CFA vs MBA, What Is Best For Engineers (Pros and Cons)

Many, including myself, have encountered the urge for additional education after having worked for a few years in the industry. It is either required to progress in your career or one just feels the urge to learn more.

In Finance, which was my area of work having a CFA (Chartered Financial Analyst) designation was almost required in order to progress to portfolio management or research role. In many ways, it also shows dedication and the endurance to complete another gruelling few years of studying.

An MBA is no different but more widely used across different industries. It is often regarded as a required qualification to advance your career into senior management positions. In addition, an MBA broadens your network which can be very useful if you want to change your chosen career at some point in the future.

Having done both the CFA and MBA qualifications I can walk you through the Pros and Cons of those esteemed designations and highlight the aspects for Engineers in particular.

What are the differences between CFA and MBA?

There are several key differences between a CFA and an MBA for engineers. We have summarised here some of the pros and cons to consider:

CFA

Pros:

The CFA is specifically designed for finance professionals and covers a wide range of topics related to investing, accounting and economics

The CFA can be completed in as little as two years, making it a shorter commitment than an MBA.
The CFA is less expensive than an MBA, both in terms of tuition and opportunity cost.

Cons:

The CFA does not cover general business topics such as management and marketing.

The CFA is a highly specialized credential, which may limit your career options if you decide to change industries.
The CFA institute conducts the exam which is notoriously difficult, and the pass rate is less than 50%.

MBA

Pros:

The MBA is commonly seen as a general business degree that covers a wide range of topics, including finance, management, and marketing.

The MBA can be essentially completed in as little as one year, making it a shorter commitment than a CFA.
The MBA is generally less expensive than a CFA, both in terms of tuition and opportunity cost. Some high-end MBA programs, however, can be very expensive.

Cons:

The MBA does not cover investing topics in as much depth as the CFA.

The MBA is a general business degree, which may limit your career options if you decide to change industries.
The MBA exam, similar to the CFA, is very difficult, and the pass rate is less than 50%.

CFA vs MBA for Engineers (Pros and Cons)

Key Points

CFA is specifically designed for finance professionals, while MBA is a general business degree.

CFA can be completed in as little as two years, while MBA may take only one year.
CFA is less expensive than MBA, both in terms of tuition and opportunity cost.
CFA does not cover general business topics such as management and marketing, while MBA covers a wide range of topics.

CFA is a highly specialized credential, which may limit your career options if you decide to change industries.
MBA is a general business degree, which may also limit your career options if you decide to change industries.
Both CFA and MBA exams are notoriously difficult, with pass rates of less than 50%.

Should I take CFA or MBA?

There is, as is usually the case, no one-size-fits-all answer to this question, as the best decision for you will depend on your specific goals and circumstances. However, in general, the CFA program is designed for individuals who want to pursue careers in investment analysis and portfolio management, while the MBA program is geared toward those who want to become business leaders in a variety of industries.

Having done both qualifications I can see positives for both. For an engineer, however, I would imagine an MBA has more of an appeal as it gives a more all-round perspective on business and management which could be very useful for an aspiring individual whose ambitions go all the way to the management floor. As such, an MBA gives you a lot of options if you want to stay in the engineering industry. If you want to change careers, an MBA degree will give you the necessary distinguishing factors in your resume to compete for management positions in other industries as well.

I guess the only consideration to go after a CFA degree would be if an engineer is considering the highly competitive financial industry such as investment banking. As an engineer, you will have the necessary mathematical background but some of the financial and economical theories and applications will have to be studied before entering a career path in investment banking.

Can engineers take CFA?

Yes, of course. Anyone, including engineers, can take the CFA exam. The CFA is a globally recognized financial analysis designation that is well-respected by employers in the finance industry. The three-stage exam covers a broad range of topics in financial analysis, including investment analysis and portfolio management.

The CFA program registration fee is $ 950 for the first exam and $ 450 for each subsequent exam. The exam administration fee is $ 650 for the first exam and $ 325 for each subsequent exam. And once you have earned the right to showcase your designation on your CV and business card it will cost you $ 350 a year.

To get your CFA certification in the shortest time possible, you will need to follow a rigorous study schedule. Allocate at least 300 hours of study for each level of the CFA exam. If you want to complete the CFA program, it is recommended that you will have to study for at least 10 hours per week.

Is it worth getting an MBA as an engineer?

MBA programs typically provide students with the skills and knowledge necessary to succeed in business. The degree can help students advance their careers, start their own businesses, or become better leaders and managers.

The answer therefore entirely depends on someone’s career ambition. If you are generally interested in broadening your skill set and acquainting yourself with the most important aspects of management and business decision making then an MBA degree is very useful.

