Q&A: Becoming a Chartered Financial Analyst

For those hoping to advance in the business world, the MBA degree has become practically a requirement. But those seeking an edge in the world of finance are increasingly considering a different kind of credential: the Chartered Financial Analyst (CFA) qualification. The CFA designation is considered the gold standard of the investment management field and those who have the credential are expected to have an in-depth knowledge of the investment industry, with many going on to careers as portfolio mangers or research analysts at hedge funds and private equity firms.

Obtaining the qualification is no easy feat; the self-study program takes several years to complete and participants must pass three six-hour exams, as well as agree to abide by a strict code of ethics and standards of conduct. About 180,000 people signed up for the CFA exams last year, and the average age of test takers was 30, according to the Chartered Financial Analyst Institute, a nonprofit organization that awards the Chartered Financial Analyst designation.

Increasingly, more business schools are incorporating aspects of the CFA curriculum into their programs, from undergraduate business programs to Master of Finance programs. As the designation becomes more well-known in the management education world, students are increasingly interested in pursuing the charter at a younger age, some even starting to study for the first level of the CFA exam while still in school, according to the CFA Institute. Others students get the CFA in conjunction with their MBA or their Master of Finance degree.

Bloomberg Businessweek's Alison Damast recently spoke with CFA Institute Managing Director Thomas Robinson, who oversees the education division, about the advantages of becoming a CFA and how studying to be one can help students gain an edge in the job market.

Alison Damast: An age-old question among those headed into the finance world is whether they need to obtain a CFA, an MBA, or both. Do you think there is a benefit to doing both?

Thomas Robinson: Whether you need to do both really depends on what you want to do. A lot of people looking at what to do with their life think is it one versus the other. I view the CFA and the MBA as being very complementary. The CFA is a very specialized credential that focuses really very deeply on 10 investment-related topics. If you want to analyze securities, or if someone wants to specifically work in the investment management area as an analyst or portfolio manager, then the CFA makes a lot of sense and that will get you through the majority of your career. The MBA is more of a generalist designation. You are not able to get as in-depth in the finance topics in an MBA program as in the CFA curriculum. But certainly for those who are in the running for a management position later in their careers, the MBA can be quite useful. I would generally recommend if you want to work in the investment field and ultimately want to end up in management that you start with your CFA, work for a few years, and then do the MBA.

What are some of biggest differences between getting an MBA or a CFA in terms of price and time?
A CFA program takes on average four years to get through, while an MBA program will take one or two years, depending on if you are full-time or part-time. The CFA is designed to be a self-study curriculum and it is something people do while working. It is also very economical. You can get through the CFA program spending less than $3,000. If you assume that you pass each exam on the first try and register in a timely manner, the total fees will be $2,300. Well, that's less than one course costs in most MBA programs.

Are you seeing more people expressing an interest in obtaining the CFA qualification in the last few years?
We were growing very rapidly up to the financial crisis, particularly in the Asia-Pacific region, and we expected a slowdown with the crisis and what was going on in the finance industry.

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