CFA	  vs	  MBA:	  The	  Eternal	  Debate	                  Binod	  Shankar	                  15	  April	  2010	  
CFA®	  PROGRAM	  	     Its	  a	  self-­‐study,	  graduate-­‐level	  program	  for	  investment	  professionals.	     	    ...
CFA®	  PROGRAM	     Relevance	          •  Prac@ce	  analysis	  to	  define	               curriculum	          •  Principl...
CHARTERED	  FINANCIAL	  ANALYST®:	  	    BENEFITS	  AND	  CAREERS	                                                        ...
TOPIC	  AREA	  WEIGHTS:	  A	  GUIDE	      Topic	  Area	                                                Level	  I	         ...
FRESH	  CURRICULUM	     	     •      The	  curriculum	  is	  reviewed	  regularly	  through	  a	  Global	  Prac@ce	  Analy...
STEPS	  TO	  EARN	  A	  CFA®	  CHARTER	           1	     Sequen@ally	  pass	  level	  1,	  2,	  and	  3	  examina@ons	    ...
MBA	  BASICS	     	            •    MBA	  courses	  are	  highly	  varied	  in	  dura@on	  ,	  content	  etc.	  Typical	  ...
GETTING	  IN	  -­‐	  CFA®	  	     EASIER	  TO	  GET	  IN.	  BECOME	  A	  CANDIDATE:	  	     	     1.  Fulfill	  the	  entra...
GETTING	  IN	  -­‐	  MBA	  	     1.      London	  Business	  School	  (UK)	     2.      University	  of	  Pennsylvania	  :...
COST	  ANALYSIS	  –CFA®	  V/S	  MBA	    (All amounts in US Dollars)   	                                                   ...
HOW	  UNIQUE	  IS	  IT-­‐CFA®	        The	  CFA®	  charter	  is	  rare.	  The	  CFAI	  limits	  the	  number	  of	  CFA®	 ...
HOW	  UNIQUE	  IS	  IT	  -­‐	  MBA	  	     	     •  There	  are	  thousands	  of	  colleges	  	            issuing	  MBA	 ...
WHAT	  YOU	  GET	  -­‐	  CFA®	  	     •      A	  CFA®	  teaches	  hard	  skills	  and	  tests	  you	  on	  them.	  	     •...
WHAT	  YOU	  GET	  -­‐	  MBA	  	    •         An	  MBA	  teaches	  sow	  skills.	  	    •         MBA	  courses	  offer	  a...
THE	  FUTURE	  OF	  ASSET	  MANAGEMENT	     •      Past:	  the	  money	  came	  from	  the	  Middle	  East	  but	  was	  m...
DO	  MBAS	  MAKE	  BETTER	  LEADERS?	     •    As	  of	  2006,	  a	  full	  39%	  of	  all	  Fortune	  500	  CEOs	  held	 ...
SO	  WHAT	  TO	  DO?	  wwww.genesisreview.com           18   Innovative Financial Education
SUMMARY/SOLUTION	     •    The	  MBA	  is	  difficult	  to	  get	  into	  but	  easier	  to	  pass	  out	  of.	  The	  CFA®	...
Thank	  You!	  Binod	  Shankar	  CFA	  Genesis	  Ins@tute	               	  Knowledge	  Village	               	  Block	  ...
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CFA vs MBA the eternal debate!

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It has been an eternal debate whether one should take MBA or do CFA. Binod Shankar, CFA, Managing Director of Genesis Institute explains the advantages and features of each.

Transcript of "CFA vs MBA the eternal debate!"

