MBA Finance or CFA: Which Course To Choose After Graduation?
Last Update On 24th December 2024
Duration: 7 Mins Read
Usually, the students who are planning to pursue a career in finance are considering two main courses to choose from: MBA Finance vs. CFA. Both of these courses allow you to work as an expert in the field of finance. If you are feeling stuck with this decision, here are some insights about both of the courses that might help you make up your mind.
Which Is Better? MBA vs CFA
Chartered Financial Analyst (CFA)
The Chartered Financial Analyst course is offered by the CFA Institute and is considered to be the gold standard for finance professionals across the world. After CFA you will be able to work in several high-paying job profiles such as Investment Banker, Stockbroker, Hedge Fund Manager, and Portfolio Manager.
The core subjects taught during CFA are:
Financial Reporting Analysis
Ethics in Investment Portfolio Management
Asset Management
Financial Strategy
Eligibility:
Graduation. (Students in their final year can also appear.)
or
4 years of work experience in a relevant field
Course Structure:Â
CFA Level 1
CFA Level 2
CFA Level 3
Scope of CFA
After completing each level of CFA, you can expect your earning potential to increase along with the designation. Moreover, some of the most reputed investment companies in India, such as Motilal Oswal and BNP Paribas, are looking to hire CFAs for financial management positions. You may also be able to work in international companies like Blackstone, Morgan Stanley, Grant Thornton, and the Big 4 (KPMG, Deloitte, EY, and PwC).
Advantages of the CFA Program
A CFA designation is a specialised credential focused on investment management and financial analysis, administered by the CFA Institute. It is designed for professionals aspiring to pursue careers in asset management, portfolio analysis, equity research, and other finance-related roles. Key advantages of pursuing a CFA designation include:
Specialised Expertise: The CFA curriculum delves deep into topics such as investment analysis, portfolio management, financial markets, and ethics, providing specialised expertise highly valued in the finance industry.
Global Recognition: The CFA designation is globally recognised as the gold standard for investment professionals, enhancing credibility and marketability in the competitive finance job market.
Career Advancement: A CFA designation can accelerate career advancement in finance-related roles, opening doors to opportunities in investment banking, hedge funds, private equity, and institutional asset management.
Ethical Standards: CFA candidates are required to adhere to a strict code of ethics and professional conduct, emphasising integrity, transparency, and fiduciary responsibility in financial decision-making.
MBA in Finance
A Master’s in Business Administration (MBA) is a postgraduate degree that can be pursued to specialise in the field of finance. This course is offered by numerous colleges and universities across the country. After completing your MBA in Finance, if you come from a good college and have done well in your academics, you may be able to work in job profiles like Accounting Manager, Corporate Controller, Investment Banker, Manager Consultant, and Financial Analyst.
The core subjects taught in an MBA in Finance are:
Advanced Marketing
Financial Planning
Hedge Fund Management
Securities Analysis
Global Finance
Eligibility:Â
A bachelor’s degree (Engineering/B.Sc./BBA/BCom) from a recognised university with a 50% aggregate passing score
Course Structure:
Four semesters of approximately 4 months each
Scope of MBA
The scope of an MBA largely depends on what college you pursue your MBA from. An MBA is only of value when earned from one of the best colleges in your country. Most of these colleges require you to clear an entrance exam. These exams usually have a high cutoff, and if you are unable to meet that score, your chances of getting admission are slim.
So if you have faith in your academic skills and can gain admission, then an MBA in Finance course will open you up to a myriad of opportunities. You will be able to work for some of the biggest companies in the world and earn a hearty compensation package. With a great academic record and CV, you will get numerous opportunities to work in India and abroad.
Advantages of the MBA Program:
An MBA is a versatile degree that provides a broad foundation in business administration, encompassing areas such as finance, marketing, operations, strategy, and leadership. This helps students acquire a strong grasp of the principles of business management and leadership skills. Some of the benefits of an MBA are:
Diverse Skill Set: An MBA curriculum encompasses the entire extent of business disciplines, thereby equipping the graduate with versatile skills and knowledge that can be applied across diverse industries and functions.
Network Opportunities: MBA training provides thorough networking opportunities via interaction among classmates, alumni, and industry professionals as a basis to advance one’s career and eventually find employment.
Career Flexibility: Due to its scope, an MBA opens avenues to several careers ranging from corporate management to consulting and entrepreneurship.
Leadership Development: Most MBA programs stress leadership development, allowing students to engage in hands-on learning, teamwork, and executive mentorship.
Choosing Between the CFA Program and the MBA Degree  Â
The MBA program broadly covers business administration with accountancy, economics, finance, marketing, operations, and strategy. It is most commonly taken for two years as a program and often involves undertaking an internship or a consulting project, but in the case of a CFA program, it focuses more on investment management. Investment management involves different courses that are focused on equity, fixed-income investments, alternative investments, and topics related to ethics and professional standards in practice. The duration to complete the CFA program is three to four years. Candidates have to clear three exams one after another.
