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Career options in India after Bachelor of Economics
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October 29, 2020

Confused between MBA in finance and CFA? Let’s compare CFA vs MBA

 

To compare the two most renowned courses in India, we need to start with having a basic understanding of the two terms, MBA in finance and CFA.

MBA in finance is a master’s in business administration in a specialized field of Finance. It is the study of management, collection, control, and investment of money.

The Chartered Financial Analyst (CFA) is a post-graduate professional qualification. It includes the study of money in-depth and is offered to investment or finance graduates.

CFA vs MBA in finance is a very subjective question. However, it completely depends on the student’s choice and interests. Both CFA and MBA are money-related fields. But, CFA is to a greater extent a center, inside and out a monetary investigation. However, an MBA shows you the executives of account.

In this article, we will cover 10 major aspects to compare CFA vs MBA.

Eligibility and Skills Required

CFA:

  • Bachelor’s degree (or equivalent) in any stream.
  • Minimum 4 years of work experience in finance/investment related fields

MBA:

  • Bachelor’s degree in any stream from any recognized university.
  • Minimum 50% marks in graduation degree.

Offering Institutions

CFA: CFA is not considered a post-graduate degree. But the level of education in the CFA program is equal to a master’s degree (recognized by United Kingdom NARIC). In other words, it is more of a qualified course, not an academic degree. The AIMR offers the CFA program globally. It is an American based CFA institute for investment and financial experts.

MBA F: Almost every college in India offers an MBA in Finance. Some famous institutes are the IIMs, FMS New Delhi, XLRI, and ISB.

Admission process

CFA: CFA admission process is a very simple process. Eligible candidates have to register on the official website of ICFAI or CFA Institute. Students need to register for the Level I exam before September and the exam is conducted in December.

MBA F: To take admission in MBA finance, you first need to clear entrance exams of respective colleges. Some exams are CAT, XAT, SNAP, MAT, CMAT, NMAT, etc which are conducted from November to January. After securing a minimum percentile, candidates are called for GD/PI rounds. Some colleges also conduct tests like WAT, Team activity, and case study discussions. Candidates get admission to colleges after the successful completion of all the rounds.

Core Subjects

Core Subjects for MBA & CFA

CFA:

  • Financial Reporting Analysis.
  • Ethics in Investment Portfolio Management.
  • Asset Management.
  • Financial Strategy.

MBA in Finance:

  • Advance Marketing.
  • Financial Planning.
  • Hedge Fund Management.
  • Securities Analysis
  • Global Finance.

Exam Format

Exam format for MBA in finance & CFA

CFA: For CFA, students need to clear three levels. All these exams are conducted in two sessions, morning and afternoon.

  • Level 1: There are a total of 240 multiple-choice questions. There are 120 questions in each of the morning and afternoon sessions and each session is for 3 hours. The passing rate is 43%.
  • Level 2: There are a total of 10-15 vignettes supporting 120 multiple-choice questions. 10-15 vignettes supporting 60 questions in morning and afternoon sessions each and ach session is for 3 hours. The passing rate is 45%.
  • Level 3: 8-14 vignettes supporting constructed response questions in the morning session. Also, 10-15 vignettes supporting 60 multiple choice questions in afternoon sessions. Each session is for 3 hours. The passing rate is 56%.

MBA F: The main exam that is conducted for admission in MBA colleges in India is CAT. It is a 3-hour online exam which is conducted in November. CAT consists of three sections, i.e,

  • Verbal Ability a Reading Comprehension (VARC),
  • Logical Reasoning and Data Interpretation (LRDI), and
  • Quantitative Ability (QA).

Candidates need to clear the sectional as well as an overall cutoff to get admission in MBA colleges.

 

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Money investment

CFA: When you register for the first time, there is a fixed one time registration required for enrollment in CFA. The fees cost you around USD 450 ( approximately Rs 30,000). Further costs for registration in Level 1,2,3 depends on when you decide to register like early registration fees are USD 700. While standard registration fees are USD 1000, the late registration fees are USD 1450.

