I’ve been doing some research regarding my decision on further eduction, and came across this forum, which seems very supportive and informative.
I am in the process of doing my MBA part-time (concentrations in Finance and Accounting) at a very reputable program. I will finish in May of 2013 and I will turn 29 that month.
I’m wondering whether to now go for CFA or CPA. I currently work within asset management risk within a bulge bracket IB. I’m relatively unsure as to if I want to be in corporate finace/CFO-type role in the future, or if I want to move up within risk management or move to the front office in asset management.
I initially thought that the CPA was just for accountants, but I have come across many job postings in my firm that are outside of traditional accounting (operational risk, performance, internal audititing, etc.) where the CPA is valued. I know I could pass the CPA exam, as I have friends of mine who applied to my MBA program and did not get in, but they passed the CPA. I’m also very confident I can pass level 1 of the CFA, but I guess what’s holding me back is that I wouldn’t be able to start the CFA journey until next year, right when I turn 29 (and I would take level 1 in December 2013, so I’ll be close to 30 at that point).
I guess it really comes down to what I want do…but does anyone have any advice? If you were in my situation and still relatively unsure as to where you wanted to go with your career, would you opt for the CPA or CFA to go along with your MBA?
I’d go the CPA route. Since you have a strong accounting background and are currently in an environment where the CPA is valued, I’d utilize the tail with that your current environment provides and get the CPA. If you’re still interested in investment management after you’ve completed the CPA, you can still get the CFA. Given how much of the CFA exam is based on accounting, a strong knowledge of accounting will help you with the CFA exams. Plenty of people in the investment world have both the CPA and the CFA. Because of the experience requirements, I think it may be easier to get the CPA then the CFA. You may be able to apply your CPA experience towards the CFA, but you may not be able to apply your CFA experience towards your CPA.
You really think the CPA would be easier for me to get? To clarify, I don’t have an accounting background. I was a Finance/Econ double-major in undergrad (at a decent regional school, but graduated top of my class), and am doing Finance/Accounting now in my MBA. I would still need about 15 credit (5 classes) hours of accounting in order to get certified as a CPA (though I can sit for the exam much sooner than that).
I do agree with you, though, that I can pass the CPA exam with considerably less effort than the CFA, and then use that knowledge to help with the CFA in the future if I ever decide to go that route.
I think I need to choose the path that is the best hedge on my bets…meaning, I’m not completely sure if I want to work in corporate finance/CFO type jobs, or move to front office in AM/equity research. Since I’m unsure as to where I want to go right now, what would be the best at allowing me a broad range of career paths in the future?
the CFA charter might seem like a lifetime away… but realistically you could sit for lvl1 in Dec, lvl2 next june and be a a lvl3 candidate within 18 months from now.
If you want to hedge your bets by getting both the CPA and the CFA, I would suggest doing the CPA first. The reason being, I believe you can put your CPA work experience towards your CFA, but I don’t think you can put your CFA work experience towards your CPA. So if you want to hedge your bets and get both the CPA and the CFA, I think it’s easier to do by starting with the CPA.
Well, I don’t want to do traditional accounting (at least, not after I get the experience required for the CPA). I like the idea of working as a CFO of a hedge fund or in corporate finance in a non Wall Street firm. The negatives, for me, with going for the CPA is that I’d have to take about another year of classes after my MBA in order to satisfy all the credits I’d need to get cerfified.
With the CPA, I know I’ll just breeze through the classes after my MBA (since I’m in a hard program now), and you can pass all 4 parts of the CPA in a very short period of time (i think even in one weekend - correct me if I’m wrong).
What is really holding me back about the CFA is that Levels II and III are only offered once a year. I just hate the idea of studying my heart out and not passing, and then having to wait a freaking year in order to be able to take it again. I feel like I’d lose focus. But from what I’ve heard, most people just take off a few months, and then start studying again after a break.
Have there been any studies done showing any kind of correlation between general intelligence and passing the CFA? I’d like to believe I’m possess above average intelligence (I didn’t go to an Ivy League, but did very well grade wise in undergrad, and have a 3.6 GPA now in a hard MBA program with quant classes). I guess I’m just questioning if I have it in me.
With the CFA, I wouldnt have to take anymore classes after school…I would graduate next May, take off for 2 or 2.5 months (enjoy the summer), then start studying for the CFA around mid July, early August.
I’d like to respond as someone who has completed the CPA and currently a level II candidate.
Firstly, you mentioned that you have friends who passed the CPA but did not get into your MBA program. I don’t think this is a good measure of the CPA exam, often MBA programs (especially prestigious ones as you claim yours to be) are more about who you know than what you know. The CPA exams are quite difficult but very rewarding at the same time. I can tell you that even 2+ years after taking the CPA exams the knowledge is still in my head and I get use out of it VERY often (whether it be while making investment decisions, tax/estate planning for myself and relatives, or offering business advice to friends). Unfortunately, I can’t say the same thing about the level I CFA exam. I took and passed this exam less than 6 months ago and already I have forgotten most of the material. I feel like level I was all about memorization (I’m hoping II and III will be different), whereas the CPA exams really taught me valuable knowledge that stuck with me given the depth of the material.
Now, I’m supportive of anyone pursuing the CPA exam to enhance their knowledge, but keep in mind that in order to get the license you NEED to be working under a licensed CPA who will sign off on your experience (some states require 1 year some require 2 for experience). You also need to take an ethics test, and do a bunch of other stuff that is a pain in the ass and costs upwards of 1.5k in addition to all the exam fees.
