CFA Designation Vs. MBA degree

skycfa Wrote: ------------------------------------------------------- > buddham Wrote: > -------------------------------------------------- > But here is the catch: > CFA is CFA but MBA come strings attached. It > calls ‘name of the school’. I totally agree with this. CFA designation tells about a person’s knowledge in this area with a smaller standard deviation. Just MBA degree has a very high standard deviation. But I am talking about a person who has put the effort to get MBA (Industry mostly equates this to MBAs from some number of “top” schools). MBA curriculum does cover a very broad area that can help you manage better, but you can skimp on the study and still get the degree. And I like the fact that CFA is “democratic” in that it does not put any nonsensical barrier other than bachelor’s degree.

A lot of good points above. To add to skycfa’s point: There are 2 people: 1: whom most of us are, got a BBA or a BEcon or BFin, and took the CFA because we were born to do finance and we’ve know for a long time and that unless we get into a TOP TOP school for an MBA, there’s no point going to get an MBA at a lesser school because the knowledge and mentorship would have little value to us. 2: those who were in another industry and are moving into finance. if they want to get into the ‘business world’ then they should get their mba as it will provide them with the same stuff we learned in our BBAs and if they want to get into the ‘finance world’ they should get their CFA as the CFA is the only thing that focuses on finance quite as much AND you have to beat out others who are just as ambitious as you instead of just passing a certain mark. The answer is in what those dumb letters stand for. Chartered Financial Analyst - I want to analyze securities and financial statements. Masters of Business Administration - I mostly want to administer a business; i.e. manage. It all depends on what you want to do: I’d say the CFA is best for when you’re young and want to show that you’re smart and an MBA is best when you want to show that you can dedicate that kind of time towards something and that you’re responsible enough to manage people, BUT as so many non-finance people are getting MBAs its worth gets less everyday, and so I will repeat again, don’t get an MBA unless its from a top school or its worth nothing.

bannisja Wrote: ------------------------------------------------------- maybe > hardcore CFA enthusiasts would think these are > “soft” skills, but those are probably the genius > kids who breeze through the 3 tests, live in their > mom’s basement, and post up here about having a > hard time getting jobs/interviews. SO TRUE IT HURTS

JoeyDVivre Wrote: ------------------------------------------------------- > This was a pretty interesting post - MBA and CFA > are apples and blueberries, but stochastic > processes is uber-fruit. As a guy who has taken > tons of stochastic processes classes (my area of > specialization in grad school), it is just > oranges. Most stochastic process stuff is very > precise but the range of knowledge needed is very > limited (you can go a long way in math by > imagining that everything that ought to be true is > nearly true, figuring out the details on that, and > then fixing it up). CFA is very broad but not at > all precise. > I went through some of Random Prcocess classes from Stat dept to apply to nonliner systems I was working on. The purpose was to study the reliability of deep-offshore (> 3000 ft) platforms under wind, wave, and current loads. Wave, wind, current random loads can themselves be modeled using some extension of Normal processes by extending it to account for skewness and Kurtosis. That is all fine. The fun begins when the system (the platform in ocean) interacts with the waves, wind, and current. The system its boundary is pretty non-linear and you need to solve for some part of non-linearity. The same problem is there in fluid in the rocket boosters, nuclear-waste in containers buries inside earth, only difference is the kind of random loads in these cases; all of them involve Navier Stokes and had to be solved to properly analyze the reliability/riskiness. You can not just use the linearized system for these problems. The output of the system is very interesting and the methods you develop to analyze is not that precise. This is where lots of doctoral thesis are generated every year. I got out of this area long time back, but I am sure this area is heating up again as oil companies try to extract oil and gas from deeper waters. As for CFA, I do not think it is hard because the material is hard. But each level is like four (may be even six) courses and you get tested for it all at once. That makes it challenging. By the way, what is imprecise about CFA? Please do not be offended by this question as I am just trying to understand. Impreciseness is, of course, there as soon as you get out of theory and start applying it to real world, but CFA material and the tests are very precise unless you mean the shortcomings on part of CFA in giving as unambiguously worded questions. That for sure puts noise in the testing and may increase the margin of error on MPS.

… not to rain on your parade, but I don’t think any description of statistical applications is in any way going to intellectually intimidate JDV… just saying. CFA exams are imprecise because CFAI occasionally gets it in their heads that an entire item set (or two or three) should be allotted to obscure and scantily-covered topics on a completely ad-hoc basis, omitting other major topics in the process. At least that’s what I think he was referring to.?

