MBA or CFA?

[Coleman]

Greetings,

I have been working as a management consultant for 2 years now and have been recently promoted to a Senior Consultant within my consulting practice. I graduated with a 1st class honours in Business Finance from an Australian university.

I am now planning to further my studies. Should I do an MBA or a CFA if I want to remain in consulting?

My initial thoughts are if I wanna do an MBA, it has gotta be one of the top few MBAs, no point doing 2nd or 3rd tier MBAs. CFA is also a good qualification as it is a professional industry accreditation.

Any thoughts? Will appreciate you advice.

Thanks in advance.

[This message has been edited by Coleman (edited 26-05-2003).]

[lamington]

I have an MBA froma top European school and I am currently studying for my CFA.

I think you should do an MBA if you intend to remain a management consultant.  A CFA is good if you want to stay in investment banking.

I'm doing it to learn something but after so much work and time spent for the last 6 months, I would say I will not be progressing to Level 2 - I want to enjoy life.

[charter holder]

The key to remember is that you're talking two different animals, especially if one is a fulltime, top-tier MBA program and the other is the CFA program.

My friends and I chose the CFA route, as we had decent jobs within banking and the opportunity cost of leaving for an MBA program was high, even with the firm helping out with the finances. But your circumstances may be different and an MBA may be more appropriate, especially if you're intent on studying more than finance or if you fancy a couple of years off amid the cute co-eds.

Also, there's nothing to prevent you from doing both. That said, your age and work experience are significant factors in admission to top B-schools. Become an outlier (e.g., wait too long), you probably hurt your chances of admission. But you can basically enter the CFA program at anytime. Easy to start. Not always so easy to finish.

[Coleman]

Greetings,

Thanks for the advice given so far by Lamington and Charter holder. Quite well balanced actually as Lamington took the MBA route while Charter Holder took the CFA route.

Agree that CFA is easy to start and not easy to finish as usually only less than half get the CFA accreditation. And I guess if I do want to remain in consulting, a MBA from a top tier school will be more valuable than a CFA. Is this perception correct among the more senior people in consulting?

[Lamington]

Definately - if you are talking McKinsey, Bain etc, MBA is way over the CFA if you want to stay in Management Consulting.

Also, I think you have a fantastic salary right now.  With an MBA from a top school eg: Harvard, you could easily double or triple your salary - I am not sure if you quoted your salary in USD or SGD but I guess either way you will benefit but only from a top school.  The AGSM and Melbourne are fine schools but next to the top European and US school, they fall behind.  That's why I did mine in Europe and not back home in Oz.

[MBA]

Coleman,

I suggest try getting your company to sponsor you in one of the top B-schools exec programs.

Few choices here:
Chicago
Duke (has a Cross-continent program, either US-Germany or US-Korea)
Insead (starting their Exec program btw S'pore & French campuses)

I believe each of those programs cost ~ US$100k, and many have students w/ corporate sponsorships. Students will also be able to apply what they learn at school immediately at work. Also, these programs limitless through space and place allowing some flexibility for students to remain full time work.

Saw your other posting, depending if which currency you are using, and depending your work experience, MBAs from the above schools usually will fetch an avg of US$100k at ~ 26-28yrs old. The higher range will be ~ US$120-130k in the US, or around S$150-S$250 in S'pore if you are not a trader or investment banker. The market may be lower now, but if you can prove your value to the organization, you definitely know you have a good degree to back your case...

BTW, graduated fr a Top 5 US MBA school, and never regret a bit... Those 3 schools I recommend will be what I would consider if I am living in S'pore and wanting to redo my MBA again !!!

[Coleman]

MBA, thanks for your kind advice. It is very clear and helpful. CGSB and INSEAD are also 2 of the choices which I am currently considering.

The executive MBA route seems to be the most porbable ones although I understand that INSEAD does offer the 1 year full - time programme. Because of personal reasons and also due to the high opportunity costs of forgoing 1 year worth of income, I find it more and more difficult to take 1 year off and go do a MBA.

Well, the trick is wait for a few more years when I have gathered enough years of working experience (5 - 10 years) to qualify for an executive MBA at the top schools here. Nonetheless, I like the fact that I will be able to pursue a top tier MBA while not forgoing any income which is in SGD, btw.

[MBA]

Coleman,

Give Insead a call or check on their website, I heard they are launching the Exec MBA this yr, they are just starting the recruiting effort now...

Hope this helps...

[charter holder]

Coleman,

After seeing some of your particulars elsewhere on the board (age: 26; salary S$90k; likely to remain in consulting), then I would say you should give serious thought to a fulltime MBA at a top school.

You are currently prime admission bait at your current age and with your sort of background.

The schools themselves and other sources can give you an idea of the salaries being offered to grads.  But I am sure they are significantly higher than S$90k and in line with the figures suggested above. You can even find the avg. salaries of those being admitted to get an idea of how others are calculating the cost/benefit.

I may be biased, but "exec" programs seem like a poor second cousin to proper MBA programs. Heck, I'd rather the company just give me the US$100,000 that they cost, seeing as how I already have a job.

The calculation was different for my friends and me, especially the ones with the high-potential producing positions. One guy did quit his job at the bank for a top MBA program, but later regretted it. He joined a tech firm and briefly entertained the idea of massive equity-related wealth, until the crash, which took both his options and dreams well under water.

Meanwhile, his former cronies are now relatively senior guys at the banks, which means they're doing OK even though they still have to show up to work every day.

[Coleman]

Thanks guys for the advice. I have set my mind to take some time off from the constant flying about and go do my GMAT.

Just checked average score for INSEAD in 2002 intake. Average GMAT score is 700. Gotta give it my best shot man!

Cheers mates!

[Joseph27]

What is the actual benefit of having a CFA certification?  

My education background is more arts based with some business - and I believe that some more training in finance / accounting may be helpful.  

Similar to Coleman I guess - trying to decide between the two.  My current situation isnt bad - but there is little chance of getting my company to sponsor any $80K executive MBA and I see little point in doing some sub $20K MBA from an English university that sounds okay  over here in Singapore but would probably get me laughed at in the UK.  

All I want to do is accumulate the knowledge - though the qualification is important - the knowledge is moreso

[Coleman]

Hi Joesph, if you are in banking or investment research, then a CFA is very valuable, if not....., a top tier MBA from a very good school is then worth the investment in time and money.

which industry are you in?

[Joseph27]

Retail - a bit different from banking and finance.  

I do my job well - I understand all that I am required to understand but I am just keen to be able to jump to that next tier in my career.  

My wife will probably do the CFA and I will do the MBA so we can actively learn from each other.  What MBA have you decided to do?

[Lamington]

I just did the CFA Level 1 exam a few days ago - I do not recommend it for just accumulating knowledge because it is 6 months of solid study and 6 months of absolutely no life and the exam is 6 hours long with half an hour break by the time you count getting out of the room and getting back into it again!  It's not worth it because it is very hard!!  You can only get the CFA charter if you also have 3 years of relevant work experience and if you have passed the 3 exams so if you do not intend to work in this field then you will not be awarded with the little words CFA.

[charter holder]

Coleman's comments seem right. The CFA designation seems very relevant for industries such as investment banking, investment research, fund management, etc. For other industries, an MBA might be a better match.

Lamington, c'mon mate. The difficulty of the CFA process/exams is related to the value of obtaining the charter. If nothing else, a prospective employer knows they could wring six hours of honest work from you on a Saturday! Relax, chances are you passed.