021

    I don't agree on all points. You don't just learn things in an MBA that you can also read about in a book - it's much more than that! It's also about how you deal with things - in practice. What I also don't like are these comparisons CFA vs. MBA, because they are completely different - in style and applicability.

    For me, the EMBA helped me to approach things with a different mindset and definitely helps me to better understand and master the topic of leadership!

  • Ca
    Carnivorus Plantus
    15 September 2021

    I don't agree. MBA is only worth the brand. You won't learn anything a book could not teach you, people there are mostly concerned about partying, and there is absolutely no challenge because once you've paid you know you will get the degree. So if you can go to a top school, do it, else, don't even think about it. The CFA will actually teach you something that you can use, but the brand is less strong (vs a TOP MBA I mean so if you can't get into top10, or maybe top15, don't even bother). So if you need a brand, go MBA. if you think you can do it based on your abilities, go CFA. Also, have a look at what you want to do: if you want to go management or pretty much anything about business, go straight to MBA, but if you want to do investment and stay there, go CFA. It is much narrower. And contrary to what the guy says, it really depends on your field and location, lots of jobs in investments ask for the CFA but hardly ever ask for the MBA. I suspect it depends on the country you are in: MBA is mostly US-UK.

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