That question has perplexed financiers across the investment spectrum. There are valid cases for each credential. But ultimately, both three-letter acronyms are not mutually exclusive.
Business schools and the CFA Institute are increasingly teaming up to provide both the technical expertise and analytical mastery provided by the CFA curriculum, and the broad management nous you’ll get on an MBA program.
Stephen Horan, managing director of credentialing at the CFA Institute, estimates the curriculum is incorporated into more than 300 business school programs globally.
This may become more important to business schools, as CFA is accepted as the global standard qualification in some areas of investment.
“The CFA charter is often listed by hiring firms as a prerequisite for employment,” says Stephen.
IE Business School was the first in Spain to partner with the CFA Institute. Today, around 20% of current finance masters students have passed different levels of the CFA exams, says Viet Ha Tran, director of finance admissions.
But Viet sees degree programs as having an advantage in some areas. She says: “The case study methodology, the IE Trading Room, the class interaction with professors and peers, and the participation in finance conferences on campus, are some of the many values that only a masters program can offer.”
But the two are “very complementary”.
“CFA exams complement MSc exams nicely, with the latter providing the theoretical and conceptual basis for understanding how and when to apply the techniques addressed in CFA exams,” says Steven Young, head of finance at Lancaster University Management School.
Now, entire degrees are being developed with CFA in mind.
LUMS last year, for instance, began offering the CFA Level II qualification through a new degree, the MSc in Advanced Financial Analysis.
Based in the City of London, the program prepares students to take Level II of the CFA upon completion of the degree. It’s open to all graduates who have already passed Level I.
In future, such tie-ups may be more common, as students are increasingly attracted by what CFA offers, says Dr Julia Knobbe, director of the masters in finance at Frankfurt School of Finance & Management.
“Many of them sit for CFA exams while pursuing their degrees in Frankfurt,” she says.
Alex Stremme, assistant dean for the MSc in Finance at Warwick Business School, adds: “We are working closely with the CFA Institute on curriculum development.”