For a long time, MBA finance graduates dominated the field of investment banking. It was almost tradition. It took a certain caliber of professionals to take on the intense and pressure-filled world of investment services. The MBA program delivered well-educated and trained candidates to the finance industry.
That was then.
Today, things have changed. While a career as an investment advisor is still a lucrative option for finance-oriented individuals, you don’t necessarily need an MBA to succeed. Another certificate has emerged as the preferred qualification for the investment industry — the CFA course. It was established in 1947 as a course for investment advisory services. Since then, the CFA has become the designated destination for finance hopefuls. Global investment companies, banks, and even the big 4 have realised the value of a CFA credential on a prospective employee’s resume.
While an MBA in finance still holds considerable clout in the industry, it no longer commands the monopoly it once enjoyed. There are many factors at play here. So let’s find out why the CFA is slowly becoming a preferred qualification when hiring candidates to do the job of investment bankers.
Is CFA the next big thing in investment banking?
The chartered financial analyst program started over 70 years ago with an immersive syllabus that transformed potential-filled students into investment specialists. The success of the course resonated around the world as more and more countries began to adopt this educational program. Today it is recognized in over 165 countries, including the USA, UK, Canada, Australia, and China.
The rigorous, detailed curriculum explores core finance concepts and topics such as equity, derivatives and fixed income. Students who have done the course have received job offers from some of the leading financial firms around the world.
If you compare CFA vs MBA, you’ll discover many reasons why the former is fast gaining a reputation for churning out the next generation of qualified investment professionals.
Also Read – CFA Scholarship – Are you eligible for it?
Here is why investment banks prefer CFA vs MBA
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The CFA syllabus has a strong focus on industry knowledge, investment analysis and ethics
The course is designed as per real-world demands. The syllabus is structured according to what recruiters are looking for in their employees. Candidates with technical and analytical skills are widely preferred. This is one of the main areas where the CFA trumps MBA.
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Students gain proficiency in technical skills
The CFA believes that a well-rounded education is the key to professional success. The course offers comprehensive training in subjects like quantitive methods, financial reporting and economics. The objective is for students to apply theoretical knowledge to their daily jobs. The skills taught are in compliance with the latest industry trends and developments, so you will always be ahead of the learning curve. It makes the employer’s job easier when they know they don’t have to waste time and effort training the new hires.
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The CFA certificate is globally recognized
The corporate world is both shrinking and expanding. Corporations are spreading across the globe, with offices in every country. This brings people from different countries closer to each other. Suddenly, it is not too difficult to transfer out of your country and into a company branch in another nation. A CFA qualification helps a lot in this regard. As it is internationally acknowledged, you can migrate without having to retake a course or be certified as per the new country’s policies.
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The students have a global perspective
The CFA course helps students gain a deep understanding of the global economy. They learn how the investment industry works across the world. They can fit into any role and work consistently. Many investment banking jobs for freshers go to CFA-certified applicants as they bring an international outlook to their job.
Did you know, 84% of our students recommend that you join us for your CFA journey
CFA vs MBA finance — a comparison of certifications
| CFA | MBA (Finance) |
|---|---|
| It is a more cost-effective course with consistent pricing. | It can be an expensive course depending on which college you choose. However, most top-tier B-schools have high fees |
| The course schedule is very flexible. You can give the exams according to your convenience. | You’ll have to attend classes on campus for the full duration of two years. |
| You can take up a job and do the course side by side. | It is not possible to work when studying for an MBA |
| The full course is focused on the core subjects. | The first year is focused on more generic subjects. |
| The CFA course is standardized around the world. | The quality of your MBA course varies according to which college you got into. |
| The course duration depends on you. Most students take 3 to 4 years to finish all exams. | The MBA course is fixed at two years. |
| The CFA charter is recognized by leading MNCs, banks, big four firms, etc. | The MBA finance degree is also recognized by major MNCs and other prominent companies. |
| An ideal course for investment banking jobs for freshers | An ideal program for corporate finance, banking, and business management |
| The program enjoys a good reputation in the industry. | The MBA degree also has a good reputation in the finance field |
Also Read – A Comprehensive Guide To the Syllabus and Exam Pattern of CFA
5 skills you need to pursue investment banking
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Financial skills
You should be well versed in economics, maths and financial markets. You must also keep track of the latest news, changes and developments in the industry. Changes occur regularly in this field. Ensure you are on top of the latest information at all times.
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Networking skills
In this business, everybody networks, whether it’s at industry events, seminars or company functions. With a CFA charter, you can make the connections you need. There are more than 160 CFA societies around the world. Their purpose is to offer multiple educational and career enhancement benefits. You can access various resources, discover job openings exclusively posted for CFA holders and keep in touch with other CFA members.
