Why investment banks are hiring CFA® charter rather than MBAs

If you’re considering a career in investments or investment banking, one of the biggest questions which come to any aspiring candidate is whether to pursue a Chartered Financial analyst (CFA) or do a full-time MBA from any of the top colleges. CFA® Program is a self-study, part-time, three-level certification program which requires a lot of time commitment but can be managed with a job and relatively lower investment. On the other hand, MBAs from top colleges are usually full time and require a high investment in terms of money and time.

  • Traditionally, an MBA is the standard route into investment banking, but in recent times there is a trend of investment firms hiring charter rather than MBA from top institutes. One of the key reasons is that the charter holder focuses on deep investment knowledge, analytical skills and ethical foundations. Investment banks want employees with a combination of strong analytical and interpersonal skills. However, most entry levels where investment banks typically recruit would require strong technical and analytical ability, where charter scores over an MBA.
  • The emphasis of CFA® Program is very much on achieving technical/analytics skills across a range of subjects like quantitative methods, economics and financial reporting and analysis along with a strong foundation of ethics. This expertise gained through CFA® Program will serve well throughout one’s career, demonstrating to any potential employer that you’re up-to-date on the latest industry trends and possess the requisite commitment to developing your career. Any potential employer will therefore likely to invest in you from both a career development point of view and, potentially, pay rises.
  • By contrast, MBA programs tend to offer little in the way of deep technical education and generally focus on general business and management topics. To generalize, the skills obtained in business school were better suited for employees in more general disciplines, such as marketing or general. Even if a particular MBA does provide deep investment expertise, there is no standardization even among top institutes. In comparison, the CFA® Program was devised to provide charter holders with specialized skills, such as investment analysis, portfolio strategy and asset allocation. CFA® Program is a truly globally recognized certification with an up-to-date curriculum devised by practising industry professionals and renowned academicians.
  • The other key advantage of the  Program is the ability to acquire specific investment related skills at a relatively low cost. However, although the program is based on self-study, it is demanding, requiring a commitment of a minimum of 2.5 years (average of four years and 1,000 study hours on average) to complete it. Because of high commitments both in time and money, the total number of successful charter holders is limited. The effort of completing a program is well worth since it’s the only truly globally recognized finance certification and will stand out in your resume. The CFA® Program has one of best ROIs since, with relatively lower hard cost, successful candidates who obtain the charter can look forward to a significant boost in earnings over the course of their careers.
  • The program instills in you a strong foundation of ethics and ethical standards, culture of continuously improving one’s knowledge by participating in the continuous education program and assist you to network among peers by joining a vast professional network of more than 100,000 charter holders worldwide and gain unmatched career resources, important relationships, and lifelong insights.
  • Now, it’s not a question of whether one should pursue a CFA or not for a career in investments since it has become a prerequisite in many areas of investment banking like portfolio management, equity research, hedge funds etc. Even in other areas of investment banking, a CFA® charter would provide a significant boost to a career in investments. If you are thinking of an investment banking career, one has to consider becoming a CFA® charter.

CFA Institute does not endorse, promote, or warrant the accuracy or quality of the products or services offered by IMS Proschool. CFA® charterCFA® Program are trademarks owned by CFA Institute.