An MBA is better than a CFA if you want to make MD in banking

It’s the perennial debate: should you get an MBA or a CFA if you want to get ahead in banking? An MBA from the sort of top tier school banks like to hire from will cost you a small fortune and mean that you need to give up work for two years. A CFA will not – and will mean that you can keep on working.

Over the long term. however, the discrepancy between the two qualifications becomes apparent.

We looked at the 17,266 resumes in the eFinancialCareers global CV database which belong to people with more than 10 years’ experience who work in front office jobs in sales, trading  or IBD. We then cut this data according to whether they are managing directors and whether their resumes mentioned the CFA or MBA acronyms. The results were telling.

Source: eFinancialCareers 

The implication is clear. – The more senior you aspire to go in a front office investment banking job, the more worthwhile it may be to spend $160k+ on a top MBA instead of scrimping and studying the CFA Program. Naturally, there are caveats – ‘CFA’ could simply mean that someone has studied CFA Level I, rather than completing the full CFA Charter. Equally, however, our stats are looking at MBAs rather than those from banks’ favourite schools - the likelihood of making MD if you’ve studied at Columbia, Wharton, Harvard, or the London Business School is almost certainly higher still.

Although most investment banks have cut their MBA hiring - especially for sales and trading roles, business schools suggest the breadth of their MBA programs means that banks still come to them to recruit senior staff of tomorrow. “An MBA is distinct from the CFA programme in that it isn’t just about acquiring the technical knowledge necessary to do the job – it’s about developing as a person and learning the broad skills necessary to be a leader,” says Christian Dummett, head of finance careers at LBS. “When banks hire MBAs they are looking for their future managing directors, which is why there will always be demand for people join associate classes – especially in IBD.” 

However, Heather McGregor an LBS alumnus, ex-banker and author who’s written on careers in the City, says the CFA has its merits too. “An MBA from one school is not worth the same as an MBA from another school,” she tells us. “However a CFA Charter is like a Big Mac – it’s the same wherever you take it and it’s the only financial services qualification that is truly global.”

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