No. It’s imprecise. Not because of the examination but the material on itself is often imprecise.

mikebc1 Wrote: ------------------------------------------------------- > … not to rain on your parade, but I don’t think > any description of statistical applications is in > any way going to intellectually intimidate JDV… > just saying. > I would not like to intimidate anybody; I do not think I even have the capability to do so. By the way, I am in a way new to AF and have been looking at it mostly only after June '08 exam, so I have not seen a whole lot of posts from JDV. But seeing the respect he has on AF, I will try to search JDV’s posts and learn from his gems of wisdom. JDV, keep it up!

As many have already pointed out, MBA designation is offered by thousands of schools and the level of coverage naturally varies. In Asia, the program is usually 2 yrs, but the class is often full of people with little or even no industry experience. For theoretical finance knowledge, this (lack/level of experience) may not make much of a difference. In Europe, a student has around 4-5 yrs experience on an average, but most of the programs are only 12-16 months long. (You may have 2 core courses in Finance, and two electives) In US, programs are usually 2 yrs, and the top schools usually just take in people with some solid experience. You would typically have 3-4 core courses in Finance, and perhaps 4-5 more electives towards majoring in Finance. When comparing CFA v MBA, obvious advantage with MBA’s - networking etc. We can only compare the knowledge of Finance. We can look at the Wharton MBA finance courses, amongst the best US MBA in the world in Finance, (http://www.wharton.upenn.edu/mbaresource/curriculum/fnce/) and compare the coverage of individual topics. Purely in terms of the knowledge of finance (width and depth), a CFA charter holder could compete with a Wharton MBA? Most schools follow a case study based approach, and the advantage is that you learn not only the textbook material, but also from the experience of other students. This is particularly useful for areas such as marketing, strategy and general management. In Core Finance, I am not sure how much value this adds. p.s. If you really want to get deep into random processes and stochastic calculus, why bother with an MBA? better try any MFE program or masters in Financial Maths instead?

MattLikesAnalysis Wrote: ------------------------------------------------------- > > The answer is in what those dumb letters stand > for. > > Chartered Financial Analyst - I want to analyze > securities and financial statements. > > Masters of Business Administration - I mostly want > to administer a business; i.e. manage. > > It all depends on what you want to do: This was my thought process when deciding whether to get my MBA vs. CFA. I know I would be very unhappy in management and in enjoy finance so the CFA seemed like the best avenue to pursue. I have been working on the institutional sell side for 5 years as an assistant and know it’s time to move on. My experience has made me aware that I would be much better suited for the buy side.

Ohhhhhhhhhhhhhhh %%%^%$ BS. It is always about my kung fu is better than your kung fu!!! Fact: If you get in MBA school; the vast majority will finish with degree. Fact: If you sign up for CFA, only small percentage will get designation. Now, now people, AM I WRONG HERE? PL-EAS-SE!!!

rhuldisch Wrote: ------------------------------------------------------- > Ohhhhhhhhhhhhhhh %%%^%$ BS. > > It is always about my kung fu is better than your > kung fu!!! > > Fact: If you get in MBA school; the vast majority > will finish with degree. > Fact: If you sign up for CFA, only small > percentage will get designation. > > Now, now people, AM I WRONG HERE? PL-EAS-SE!!! You’re absolutely right. But the point here is to compare the value of these diplomas. Is a Wharton MBA better than a CFA for example? And yes, it is about my kung-fu is better than etc. Let’s face it: people only take this exam to improve their professional situation (let’s not go into the “I’m passionate about finance” thing, I know some people do it for the challenge or whatever, but they are not the majority). So yes, people want to know whether they should focus on one thing or another. I reckon people are right when they say that it depends on the situation. If you are not in finance, MBA (top 5 that is, H/S/W + Chicago and Kellogg) is better. If you want to do anything else than investment management, MBA is generally better. If you are in IM already, obviously CFA is the way to go. The only case that I find difficult is if you are in finance (broad term I know) and are trying to break into IM, is an MBA better or a CFA? I would tend to say MBA to get in, then CFA to hone the technical skills; anyone else has an opinion? Otherwise, I think that in any other situation an MBA (top 5) has an edge over CFA. On the flip side though, MBA is a SERIOUS investment both time-wise and dollar-wise. If you are unlucky enough to graduate in a bear market like this one, you might regret doing an MBA in the first place.

