The choice between a master’s of business administration degree or a Chartered Financial Analyst designation may have just become clearer for those who wish to advance in the banking industry.
A new study released by eFinancialCareers shows that employers, by a large margin, seem to prefer MBAs when it is time to hire managing directors.
London-based eFinancialCareers, a financial-services website, analyzed 17,266 resumes in its global CV database to focus on people with more than 10 years’ experience who work in front office positions in sales, trading or IBD.
The data was then divided by those who are managing directors and then categorized by the mention of CFA or MBA on the resumes.
The results were telling.
The eFinancialCareers’ study showed that about 16% of the MDs in its database had the MBA designation versus about 7% with the CFA.
“The implication is clear,” eFinancialCareers concluded. “The more senior you aspire to go in a front office investment banking job, the more worthwhile it may be to spend $160k+ on a top MPA instead of scrimping and studying the CFA Program.”
Weighing the Differences
Both MBAs and CFA designations can earn professionals front office jobs, but the costs and commitment involved in the two paths can muddy the selection waters.
Pursuing an MBA takes about two years, during which most people find working difficult, and can cost hundreds of thousands of dollars, depending on the specific program.
MBAs from some schools tend to have a higher value than others, often making it necessary for graduate students to choose costlier programs to get mileage from their investment.
While the CFA designation takes about four years and 900 hours of study to earn, Heather McGregor, a London Business School alumnus, points out that it is like a “Big Mac” in that it’s the same wherever it’s taken and is the only “truly global” financial services qualification.
Even so, the pass rate for the CFA is low with just 44% of 47,000 professionals who took first-level exams making the grade in December 2014.
Best Business Schools
Financial industry professionals interested in advancing their careers with an MBA will find the U.S. News & World Report has released its 2016 Best Business Schools rankings. Factors such as employment rates, reputation and student selectivity are considered in developing the rankings for top graduate business schools.
- University of Pennsylvania (Wharton)
Harvard University MBA graduates had the highest starting salary and bonus packages of the top three at $144,750, according to U.S. News, while Stanford came in at $142,834 and the University of Pennsylvania at $142,574.
While eFinancialCareers’ study indicates an answer to the age-old question of MBA versus CFA, both can serve to advance a financial career. MBAs, however, are more likely to find themselves in the front office, according to the study.