MBA F: MBA in India highly depends on the colleges you wish to pursue your MBA in. It can be as low as INR 20,000-25,000 (FMS, New Delhi) and as high as INR 25,00,000 (Old IIMs). Almost all the top 30 MBA colleges in India costs more than INR 17,00,000.

Time Investment

CFA: On average, people take 3-4 years to complete all the levels for CFA although 2 years are enough to complete it. It completely depends on your speed and hours of study. Every level takes approximately 6 months of preparation to clear.

MBA F: It is a 2 years course. Students with work experience may also opt for a 1-year executive MBA.

Difficulty level

CFA: Students have to study for more than 300 hours. Also, the difficulty level is very high and keeps on increasing as you pass the subsequent levels.

MBA F: The trouble level of MBA is low when compared to CFA but it is a hectic program. In many colleges, there is a 100% attendance rule. Moreover, there are corporate visits, seminars, case studies, presentations, and a lot of leisure activities.

Job Prospects

Job prospects after CFA and MBA in Finance are similar.

CFA: CFA scope in India is very high. The more levels you clear, the better the job you can get. Job profiles offered after CFA are

  • Equity Research Analyst.
  • Financial Analyst.
  • Credit Analyst.
  • Senior Financial Analyst
  • Equity Research Associate
  • Corporate Financial Analyst
  • Accountant or Auditor
  • Consultant
  • Credit Analyst

MBA F:

  • Accounting Manager
  • Cash Managers
  • Manager Consultants
  • Credit Managers & Specialists
  • Corporate Controllers
  • Finance Officers & Treasurers
  • Insurance & Risk Managers
  • Investment Bankers

Average Salary

CFA vs MBA Salary is almost similar.

CFA: The CFA program can provide handsome salaries. The highest salary can go up to Rs 40,00,000 after completing every level. However, the average salary of CFA in India is around Rs 6,50,000.

MBA F: MBA in Finance from a reputed college provides high salaries. The average salary for freshers is around Rs 6,50,000 which can go up to Rs 50,00,000 for people with work experience.

Is CFA better than an MBA?

After the comparison of CFA vs MBA, the only person who can answer this question for yourself is YOU. While an MBA teaches you to run a business, managing money, people, products, services, in a CFA you study about money in-depth and there is hardly any study of management. But, you first need to understand your interests to decide between the two options.

However, MBAs are better if we consider the growth factor. MBAs are adaptive in nature. Moreover, they can work in different categories other than their specialization. Therefore, in the beginning, the salary of an MBA is greater than CFA. However, CFA is a very specialized field. There are not many options after CFA. They are the people who know how to make money out of money. They may start at a lower salary package but can reach high levels by utilizing their potential.

Some people find CFA to be a bit tougher than an MBA. It is because the subjects are more specialized and advanced. On the contrary, the workload on MBA students is high. While pursuing an MBA you start making networks, do group projects, and case studies. This helps you learn the demands and lifestyle of the corporate world. Whereas in a CFA, all you have to do is just sit and study for the exams. Some persons like meeting and managing persons but there are others who are more comfortable in their own space. As a result, coming to a decision about your sort is the first step to selecting between both selections.

Conclusion

If you enter a B-School, there are very less chances that you will fail, however, it might be difficult to find a new line of work. However, just 20% of the individuals who give the Level 1 test really become a CFA. In fact, you don’t need to clear all three levels to get a job. Moreover, you can sit for jobs with only 1 level in hand. CFA credential is highly valued in finance-based companies and investment banking.

Moreover, you do not need to leave your job to give exams. If you are already in a finance career and loving your work, then CFA is a good-to-go option. However, if you are still not able to decide your career goals and unsure about your interest in Finance then you should opt for a general field like an MBA where you can gain a better understanding of corporate life.

 

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