Putting a Dollar Value on a CFA Charter vs an MBA

Earning the CFA charter is a notoriously difficult process, one which requires hundreds of hours of hard work and study over many years, not to mention the thousands of dollars it costs in exam fees and test prep. While holding the charter is often seen as a career booster, many potential candidates wonder exactly how much more they will earn with a CFA charter than with, say, an MBA. Ultimately it boils down to whether or not there is there a way to put an intrinsic value on either designation, and, if there is such a value, what is it?

It turns out, as many candidates have discovered, and many more will no doubt discover as they read on, that there is no intrinsic value to the CFA charter or, for that matter, an MBA. The charter is not a golden ticket to a perfect career, but rather a stepping stone that any hardworking, smart, dedicated (as anyone who is able to pass all three levels no doubt is) financial analyst can use to attain their desired level of success.The decision to pursue a CFA charter versus an MBA comes down to a dauntingly complex decision: what does the designation holder wish to do? The question of monetary gain will no doubt arise, but the hard truth of the matter is that in order to get that money they will obviously have to do some work.The CFA charter gives holders a deep understanding of a very specific field, while an MBA grants holders a generally shallow understanding of an extremely wide field.

While most positions that look for MBAs will also consider CFA charter holders, the opposite is not always the case.When it comes to numbers, any comparison between CFA charter holders and MBAs won’t be quite accurate: MBAs tend to hold extremely varied jobs in a myriad of fields while CFA charter holders, again, do a few very specific jobs (e.g. portfolio manager, financial analyst, security analyst). That said, it is possible to look, subjectively of course, at the average salaries of CFA charter holders.According to various salary surveys conducted over the past five years, an entry level CFA charter holder can expect to make somewhere around $50,000; within four years that median salary increases to the $60,000 range. In the next decade the median salary increases yet again to the low six digit range.The median salaries for MBAs, on the other hand, varies greatly. While all CFA charters are created equal, all MBA degrees are not.

A first year MBA can expect to make about the same as a first year CFA charter holder, unless, that is, she is a graduate of a top 25 ranked school. If that is the case, then, she can expect to make more than twice that. While it may seem arbitrary or unjust, MBAs from top-tier schools appear to earn significantly more for the first decade or so of their careers; after ten years it evens out between MBAs and CFA charter holders, varying more depending on the location and size of the organization they work for.

Pursuing a CFA charter or an MBA is most certainly an investment. The time and money that go into both titles is nothing to take lightly, so candidates interested in either need to seriously consider what they’re doing it for, and what they hope to gain from receiving it. That said, both the CFA charter and an MBA will give any financial career a boost, a definite advantage in the current job market.

–Mitchell Geller