In addition to acquiring the knowledge, you will also get to broaden the network of people you are studying for your MBA with. The diverse background of people you will meet will be a great nurturing ground for friendships and contacts which will be valuable throughout your personal and professional life. Think about how many people you met at business schools.

Last but not least will the immense career progression potential you will be able to embark on once you have completed your degree. Look at any management team of a company. Many of the leaders will have an MBA degree of some sort. It is sometimes useful to look through some of the CEO, CFO, etc. CVs and look at how they reached those senior positions. I bet most of them will have additional qualifications next to their name.

Is pursuing CFA better than a Masters?

A master’s degree is generally seen as an advanced academic degree earned after completing a bachelor’s degree. A master’s degree usually takes between one and three years to complete. As such, the time taken for completing the degree is similar to the CFA.

It is hard to compare a CFA designation with a Masters degree. Both are highly specialised exams with a particular focus. Masters degrees typically go into quite a lot of academic detail in the chosen field (Finance, Law, Engineering, Biology, etc) whereas the CFA gives you a broad overview in the areas of investing, accounting and economics with a particular focus on practical applications.

As in all things, the decision is entirely up to the individual’s interest. I would say that a Masters is probably more applicable for people who want to further their careers academically. The CFA exam is for people who have already set sight of a career in finance in general.

Which is better CFA or MBA?

I will give you my personal view on the subject in the hope it will help you determine what is right for you. I first decided to pursue CFA charter designation as I entered the field of asset management after I first started a career in investment banking.

It certainly was instrumental in acquiring the necessary tools, although I already had a Master in Finance degree, to broaden my view on practical, rather than theoretical applications. This is obviously very pertinent when you are doing the CFA exam while working in the field which was the case with me.

As I have further progressed in my career and taken on more managerial positions, having the knowledge from the MBA qualification came in very handy. As such, I think completing my MBA shortly after finishing my Masters degree was too early. If I could do it again, I would do it part-time later in my career although it might then become too time-consuming.

Many finance and non-finance companies are urging their managers to take on additional qualifications. Some companies are even willing to pay for your MBA if you decide to do so.

Is MBA more difficult than CFA?

Having done both I would say that they are equally difficult to complete. The key difference for me was that the CFA charter exam was more about knowledge “cramming” rather than studying certain aspects of business and management.

From a purely time perspective the CFA was more challenging for me which was mainly due to the fact that I was working full-time. In addition, the necessary speed to answer the exam questions in two gruelling 3-hour exams was quite different when compared to the MBA exams which had hardly any multiple choice questions.

Looking back at my CFA exam we were only allowed to use the Hewlett Packard HP 12C, which at that time in 2003 only had the reverse polish input system. This alone took a few weeks to get used to. A funny yet almost tragic thing happened to me when sitting for my Level 1 exam. I somehow put decimal places to zero and didn’t know how to reverse it. I almost panicked. 2 divided by 3 gave me a 1. It took me 30 minutes to figure out how to undo it. I passed the exam still. The MBA exam was comparatively less stressful.

Is CFA useful for MBA?

While the CFA designation may be helpful for MBA students who wish to pursue careers in corporate finance, it is not required. It will, however, give you advantages when going for an MBA qualification as you will already have the foundations of all relevant areas when it comes to investing, accounting, reading financial statements and economics.

Is it useful the other way around? Having the foundations of an MBA will certainly be useful when pursuing a CFA, it will however not solve for all the detailed work and the required hours needed to complete the exams successfully. There is just too much detailed knowledge which needs to be acquired. The CFA exams are notoriously difficult and the multiple choice questions can be tricky to answer. I would say that the 300 hours required to pass the exam is pretty accurate in my experience regardless and what other qualifications you might have.

Conclusion

There is no one-size-fits-all answer to the question of whether an engineer should take a CFA or MBA, as the best decision depends on specific goals and circumstances. However, in general, the CFA program is designed for individuals who want to pursue careers in investment analysis and portfolio management, while the MBA program is geared toward those who want to become business leaders in a variety of industries.

For an engineer, an MBA (Master of Business Administration) has more appeal as it gives a more all-around perspective on business and management, which could be very useful for an aspiring individual whose ambitions go all the way to the management floor. As such, an MBA gives you a lot of options if you want to stay in the engineering industry or even if you are considering transferring to another industry (non-finance related).

The only consideration to go after a CFA degree would be if an engineer is considering the highly competitive financial industry. As an engineer, you will have the necessary mathematical background but some of the financial and economical theories and applications will have to be studied before entering a career path in corporate finance.

In conclusion, the decision of whether to take a CFA or MBA depends on the individual’s goals and career ambitions. For an engineer interested in management and business, an MBA is the better choice. However, if an engineer is considering a career in finance, the CFA may be the better option.