Quoted from “Re: CFA or MBA? drymartini” Advantages: 1) if you go to a good school can get employment right from campus recruiting. No need to search for jobs out in the world where competition is tougher. 2) MBA is an educational degree. Going to school has its advantages. You “network” with people out there in real worlds having jobs. thats immensely helpful in getting a job after you graduate. Its a generally accepted opinion that the biggest BIGGEST advantage in going to a top tier (say ivy league) business school is that you make contacts throughout your time there. its not so much as the superior academics that set these schools apart, its the “networking” ability with people who have been there, who know who have been there or who are already there. you get the point. 3) MBA is a soft skill. If you realise that you dont want to be in some specific area in finance, you can always reposition yourself in something else. You only take electives in finance. rest of the curriculum would prepare you to move in other management position. ----------------------------- Disadvantages: 1) High Initial Investment. Even a top class non-ivy league school (i checked USC and UCLA) will set you back about 70 to 80 K, for the program (approximately, please check the websites for exact figures). Yes you will make it back but a lot of people are uncomfortable in starting out in a discipline where they start out looking for a job with such debt. 2) If you are looking for a Wall Street job, its meaningless to do an MBA from a school below top 10 or 15. Now this is my opinion and my research. If you ask me on a debate about this, i would decline to participate (meaning there is no empirical study proving this). sure there are people from lower tier schools but its very VERY hard to get into Wall street without coming from top school. you can work your way up always though. --------------------------------------------------------- CFA Advantages 1) Very low investment. You can clear your CFA (level 1,2,3) with as little as 3 K. yes you read it right, 3000$, over 3 years. clearing level 1,2 could get you a job starting at 50K till you get 4 years relevant experience to get your CFA. then sky is the limit. 2) If you specifically want to stay in Finance, CFA is an awesome way to get your foot in the door with minimum initial investment. You can keep your day job, study at night and lo and behold you are in. no need to quit your day job, just put in your efforts. 3) as far as finance goes, here is a common saying “CFA is mile deep, foot wide, MBA is foot deep, mile wide.”. Meaning what you will learn in CFA just level 1 might be the whole curriculum of MBA. MBA curriculum doesnt teach you nearly as much as CFA does. thats for sure. ----------------------------------------------------- Disadvantages 1) CFA has no value outside Finance industry. MBA is “bankable” anywhere. Late edit: You have to be absolutely sure you want to be in financial statement analysis/securities analysis/portfolio management career etc. Since its such a big investment in time (not money but min 3 years of your life) that you must be sure what you want in life. CFA is a professional degree and has almost no value outside these narrow career choices. 2) Motivation is very important. You will be studying on your own for 3 years (you can take level 2 and 3 only once a year so it takes longer to do CFA than MBA). self study is harder for a lot of people who like structured study in classroom (as in MBA) 3) Time value of money. You will most SURELY finish MBA a year or 2 ahead of CFA. even with your loan, you might come out ahead. 4) CFA is way more tough than MBA, way way more. Look at the pass rates before you start out. The pass rates of people who cleared level 1,2,3 in first try is about 20%. that means, on an average most of the candidates fail at least 1 level on first try, meaning having to wait another year to take it again. its a commonly accepted fact that CFA is the toughest exam in the country.

