Thursday, June 3, 2010

The MBA and the CFA, Part II: The Debate

They are not easy decisions for finance professionals--deciding to get an MBA, pursue the CFA, or do both. Nobody disagrees with the benefits of the MBA or the CFA. There are the knowledge and discipline, the tools and models, the theory and information, and the exposures, experiences, and contacts.

Yet assessing the value of pursuing both is a tough, agonizing decision--even when many say having both "separates you from the pack" or "gets you in the door" or when a growing number of investment funds and asset managers are requiring MBA and/or CFA credentials.

The time involved in preparing and studying (while holding a demanding full-time position) and the money invested are factors that weigh heavily on anybody who--with an MBA--has thought of getting the CFA. Even after they decide they have the money and can manage the time, candidates must assess whether the designation will help propel a finance career. Can it be the impetus to help professionals reach the level of partner, principal, managing director, portfolio manager, or senior trader? Can it even give them a thrust to get the important entry-level position?

Consortium Finance Network members this past week engaged in hearty, lively debate about the pros and cons of the CFA after the MBA. Everybody weighed in--including recent Consortium graduates, long-time finance professionals, candidates studying for exams, and those who have passed all three Levels.

Often in such debates, there is no right or wrong, no winner or loser. There are, however, viewpoints, shared experiences, informed advice, and encouragement for anyone who is in the throes of deciding what to do. There are recounts of bad experiences and overwhelming moments, but also thrills of having mastered a discipline or learned something new.

This debate, however, had a special wrinkle: Does the combination of MBA and CFA give those in under-represented groups (minorities and women) a boost in getting offers from top investment firms and in accelerating their careers in finance?

In the end, intelligent, respectful debate is healthy. Students and younger MBA's get to hear well-reasoned arguments from all sides, especially from experienced people who grappled with these issues and career decisions over 10, 15, or 20 years ago. They get to take it all in and make right decisions for themselves.

The debate over what best prepares women and people of color for careers in finance will continue and will be enhanced by others' experiences. But there are a few things CFN members or other experienced professionals in this debate agree on.

1. While views of the benefits of the MBA and CFA in the long term vary, almost all agree that with both you amass enormous amounts of knowledge in corporate finance, accounting, economics, investment analysis, portfolio management and capital markets. You do learn something. And knowledge is always useful and helpful in the short and long term.

2. The MBA/CFA designations are no guarantee of employment at full potential (the best possible job or career, given your preparation and education)--especially in current times. The MBA/CFA draws attention and gives you a unique brand. But there are countless others with the same credentials, vying for similar spots.

3. Although the MBA/CFA is no guarantee for securing the ideal position, in an environment where employers have the upper hand, they may still choose to require it--because they can or because they need to filter through hundreds of candidates.

4. In finance, other exams or certifications may be necessary, even if you have the MBA or CFA. If you sell or trade securities, provide investment or merger advice, or manage investment professionals, you will need to take FINRA series exams. Having the MBA and/or CFA, however, will likely make you better equipped to take these exams.

5. An MBA and/or CFA doesn't necessarily make the playing field level for minorities and women, as much as everybody wishes or hopes. Why? Because, as CFN members debated this week, securing top-notch positions in top firms still requires relationships, networks, contacts, luck, and getting prospective hiring managers comfortable with who you are.

6. Despite a general upturn in markets and hiring over the past year in finance, it is still a tough marketplace for all, especially for those in under-represented groups.

The irony is that while many agonize and debate the value of extra credentials, many focus on extra credentials to get attention and squash any doubts hiring firms may have about technical skills and knowledge. And many understand that credentials, plus relationships, networks, contacts and luck, will be what gets people closer to the ideal finance role they covet.

7. The current discussion is fruitful to all, but the debates will continue as long as there are financial institutions, MBA degrees, and finance certifications (including CFA, CFP, and CPA).

The CFA Institute has acknowledged that its mission is not to take a side, although it can outline the pros, cons, factors to consider, and preparation and it can introduce candidates to experienced CFA's who can advise them in decisions.

Its primary objective is to ensure people are well-informed about the content, costs, time and requirements of CFA Levels, and it certainly wants to do a better job in educating and increasing the numbers of those from under-represented groups.

Tracy Williams

No comments:

Post a Comment