Is a CFA Designation the Ticket for Banking Jobs?

An MBA degree is pretty much table stakes for an investment banking career. Yet, is it really the most valuable credential? By itself, probably not, or else it wouldn’t matter if you got it from an Ivy League school or a second-tier school — and it most assuredly does matter. No, if you’re looking to set yourself apart from other MBAs, or to bypass that overpriced, two-year grind entirely, there’s another TLA (three-letter acronym) you should consider: CFA.

Business Insider enumerates eleven reasons why the Chartered Financial Analyst designation is superior to the Master of Business Administration.

    1. It’s cheaper. And not by a little. For budget and planning purposes, compare a $100,000 MBA with a $5,000 CFA.
    2. You don’t have to quit your job. In fact, a lot of employers will do what they can to support your efforts because what you learn is immediately applicable.
    3. No application process. Just sit down and take the test. Presuming you studied, of course.
    4. No group work. CFA is perfect for the introvert, or for the otherwise gregarious student who just hates free-riding project teammates.
    5. No snobbery. There’s no such thing as a Harvard CFA. You can go to community college, or even drop out of high school, and still get this designation.
    6. Not everyone can get it. Even though the barriers to entry are low, you really have to know your stuff and you really have to display highly developed reasoning skills. Some would add, “unlike with an MBA.”
    7. It is Wall Street-specific. It tests how good an investment analyst you’re likely to be. No marketing, no management, no soft stuff.
    8. You’ll learn new stuff. MBA programs are filled with stuff you learned — or should have learned — in undergrad. Not so with CFA prep.
    9. It was founded by Benjamin Graham – the father of value investing. Never heard of him? Fine. Heard of Warren Buffett? Buffett heard of him, and so did his kid, Benjamin Graham Buffett.
    10. You can use it to move to the buy side. If you’re considering a move into private equity or hedge funds, a CFA could prove far more valuable.
    11. It gets you higher pay.┬áDidn’t think we’d miss this one, did you? As the table below illustrates, a CFA pays immediate and ongoing dividends.

Source: Payscale, via Business Insider

It’s also worth considering the relative scarcity of CFAs as compared to MBAs. Charterholders are currently lamenting the dilution of their brand, as there are now more than 100,000 CFAs in the world. They needn’t worry, though. B-schools pump out 100,000 MBAs every year.

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