keanhu Wrote: ------------------------------------------------------- > Quoted from “Re: CFA or MBA? drymartini” > > Advantages: > > 1) if you go to a good school can get employment > right from campus recruiting. No need to search > for jobs out in the world where competition is > tougher. > > 2) MBA is an educational degree. Going to school > has its advantages. You “network” with people out > there in real worlds having jobs. thats immensely > helpful in getting a job after you graduate. Its a > generally accepted opinion that the biggest > BIGGEST advantage in going to a top tier (say ivy > league) business school is that you make contacts > throughout your time there. its not so much as the > superior academics that set these schools apart, > its the “networking” ability with people who have > been there, who know who have been there or who > are already there. you get the point. > > 3) MBA is a soft skill. If you realise that you > dont want to be in some specific area in finance, > you can always reposition yourself in something > else. You only take electives in finance. rest of > the curriculum would prepare you to move in other > management position. > > ----------------------------- > > Disadvantages: > > 1) High Initial Investment. Even a top class > non-ivy league school (i checked USC and UCLA) > will set you back about 70 to 80 K, for the > program (approximately, please check the websites > for exact figures). Yes you will make it back but > a lot of people are uncomfortable in starting out > in a discipline where they start out looking for a > job with such debt. > > 2) If you are looking for a Wall Street job, its > meaningless to do an MBA from a school below top > 10 or 15. Now this is my opinion and my research. > If you ask me on a debate about this, i would > decline to participate (meaning there is no > empirical study proving this). sure there are > people from lower tier schools but its very VERY > hard to get into Wall street without coming from > top school. you can work your way up always > though. > > -------------------------------------------------- > ------- > > CFA > > Advantages > > 1) Very low investment. You can clear your CFA > (level 1,2,3) with as little as 3 K. yes you read > it right, 3000$, over 3 years. clearing level 1,2 > could get you a job starting at 50K till you get 4 > years relevant experience to get your CFA. then > sky is the limit. > > 2) If you specifically want to stay in Finance, > CFA is an awesome way to get your foot in the door > with minimum initial investment. You can keep your > day job, study at night and lo and behold you are > in. no need to quit your day job, just put in your > efforts. > > 3) as far as finance goes, here is a common saying > “CFA is mile deep, foot wide, MBA is foot deep, > mile wide.”. Meaning what you will learn in CFA > just level 1 might be the whole curriculum of MBA. > MBA curriculum doesnt teach you nearly as much as > CFA does. thats for sure. > > -------------------------------------------------- > — > > Disadvantages > > 1) CFA has no value outside Finance industry. MBA > is “bankable” anywhere. > > Late edit: You have to be absolutely sure you want > to be in financial statement analysis/securities > analysis/portfolio management career etc. Since > its such a big investment in time (not money but > min 3 years of your life) that you must be sure > what you want in life. CFA is a professional > degree and has almost no value outside these > narrow career choices. > > 2) Motivation is very important. You will be > studying on your own for 3 years (you can take > level 2 and 3 only once a year so it takes longer > to do CFA than MBA). self study is harder for a > lot of people who like structured study in > classroom (as in MBA) > > 3) Time value of money. You will most SURELY > finish MBA a year or 2 ahead of CFA. even with > your loan, you might come out ahead. > > 4) CFA is way more tough than MBA, way way more. > Look at the pass rates before you start out. The > pass rates of people who cleared level 1,2,3 in > first try is about 20%. that means, on an average > most of the candidates fail at least 1 level on > first try, meaning having to wait another year to > take it again. its a commonly accepted fact that > CFA is the toughest exam in the country. Keanhu Good to see that some of us haven’t lost our report writing skills, even thought we have been ticking boxes for a while now… :slight_smile:

I agree with most everything you had to say. However, I think that an MBA with a concentration in finance and accounting is pretty similar to the CFA material. CFA might be a bit harder but not much. I am at a top 5 MBA and the depth that the core courses go into is about equal to Level 1 of the CFA, but the advanced classes are comparable.

I think that CFA designation is much better than MBA for the following reasons. 1- Competetion from all over the world ( MBA you can easly get it even with very good degree or good ) 2- Undesrtand alot of topics with your own effort ( MBA some one explain to you ). 3- Alot of MBA fail CFA test each year and vise vers is not true. 4- 1 test only each year ( MBA you have midterm and quizes and final ). 5- CFA designation ( you have to know every thing about every thing ). So i always respect CFA person than MBA person.

MBA: More Bullsh*t Added I have one, I know. For me, the CFA is much better.

I’d much rather have an MBA from a top ten school then the CFA.

night_visitor_85 Wrote: ------------------------------------------------------- > I think that CFA designation is much better than > MBA for the following reasons. > > 1- Competetion from all over the world ( MBA you > can easly get it even with very good degree or > good ) > > 2- Undesrtand alot of topics with your own effort > ( MBA some one explain to you ). > > 3- Alot of MBA fail CFA test each year and vise > vers is not true. > > 4- 1 test only each year ( MBA you have midterm > and quizes and final ). > 5- CFA designation ( you have to know every thing > about every thing ). > > So i always respect CFA person than MBA person. “night_visitor_85,” respect me, get me a job after my level 3 :wink:

Just for the sake argument … A small % get accepted to the top 20 MBA schools and yes once you get in you would have to be pretty retarded to not finish. CFA anybody can sign up and that is where the weeding out begins and thus maybe the small % of people who pass. All in all…i think the people who end up going out of MBA top 20 and CFA (all 3 passed) are probably of similar caliber in terms of smartness, hard work ethic, and determination. Basically, its hard to get into a top MBA but once you’re in its easy to get out. It’s easy to get into the CFA program and tougher to complete. I think this is a very fair assessment of the situation. Personally, I am all for CFA because I have a passion for finance and I think a good/talented “manager” needs no fancy MBA degree. You either got it or you don’t. Of course when you don’t got it…training from a top 20 school helps haha.

Sorry the previous post was in response to… Re: CFA Designation Vs. MBA degree Posted by: rhuldisch (IP Logged) [hide posts from this user] Date: July 9, 2008 05:28PM Ohhhhhhhhhhhhhhh %%%^%$ BS. It is always about my kung fu is better than your kung fu!!! Fact: If you get in MBA school; the vast majority will finish with degree. Fact: If you sign up for CFA, only small percentage will get designation. Now, now people, AM I WRONG HERE? PL-EAS-SE!!!