  1. 1. CFA  vs  MBA:  The  Eternal  Debate   Binod  Shankar   15  April  2010  
  2. 2. CFA®  PROGRAM     Its  a  self-­‐study,  graduate-­‐level  program  for  investment  professionals.     •  Level  I  –  Knowledge  and  comprehension  of  fundamental  investment  tools   and  concepts   •  Level  II  –  Applica@on  and  analysis  focused  on  asset  valua@on   •  Level  III  –  Synthesis  and  evalua@on  of  client  needs  and  porColio   management  issues     Ethical  and  professional  standards  are  emphasized  at  every  level.    wwww.genesisreview.com 2 Innovative Financial Education
  3. 3. CFA®  PROGRAM   Relevance   •  Prac@ce  analysis  to  define   curriculum   •  Principles  relevant  in  every   market  around  the  world       Rigor     •  Work  experience  requirement   (4  years)   •  Only  19%  complete  the  en@re   3-­‐exam  program   •  Great  equalizer       RecogniLon   •  CFA®  Charter  recognized   globally      wwww.genesisreview.com 3 Innovative Financial Education
  4. 4. CHARTERED  FINANCIAL  ANALYST®:     BENEFITS  AND  CAREERS   Most  common  occupa@ons  of  CFA®   Higher   charterholders:   CompensaLon       •  CEO/Principal   Access  to  Global   InternaLonal   •  Chief  Investment  Officer   Network     RecogniLon   •  Investment  Counselor   •  Investment  Firm  Manager   Knowledge  with   •  PorColio  Manager   Respect     Global   •  PorColio  Strategist   PerspecLve   •  Equity  Analyst   •  Fixed  Income  Analyst   Credibility   •  Investment  Banker      wwww.genesisreview.com 4 Innovative Financial Education
  5. 5. TOPIC  AREA  WEIGHTS:  A  GUIDE   Topic  Area   Level  I   Level  II     Level  III   Ethical  and  Professional  Standards     15   10   10   Quan@ta@ve  Methods   12   5-­‐10   0   Economics   10   5-­‐10   0   Financial  Repor@ng  and  Analysis   20   15-­‐25   0   Corporate  Finance   8   5-­‐15   0   Investment  Tools   50   30-­‐60   0   Equity  Investments   10   20-­‐30   5-­‐15   Fixed  Income  Investments   12   5-­‐15   10-­‐20   Deriva@ves   5   5-­‐15   5-­‐15   Alterna@ve  Investments   3   5-­‐15   5-­‐15   Asset  ValuaLon   30   35-­‐75   35-­‐45   PorTolio  Management  and  Wealth  Planning   5   5-­‐15   45-­‐55   Total   100   100   100  wwww.genesisreview.com 5 Innovative Financial Education
  6. 6. FRESH  CURRICULUM     •  The  curriculum  is  reviewed  regularly  through  a  Global  Prac@ce  Analysis   •  On  an  annual  basis,  the  curriculum  is  reviewed  to  test  whether  it  reflects  the   knowledge,  skills  and  abili@es  required  of  an  investment  prac@@oner  with  4  years   of  experience   •  This  review  is  done  by  groups  of  employers,  experts  and  also  based  on  a  survey  of   CFA®  charterholders   •  As  examples,  Private  Wealth  Management,  Behavioral  Finance  and    Private  Equity   were  all  added  in  the  last  2  years     •  This  focus  on  keeping  the  curriculum  fresh  makes  a  charterholder  much  more   aware  of  business  reality  and  definitely  increases  his  value    wwww.genesisreview.com 6 Innovative Financial Education
  7. 7. STEPS  TO  EARN  A  CFA®  CHARTER   1   Sequen@ally  pass  level  1,  2,  and  3  examina@ons   2   At  least  4  years  of  investment  profession  experience   3   Join  CFA  Ins@tute  as  a  regular  member   4   Apply  for  membership  in  a  CFA  Ins@tute  Society  (CFA  Emirates)   5   Comply  with  CFA  ins@tute  condi@ons,  requirements,  policies  and  procedures  wwww.genesisreview.com 7 Innovative Financial Education
  8. 8. MBA  BASICS     •  MBA  courses  are  highly  varied  in  dura@on  ,  content  etc.  Typical  dura@on  ranges   from  1  to  2  years   •  Year  1  at  Harvard  MBA  (Finance)  covers  :  marke@ng,  opera@ons  mgt,  OB,   financial  repor@ng,  strategy,  leadership   •  Year  2  covers  :  Value  inves@ng,  consumer  finance,  financial  markets,  strategic   finance,  investment  management,  private  equity,  real  estate,  venture  capital   •  MBA  is  a  broad  course  and  its  not  very  deep  or  technical    wwww.genesisreview.com 8 Innovative Financial Education
