Is the CFA Program the New MBA or Master's in Finance?
An article in Business Because asks that question, and I think generally does a good job addressing it. I add to the discussion with my own thoughts and a minor quibble with the original article.
Will the CFA program become the new MBA? No - they address two different markets. The CFA program is much more specialized in Finance whereas the MBA offers a general management background that is more useful across the spectrum of business.
Will the CFA program become the new Masters in Finance? In a way it already has. The UK National Academic Recognition Information Centre (UK NARIC) has benchmarked the CFA Program and the CFA charter as comparable to a Qualifications and Credit Framework (QCF) Master's Level 7, which means that for purposes of employment in the UK any position that requires a master's in finance can be met by having the CFA charter.
In some ways, the CFA charter is preferable to a Master's in Finance, as it is a consistent measure, whereas the quality of university education can vary widely. That means of course that some master's degrees will indicate greater degree of competency than the CFA designation and others will not. For employers looking across a variety of designations, the CFA offers a consistent global benchmark that in many ways is more practical than trying to decide if a master's degree holder from the 53rd-ranked school is sufficiently qualified.
I take issue, however, with the article's assertion that "CFA exams are theoretical, whereas business school programs can look at the same topics from a practical approach by applying concepts into real capital markets situations — a case study method of learning." - there is plenty of theory taught in business schools, which often hire their professors based on the research they publish rather than the practicality of what they teach. The CFA program starts with a practice analysis that ensures that everything covered in the program (even theory) is grounded in its usefulness to the practice. Furthermore, every test question at Level II and Level III of the CFA program is asked within the context of a case study, providing that very link between theory and practice that the critic says is lacking.
In the end, however, what is important is that the investment profession be staffed with highly competent, ethical professionals. This can be accomplished through either the CFA program or a masters program.
Opinions expressed are those of the author, not those of CFA Institute.