CFA vs MBA Finance– Complete Guide for Finance Aspirants

October 14, 2022
cfa vs mba

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Are you confused between CFA and MBA?

This article can help you decide on your desired course. 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.

An MBA, or Master of Business Administration, with specialization in finance, includes the study of management, collection, control, and investment of money.

Chartered Financial Analyst (CFA) is a post-graduate professional certification. It includes studying 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, to a greater extent, CFA is a centralized knowledge of monetary investigation. However, an MBA takes to the core aspects of management studies.

This article will cover ten major aspects to compare CFA vs MBA.

Eligibility Criteria

The eligibility criteria for Chartered Financial Analyst in comparison to Masters of Business Administration are as follows:

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.
  • Entrance Exams like CAT/ XAT, etc.

Offering Institutions

Let us now look at the institutions that offer the certifications – Chartered Financial Analyst and Masters of Business Administration.

CFA:

CFA is a professional certification. It is not considered a post-graduate degree. But the level of education in the CFA program equals a master’s degree. In other words, it is more of a qualified professional 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:

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

Admission Process

The admission procedure for each course – CFA, and MBA are:

CFA:

The CFA admission process is very simple. 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:

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. After securing a minimum percentile, candidates are called for Group Discussions and Personal Interview 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

Both the courses CFA and MBA have arisen from the commerce domain. The subject ideology is quite similar in both, but each of the courses focuses on slightly different core subjects. Let us have a look:

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

Each certification differs in its examination format. Each course follows its examination structure and procedure, and so do CFA and MBA.

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 morning and afternoon session, and each session is for 3 hours.
  • Level 2: There are a total of 10-15 vignettes supporting 120 multiple-choice questions. 10-15 vignettes support 60 questions in morning and afternoon sessions each, and each session is for 3 hours.
  • Level 3: 8-14 vignettes support constructed response questions in the morning session. Also, 10-15 vignettes support 60 multiple-choice questions in afternoon sessions. Each session is for 3 hours.

MBA:

The Common Admission Test (CAT) is the main entrance exam conducted for admission to top MBA colleges in India. It is a 3-hour online exam comprising multiple-choice questions. CAT consists of three sections:

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

Candidates need to clear the sectional and an overall cut-off for admission to MBA colleges.

Course Fee

The total fees for CFA and MBA courses are as follows:

CFA:

For registration in the CFA program, there is a fixed one-time registration required for enrolment in CFA. The fees cost you around Rs. 30,000. The overall fees of the CFA course range around INR 2.2 Lakhs.

MBA:

The course fee of an MBA program in India depends on the colleges you wish to pursue your MBA in. It can be as low as INR 20,000-25,000 and as high as INR 25,00,000. Almost all the top 30 MBA colleges in India cost more than INR 17,00,000.

Duration

Both the courses, Chartered Financial Analyst and Masters of Business Administration, differ in their duration. The time to be invested in these courses is slightly different.

CFA:

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

MBA:

MBA is a two years course. Students with work experience may also opt for a 1-year executive MBA. Also, several types of MBA are offered such as full-time, part-time, international/global MBA, etc.

Difficulty Level

The difficulty level varies in CFA and MBA.

CFA:

Students have to study for more than 300 hours in CFA. Also, the difficulty level is quite high and increases as you pass the subsequent levels. The overall pass rate of CFA is 34.6%.

MBA:

The difficulty level of an MBA is low as compared to CFA but it is a hectic program. There is a 100% attendance rule in many colleges—moreover, corporate visits, seminars, case studies, presentations, and many leisure activities are involved.

Scope and Job Prospects

Job prospects after CFA and MBA in Finance are quite 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:

The scope of an MBA is highly dynamic. Multiple career roles arise with increased experience. The prospecting job roles offered under MBA are:

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

Average Salary

The average salary of CFA and MBA are almost similar.

CFA:

The CFA program can provide handsome salaries. The highest salary can go up to INR 8 Lakhs per annum after completing every level. However, the average annual CFA salary in India is around INR 6.87 Lakhs.

MBA:

MBA in Finance from a reputed institution provides high salaries. The average MBA salary for freshers is around INR 2.76 Lakhs per annum, going up to INR 8.48 Lakhs per annum for people with work experience.

Salary Source: Glassdoor, PayScale.

MBA vs CFA – At a Glance

Point of DifferenceCFAMBA
Course OverviewChartered Financial Analyst course focuses on several aspects of investment management and financial analysis.Master of Business Administration aims at providing students with in-depth knowledge of management studies.
EligibilityBachelor’s Degree in any discipline from a recognized institute.
Minimum 4 years of work experience in equivalent fields.
Bachelor’s Degree in any discipline from a recognized university.
A minimum aggregate of 50% is required. Entrance Exam
InstituteAIMR – CFA InstituteAlmost all colleges such as IIMs, FMS New Delhi, etc
Admission ProcedureRegistering on the official website.Entrance Exams – CAT
Core SubjectsFinancial Reporting Analysis
Ethics in Investment Portfolio Management Asset Management
Financial Strategy  
Advance Marketing
Financial Planning
Hedge Fund Management
Securities Analysis
Global Finance  
Exam FormatThe course comprises three levels of ExaminationThe Common Admission Test comprises three sections
Course FeeINR 40,000 – 1 Lakh20,000 – 40 Lakhs
Duration1.5 – 4 Years2 Years
Difficulty LevelHighModerate
ScopeEquity Research Analyst
Financial Analyst
Credit Analyst
Senior Financial Analyst
Equity Research Associate
Corporate Financial Analyst
Accountant or Auditor
Consultant
Credit Analyst
Accounting Manager
Cash Managers
Manager Consultants
Credit Managers & Specialists
Corporate Controllers
Finance Officers & Treasurers Insurance & Risk Managers Investment Management
Average Salary (Annual)6.87 Lakhs8.48 Lakhs

Is CFA better than an MBA?

After comparing MBA vs CFA, 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, and services, you study finance and money in-depth in CFA. But you first need to understand your interests to decide between the two options.

However, MBAs are better if we consider the growth factor. They can work in different categories other than their specialization. Therefore, in the beginning, the salary of an MBA is greater than CFA.

On the other hand, 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 and doing 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 sit and study for the exams. Some people like meeting and managing people, but others are more comfortable in their own space. As a result, deciding on your sort is the first step to selecting between both selections.

CFA or MBA? Make your Choice

Concerning MBA, if you enter a Business School, there are very few chances of failing. However, it might be difficult to find a new line of work. While in CFA, just 20% of the individuals who give the Level 1 test become CFA. 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. The CFA designation is highly valued in finance-based companies and investment banking.

You don’t even need to leave your job to give CFA exams. CFA is a good-to-go option if you already have a finance career and love your work. However, if you still cannot decide on your career goals and are unsure about your interest in finance, you can opt for a generic field like an MBA, where you can better understand corporate life. This concludes our topic on CFA vs MBA.

You can also read our blog on CFA vs CA – Which is the Best Option?

To read more related articles, click here.

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