  9. 9. GETTING  IN  -­‐  CFA®     EASIER  TO  GET  IN.  BECOME  A  CANDIDATE:       1.  Fulfill  the  entrance  requirements.  At  the  @me  of  enrollment  you  must:     •  Have  a  U.S.  bachelor’s  (or  equivalent)  degree   Or  be  in  the  final  year  of  your  bachelors  degree  program   (Note:  educa@on  informa@on  must  be  updated  before  progression  to  Level  II)   Or  have  four  years  of  qualified,  professional  work  experience   Or  a  combina@on  of  work  and  college  experience  that  totals  at  least  four  years.   (Note:  summer,  part-­‐@me,  and  internship  posi@ons  do  not  qualify)     •  Meet  the  professional  conduct  admission  criteria  (during  the  applica@on  process,  you   will  be  asked  to  sign  statements  of  Professional  Conduct  and  Candidate  Responsibility)   •  Be  prepared  to  take  the  exams  in  English     2.  Sign  up  for  your  first  exam.  Registering  for  the  first  exam  also  enrolls  you  as  a  candidate  in   the  CFA®  Program.  This  requires  a  one-­‐@me  program  enrollment  fee  in  addi@on  to  the  exam   registra@on  fee.      wwww.genesisreview.com 9 Innovative Financial Education
  10. 10. GETTING  IN  -­‐  MBA     1.  London  Business  School  (UK)   2.  University  of  Pennsylvania  :Wharton  (US)   3.  Harvard  Business  School  (US)   4.  Stanford  University  (US)   5.  Insead  (France/Singapore)   6.  Columbia  Business  School  (US)   7.  MIT  Sloan  School  of  Management  (US)   8.  University  of  Chicago:  Booth  (US)   9.  IESE  Business  School  (Spain)   10.  Indian  School  of  Business  (India)     Conclusion:  Incredibly  difficult  to  get  in.    Requires   proper  qualifica@on  +  related  work  experience   +    a  very  good  GMAT  score  (  700  +)         Source:  FT  Global  MBA  Rankings  2010  wwww.genesisreview.com 10 Innovative Financial Education
  11. 11. COST  ANALYSIS  –CFA®  V/S  MBA   (All amounts in US Dollars)     CFA®   MBA  from  a  top  school       Registra@on  and  exam  fees  for  all  3  levels:    2,000         (assuming  you  pass  in  the  first  aoempt)   Total  esLmated  cost        :  100,000   Prep  course  fees                      :  10,000       vs This  excludes  the  cost  of  travel  to  home  and  back.   Total  cost                      :  12,000   Also  excludes  the  cost  of  not  working  for  2  years!          wwww.genesisreview.com 11 Innovative Financial Education
  12. 12. HOW  UNIQUE  IS  IT-­‐CFA®   The  CFA®  charter  is  rare.  The  CFAI  limits  the  number  of  CFA®  charterholders.  Even  a^er  40  years,   there   are   just   78,000+   charterholders   globally!     In   2009,   6,628   people   got   the   valuable   CFA®   charter       GET  DISTINGUISHED!!    “Whereas  there  are  tens  of  thousands  of  finance  degrees  available  around  the  world,  ranging  from  the  excellent  to   the   worthless,   there   is   only   one   CFA®,   managed   and   examined   by   an   American   associa@on   of   financial   professionals,  the  CFA  Ins@tute.  It  used  to  be  just  an  American  qualifica@on.  But  explosive  growth  has  made  it,  in   effect,  global  currency.” -­‐    The  Economist,  26  Feb-­‐4  Mar  2005                       “The   big   aorac@on…is   [that]   the   CFA®   [charter]   qualifica@on   becomes   a   second   passport,   an   interna@onal   gold   standard.” -­‐  Financial  Times,  22  May  2006      wwww.genesisreview.com 12 Innovative Financial Education
  13. 13. HOW  UNIQUE  IS  IT  -­‐  MBA       •  There  are  thousands  of  colleges     issuing  MBA  degrees     •  There  are  part-­‐@me  MBAs,     Execu@ve  MBAs.  Even  online  MBA   degrees     •  The  best  colleges  are  of  course  unique   •  George  Bush  had  an  MBA   from  Harvard!  wwww.genesisreview.com 13 Innovative Financial Education