If you’re trying to decide which test to take first I would highly recommend CPA before CFA. CPA will give you broad business knowledge first and deep accounting knowledge, from there you can focus in on finance with the CFA. The experience you need as a CPA will almost certainly apply towards your 4 years of CFA experience, but the reverse is almost never true. Lastly, if you go into the level I CFA exam with CPA knowledge, it should be a walk in the park.
iteracom, I don’t want to work in traditional accounting per se. I’d use the combination of MBA/CPA to get me into corporate finance, or a job as a controller/CFO of a hedge fund. I mean, ideally, that’s what I’d like to do after getting whatever experience is required for the certification.
Strider4216, thanks for your input. It is interesting to get the point of view from someone who has done the CPA and now doing the CFA. To clarify what I was trying to say earlier, I didn’t mean to say that because my friend didn’t get into my MBA and passed the CPA that it’s a good indicator of anything. I know the CPA is hard. I guess I just never remembered this guy (and a few other people I know) being particularly studious or bright, and they were able to pass the CPA, all in their first shot. Maybe they just studied their asses off? I guess that just have me some hope, since I know them personally (“If they can do it, I can do it” sorta thing). And as far my MBA, I am in a reputable part-time program, and it’s very competitive and the classes are hard. I’ve taken (and done very well in) electives such as Futures & Options, Debt Instruments, Corporate Finance, and the like. And next year I’m taking Accounting electives (Financial Statement Analysis, Fin Reporting & Disclosure, etc). So, hopefully my background will help with either exam.
I’m wondering if going for the CPA first may be better, as I’ll get the classes out of the way. At least with the CFA, if you don’t take a course, you’re pretty much just studying on your time and don’t have to deal with school.
Also consider this, it takes a minimum of 18 months to complete all levels of the CFA exam. The CPA can be completed in as little time as you need (took me 3 months to pass all 4 sections).
Lastly, since you weren’t an accounting major you want to make sure you have the proper units to sit for the exam. Each state is different, but here in CA you need a good amount of accounting and general business units.
I earned my ACCA in my 27, wasted my 28, finished a Master course in my 30 & finished the CFA exam in my 40 (using 9 years).
However, I don’t think all the above help me a lot in my career. I even think business studies add little value to the society (compare to doctors, engineerers …)
In my opinion, one’s career depends on his fortune. You can only equip yourself & do your best.
To be relevant, I think doing the accounting exam first is better. It help you deal with level I & II of the CFA exam. Or you can try to take both exam at the same time. As (1) Level I & II of the CFA exam are MCs, (2) you are major in finance & (3) your first language is English.
In my opinion, the most difficult part of level III of the CFA exam is how to write the answers in correct English quickly (as my English is poor) instead of getting the correct answers.
I feel exhausted after passing the CFA exam in June 2011. I don’t want to take any professional exam. I just want to play my beloved Les Paul and give more time to my family.
The more I think about this, the more I feel I should just go for the CFA. Although the CFA is significantly harder than than the CPA, since I wasn’t an Accounting major in undergrad, I would have to go back to school for another year to get the remaining credits, and THEN, I would need to do a lateral move to get the work experience. For me, getting the CPA makes me jump through more hoops. I mean, I could take the exam just to strengthen my accounting knowledge, but to get certified, I’d have to do all of the above. And, after almost 3 years of night classes, I’d rather just be home studying for the CFA on my own time. As much as constant studying sucks, it may be a nice change of pace for me.
On the other hand, I could start studying for the CFA immediately after finishing school the first week of May 2013. I would give myself about 2-2 1/2 months off, and then begin studying for level I in July 2013. And I feel like, given my finance background in undergrad and in my MBA, level I shouldn’t be too terrible.
I’m just hoping 5 months of studying (Jan-May) is enough for level II!
How many accounting credits does one need to sit for the CPA exam? I’m surprised with your dual BS and MBA you’d still need 5 accounting classes to sit for the CPA.
Well, I think I only need like 1 or 2 classes to actually sit for the exam. But in New York state, we need 33 credit hours (11 classes) of accounting. I only took 6 undergrad, and will have taken 9 in my MBA, so I would still need 18 credits, which would probably take me about a year or so part-time. I feel like, in that time, I could be just studying my heart out for the CFA as opposed to yet another year of night classes. Not to mention that, even after taking and passing the CPA and doing all the extra accounting credits, there is still the work experience requirement.
If I was an accounting major in undergrad and had some accounting work experience, it would be a no-brainer. But since I have none of that, actually getting the CPA certification (not just passing the exam) requires me jumping through more hoops than maybe I’m willing to do.
If you want a broad range of career paths in the future, CPA is probably better. CFA is still very limited to investment management. Also, I think it’s hard to move into front office with a risk background unless you move into quant research, but then most quant research roles require hard science degrees.
Corporate finance isn’t necessarily boring. Accounting is important in corpfin but you also deal with m&a, treasury (which might have exposure to investment management). You’re managing a business rather than a portfolio. Also, in corporate finance you have more flexibility to cross industries or work in the consulting environment. In asset management, you’re stuck with the same type of firms and people.
In the end, it’s more important to decide what you want to do first.
Well, my MBA will be in Corporate Finance/Accounting/Financial Instruments (those are my specializations). So I should have enough of a background in both areas to be able to potentially apply for corporate finance roles in the future.
I mean, after class last night, I spoke with two classmates who have CPAs, and they both came out and said that I should NOT get a CPA. Overall, it just seems that CFAs are much more highly regarded. And from my standpoint, because I’d have to jump through more hoops than the average person to get certified as a NY state CPA (due to my lack of accounting undergrad), I just feel it makes more sense for me to go for the CFA instead.