As the topic is CFA Vs MBA, we will be talking about MBA in Finance as specialization to give a better picture of both the course and help you decide as to which is better suited for you and what career opportunities does both the course offer.
The main difference between the two is that CFA is a distance learning course whereas MBA is a two year or a one-year full-time course depending on the institute you choose but in most cases, it is a two-year full-time course. Also, another big point is from where you pursue an MBA which we will cover below.
Who is this course for?
First let’s talk about both the course from a broad view. CFA is the most generic international course in finance, as it covers every topic of finance in absolute detail and it is the most highly recognized and respected course in the field of finance throughout the world. CFA is organized by the CFA Institute which was founded in the year 1947 and is headquartered in Virginia U.S.A. CFA is best suited for students who want to build their career in
- Equity Research
- Investment Banking
- Mergers & Acquisitions
- Private Equity
- Corporate Finance
- Portfolio Management
- Financial Advisory
These roles mentioned above are pure, niche finance roles and CFA is the golden platform to prepare for such profiles.
Coming to MBA, it is literally the most generic course available in India, every locality has a couple of MBA’s , so if the course is so common and generic what’s the point of even thinking to purse MBA. The catch here is that MBA only matters as long as you are pursuing it from the top 20 if not top 10 institutes of the country.
The problem here is that getting into these institutes is extremely challenging as you need to score a minimum of 98 percentile and then crack the group discussions and the interviews to get yourself a seat in these institutes. Major roles offered after MBA in Finance from such institutes are:
- Investment Banking
- Portfolio Management
- Finance Associate
To conclude the first point CFA and MBA (Finance) from the top institutes both offer the most niche finance profiles in the top companies. So, if these are the profiles you are looking forward for then both the courses are the right choice.
Note: All the details with respect to MBA from now will be in reference to the top tier- I MBA institutes.
Difference between CFA and MBA
|Eligibility||Must be in the final year or have a bachelor degree/ 4 years of work experience in any field||CAT Percentile of 98+ minimum Great academic records in 10th and 12th. Work experience is an added advantage. Excellent in any sports or extracurricular activity is also an added advantage.|
|Exam Details||Level – I 240 MCQ Questions Exams held in June & December Level – 2 120 MCQ Questions Exams held only in June Level – 3 10 essay type questions and 60 MCQ Questions Exams held only in June||Every Institute has their own customized syllabus and exam pattern but most commonly there are a total of 4 semesters divided in a 2 years program. Where in the 1st year all the subjects are generic and in the 2nd year students choose their specialization.|
|Passing Rates||Level – I 42% Level – 2 45% Level – 3 52%||Depends on various quotas, talking about the general quota a minimum of 95 percentile CAT score is required to get an interview call.|
|Time taken||2-3 Years||2 years (Full Time)|
|Fees||$450 Registration Fees (Valid Throughout) $700/$1,000/$1,350 for each level depending on the time of registration||Average fees for a Tier- I MBA institute for their flagship course is around INR 15 Lakhs.|
As clearly seen above from a cost perspective MBA is very expensive from any top institutes, and for many of us such big fees might be feasible only through a student education loan, but the average placement packages makes up for that fees in the very 1st year of work.
Which is more Difficult CFA or MBA?
Let’s answer this by crunching some numbers to give you a better look a feel of the competition and intensity of both the courses.
For MBA, total CAT applicants in 2019- 2.44 Lakhs
Total MBA seats in the Tier- I Institutes- 5,000 approx.
This shows that only about 2% of the total CAT Applicants make it to the Tier- I institutes.
So about 10% of the Level 1 candidates make it, also this figure includes only the candidates who appear for the exam and also includes the ones who are re appearing so after accounting all that about 7% actually become CFA.
SO, both the exams are extremely difficult and are highly competitive but in between the two it is MBA that is more difficult assuming a Tier- I institute.
Assignments and Field Visits
As mentioned earlier CFA is a complete distant learning course and hence there is no question of any assignments or field visits. In case of MBA these are an integral part of the curriculum and are a very good exercise to give the students a real hand feel of the industry and give a glimpse into the daily life as a professional. This really helps students to get a practical approach towards the course and they are not restricted to just the theory and academic part of it.
Top few firms that recruit CFA and MBA
- Deutsche bank
- Citi Group
- Goldman Sachs
- Mckinsey and co.
- J.P. Morgan Chase
- Morgan Stanley
- HDFC Bank
- ICICI Bank
- SBI Bank
- Black Rock
- Mirae Asset Management
- Morning Star
- Care Ratings
- And many more
Average CFA Salary Vs MBA Salary in India
|After CFA Level- 1||(3- 4+ Lakhs P.A.)|
|After CFA Level- 2||(6- 10+ Lakhs P.A.)|
|After CFA Level- 3||(12+ Lakhs P.A.)|
|After CFA Charter||(18+ Lakhs P.A.)|
Average packages from the top MBA institutes is around 15 Lakh + P.A.
Highest packages is in Investment Banking Industry and Consulting industry, here the salary is north of USD $100,000 plus bonuses. Only difference here is that with CFA you reach this level with a minimum of 5 years of prior work experience in the same industry, where as if you are a graduate from an ISB or IIM Calcutta, IIM Ahmedabad this kind of packages are received from day one.
Benefits of doing MBA + CFA Combo
CFA on a standalone basis is not considered optimal for niche finance roles, although this only true for INDIA, in other countries such as USA or UK or other Asian countries CFA on a standalone basis is self-sufficient, but the course is still evolving in the Indian space and it might take some time for the country to recognize CFA on a standalone basis.
Hence, if your end goal is to work in India it is in your best interest to club CFA along with a MBA to up skill yourself and stand out from the crowd. Finance as an industry has only started its journey in the Indian markets and the growth rate over the next 15-20 years is going to be tremendous with the help of mutual funds trying to channelize savings into investments for the better growth of the economy.
This will help in an efficient capital allocation which will ultimately help the entire economy grow as a whole. As the industry grows there will be a huge amount of job opportunities for skilled and professional people to efficiently manage funds and being a CFA+ MBA will give you an edge over the other candidates.
The main benefits of clubbing CFA along with MBA is that MBA gives you a network in the industry as your batch mates and alumnus will be in the same industry and one major asset in the industry is to create to a wide network, also MBA will give you insights into real-world business examples, complex case studies etc. CFA, on the other hand, will brush your technical and analytical skills to understand every product available in the financial markets.