The most important decision a business and finance career aspirant must make is choosing between an MBA and a CFA designation. Each one has its own set of benefits and goes along with different career paths, so it becomes important to consider what your professional goals, interests, and skills are before making a decision.
The table below showcases the differences between MBA in Finance and CFA:
Differentiators |
MBA in Finance |
|
Type of Course |
Master’s Degree | Professional Course |
Duration |
2 years | 3 years |
Eligibility |
Graduation | Graduation |
Recognition |
MBA from the top colleges like IIM Ahmedabad, Bangalore and Calcutta are globally recognized, but the rest hardly have recognition or scope outside India. |
CFA is a genuinely global certification. The top 5 countries where a CFA charter can take you are the US, India, Canada, and the UK. |
Average Salary |
INR 7 to 9 lpa |
INR 6 to 8 lpa |
Salary of CFA vs. MBA
Since an MBA is a master’s degree and falls under business management in the field of finance, the scope and number of opportunities available to MBA graduates are far more than CFA. However, it is important to note that the most desirable opportunities after an MBA will only be available to those from some of India’s top colleges or tier-1 universities. So if you are someone who has a stellar academic record and can crack the entrance exams to one of these colleges, the sky’s the limit for you. A graduate from some of the top IIMs can claim a package of anywhere between INR 20-25 LPA, whereas someone from the newly established IIMs can get that between INR 10 to 20 LPA.
In the case of Chartered Financial Analyst, not only can anyone enrol for CFA, but based on your CFA scores and your academics, you can expect significant growth in your career in finance after CFA, which might not be possible after an MBA from a tier-2 or tier-3 college in India. After completing each level of CFA, you can expect a hike in the average salary that you can get at some of the companies. The salary of a CFA Level 1-cleared candidate can be between INR 4–5.4 LPA, which after CFA Level 2 might be INR 6 LPA, and after Level 3 will come up to INR 18+ LPA.
MBA vs. CFA Career Paths
A Master of Business Administration (MBA) can be beneficial for a career in finance. An MBA offers several career paths that lead to management consulting, corporate finance, investment banking, entrepreneurship, and general management. It can be a good degree for one to take if he or she intends to change careers or go into a different field of specialisation.
The CFA curriculum embraces broad topics in financial analysis that include equity analysis, fixed-income analysis, derivatives, and alternative investments. These skills find relevance in investment banking for various roles, including performing financial due diligence, valuing companies, and structuring deals.
MBA vs. CFA Curriculum:
MBA tuition fees in India vary widely depending on the institution and program format. Tuition for top-tier MBA programs at prestigious Indian universities can range from several lakhs to over 20 lakhs for the entire program. The registration fee for the CFA Program is approximately $350, paid in the INR equivalent. The examination fee for each level of the CFA Programme is around $990 for Level I, $990 for Level II, and $1,090 for Level III, payable in the equivalent amount in the country’s currency. The candidate may invest in texts, practice exams, and review courses.
Conclusion
If you aspire to build a career in investment banking, then the other most coveted option a candidate makes is acquiring both of these.
The choice of pursuing a second degree should always be made carefully after evaluating your career and where you see yourself in the future.
Ideally, most candidates opt for CFA as their first course because it allows them to learn the nitty-gritty details about finance and investment right from scratch. With CFA, even if you don’t have a strong background in commerce, you can easily understand the concepts taught in the course of CFA.
After completing the CFA and working for a couple of years to get some experience in the field of finance, if you believe an MBA will help give a boost to your existing career or make a difference in any way, then that decision should be taken.
It is a widely acknowledged qualification that is being referred to all over the globe regarding finance and investments. Thus, if you’ve just passed out recently, or in your last semester, then you must stand a good chance of getting CFA status. Want to know more? Highly recommend you go through our course on Chartered Financial Analyst (CFA).
FAQs on MBA Finance or CFA
Is CFA better than MBA?
Picking CFA over an MBA varies by individual career goals: it offers specialised expertise in investment management, while an MBA is a broader foundation in business administration.
Is CFA easier after MBA?
CFA is one of the toughest courses in the field of finance. To clear every level, the candidate needs to dedicate at least 300 hours of learning. MBA, on the other hand, is much easier as compared to CFA.
What is the salary of a CFA and MBA?
The average salary for an MBA graduate, according to PayScale, is approximately $88,000 annually and even more in consulting, investment banking, and private equity industries. According to the CFA Institute, the median annual salary for a CFA charterholder is about $180,000, with more opportunities for earning in senior positions.
Is CFA tougher than MBA?
It is indeed one of the toughest examinations known around the world. The CFA program is focused on investment management and is more suitable for those seeking careers in that field.