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Analytical skills
A sharp mind and a critical eye are essential tools in investment banking. You need to examine the data, create strategies and build a plan of action that delivers results.
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Communication skills
You must be convincing and articulate when presenting your ideas and strategies to your team, your superiors or clients. Your ability to persuade and impress people will help you go far in your career.
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Ability to work under pressure
A calm and organized mind will go a long way in the investment banking industry. If you can work in a fast-paced, stress-filled environment and still produce quality work, then this is the right job for you.
Also Read – Top 10 commonly asked investment banking interview questions
How to become a successful CFA charter holder
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Eligibility requirements
- A bachelor’s degree received from a valid college
- Or, if you have worked for four years in a relevant field
- You have a functioning passport
- Your country has a CFA affiliation
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Course details
There are three levels in the curriculum, comprising of the same ten subjects.
- Ethics and Professional Standards
- Quantitative Methods
- Portfolio Management
- Economics
- Financial Reporting and Analysis
- Corporate Issuers
- Derivatives
- Equity Investments
- Fixed Income
- Alternative Investments
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Work requirements
You can apply to become a charter member after:
- You have worked for 4,000 hours (or 36 months)
- The job is in the investment industry and a relevant capacity
- You can work full-time or part-time
- The work you have done before, during or after your course counts
Get exam pass commitment for CFA exams from IMS Proschool
The IMS Proschool CFA program
Is it your dream to apply for the job of investment banker one day? IMS Proschool’s CFA course can help you get there. The reputed and popular institution enjoys a high success rate, as every year, the students clear the exams and move on to exciting careers in the investment services industry. The reason is, Proschool engages its students with inventive and interesting teaching techniques that bring the subject matter alive. As the syllabus is vast and detailed, Proschool has a qualified and efficient faculty to cover the topics methodologically. They break down concepts and simplify complex terms. Students understand the material instantly and can learn the subjects quickly. Proschool ensures you get the training and development to become a globally renowned chartered financial analyst.
Course highlights:
- There are a number of resources such as 2,000 practice papers, mock tests and s and study guides to get you ready for the exams
- You can attend live coaching classes in cities across India or log online to sit for the virtual training sessions
- The institute gives you the placement assistant to apply for investment banking jobs for freshers
In conclusion
CFA vs MBA? Which one is better for a career in investment banking? If you have done the research and examined the data, then the evidence is pretty clear. Today, the CFA program is making a loud buzz in the finance industry. Investment banks tend to ask for chartered financial analysts when posting job openings. Recruiters shortlist CFA-certified resumes. It is the wave of the future now. While the MBA continues to be a well-respected degree, it is probably time to think more like a global professional and make a choice that will positively impact your future.
FAQs
1. What is the Chartered Financial Analyst (CFA) course?
The CFA course is a globally recognized qualification in the investment industry, established in 1947. It consists of a rigorous curriculum that covers core finance topics such as equity, derivatives, and fixed income, transforming students into qualified investment professionals.
2. Why is the CFA becoming a preferred qualification in investment banking?
The CFA is becoming a preferred qualification because it offers an in-depth, focused syllabus that meets industry demands. It provides students with proficiency in technical skills and a global perspective, making them immediately employable without the need for additional training.
3. How does the CFA course compare with an MBA in finance?
While an MBA in finance provides a broader understanding of business and finance, the CFA course is more focused on investment analysis, financial reporting, and economics. Furthermore, the CFA is more flexible and cost-effective, globally recognized, and standardized, irrespective of where you take it.
4. What skills are required to pursue a career in investment banking?
Key skills for investment banking include financial knowledge, networking abilities, analytical skills, communication proficiency, and the capacity to work under pressure. A CFA qualification can equip you with these skills.
5. How can one become a CFA charter holder?
To become a CFA charter holder, one needs a bachelor’s degree or four years of relevant work experience, along with a valid passport. There are three levels in the curriculum, each comprising the same ten subjects. After completing these and meeting the work requirements, you can apply to become a charter member.
6. What is the IMS Proschool CFA program?
IMS Proschool’s CFA program is a comprehensive course designed to help students pass the CFA exams and launch successful careers in investment services. The program offers a multitude of resources, including practice papers, mock tests, and study guides, along with live coaching classes and placement assistance.
7. CFA vs MBA, which is most preferred by investment banks?
While both qualifications have their merits, the CFA is increasingly preferred by investment banks for its focused and practical approach to finance. It equips students with relevant skills and knowledge, making them immediately employable in the industry.