  14. 14. WHAT  YOU  GET  -­‐  CFA®     •  A  CFA®  teaches  hard  skills  and  tests  you  on  them.     •  The  CFA®  goes  deep  and  trains  you  to  be  very  good  at  specific  jobs.  Such  as   research  &  asset  management.  CFA®  is  hard  core!     •  A  CFA  is  an  excellent  route  into  asset  management.  The  CFA®  is  of  huge   importance  in  the  asset  management  industry   •  Each  of  the  three  CFA®  exams  requires  250  hours  of  study  in  your  own  @me.  That   shows  true  commitment.     •  A  CFA®  provides  the  tools  to  develop  crea@ve  solu@ons  to  complex  financial   problems      wwww.genesisreview.com 14 Innovative Financial Education
  15. 15. WHAT  YOU  GET  -­‐  MBA     •  An  MBA  teaches  sow  skills.     •  MBA  courses  offer  an  introduc@on  to  financial  theory   •  An  MBA  is  more  broad  than  it  is  deep.  It  gives  you  a    big  picture  view   •  An  MBA  doesn’t  go  deep  into  investment  valua@on,  analysis  or  porColio   management  like  CFA®   •  An  MBA  is  more  for  investment  banking  or  business  in  general.  Its  the  standard   educa@onal  background  on  Wall  Street     •  An  MBA  offers  contacts  and  networking   •  An  MBA  gives  you  a  pres@gious  brand  name  to  market  yourself  with      wwww.genesisreview.com 15 Innovative Financial Education
  16. 16. THE  FUTURE  OF  ASSET  MANAGEMENT   •  Past:  the  money  came  from  the  Middle  East  but  was  managed  by  asset  managers  in  the  US   and  Europe     •  Current:  Money  s@ll  comes  from  the  Middle  East  but  increasingly  managed  in  the  Middle   East:     ü  ABU  DHABI  INVESTMENT  AUTHORITY   ü ABRAAJ   ü  ABU  DHABI  INVESTMENT  COUNCIL   ü INVESTMENT  CORPORATION  OF  DUBAI   ü  KUWAIT  INVESTMENT  AUTHORITY   ü DUBAI  INVESTMENTS   ü  QATAR  INVESTMENT  AUTHORITY   ü DUBAI  INTERNATIONAL  CAPITAL   ü  EMIRATES  INVESTMENT  AUTHORITY   ü INVEST  AD   ü  MUBADALA   ü NATIONAL  BANK  OF  ABU  DHABI   ü  STARLING  GROUP   ü MASHREQ  BANK   ü  ISTITHMAR   ü SHUAA  CAPITAL   ü  ITHMAR   ü RASMALA  INVESTMENTS     IMPLICATION:     MORE  LOCAL  FUND  MANAGEMENT=  MORE  DEMAND  FOR  FUND  MANAGERS=  MORE  DEMAND   FOR  CFA®  CHARTERHOLDERS!      wwww.genesisreview.com 16 Innovative Financial Education
  17. 17. DO  MBAS  MAKE  BETTER  LEADERS?   •  As  of  2006,  a  full  39%  of  all  Fortune  500  CEOs  held  an  MBA,  with  62%  holding   some  kind  of  advanced  degree   •  But  you  may  be  shocked  to  learn  that,  based  on  a  2006  study  from  BusinessWeek,   shareholder  returns  of  companies  led  by  CEOs  with  MBAs  were  significantly  worse   than  of  those  led  by  non-­‐MBA  CEOs   •  Look  at  business  leaders  such  as  Jeff  Bezos  at  Amazon.com  (Nasdaq:  AMZN),  Fred   Smith  at  FedEx  (NYSE:  FDX)   •  You  quickly  realize  that  being  an  excellent  CEO  has  almost  nothing  to  do  with   having  an  advanced  degree  from  a  top  business  school!  wwww.genesisreview.com 17 Innovative Financial Education
  18. 18. SO  WHAT  TO  DO?  wwww.genesisreview.com 18 Innovative Financial Education
  19. 19. SUMMARY/SOLUTION   •  The  MBA  is  difficult  to  get  into  but  easier  to  pass  out  of.  The  CFA®  is  far  easier  to   get  into  but  undeniably  tough  –only  19%  get  the  Charter   •  MBA  is  far  more  expensive  and  requires  full  @me  study.  CFA®  offers  incredible   value  for  money  and  can  be  completed  on  a  part  @me  basis   •  CFA®  is  an  essen@al  qualifica@on  in  asset  management  and  research.  MBA  is  more     prominent  in  investment  banking  &  general  business   •  Whether  you  should  seek  a  CFA®  ,  an  MBA,  or  both  has  everything  to  do  with  your   professional  goals    It  all  depends  on  each  student  and  what  he  or  she  would  like  to  do  wwww.genesisreview.com 19 Innovative Financial Education
  20. 20. Thank  You!  Binod  Shankar  CFA  Genesis  Ins@tute    Knowledge  Village    Block  8,  Office  F19,  Dubai,  UAE    T  :  +971  4  438  0267      E:  bshankar@genesisreview.com  www.genesisreview.com  

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