Tuesday, May 25, 2010

The MBA and the CFA


MBA students and professionals in financial services sometimes ponder getting a CFA, especially those in investment management, equity research or investment banking. They do so in the way they have sometimes considered adding a CPA or pursuing the MBA before they got it. In the recent environment of uncertainty, mentors and coaches have encouraged adding a CFA designation to make yourself known from the pack, to help brand you, or to demonstrate competence with prospective employers or even supervisors.

Pursuing a CFA is not a casual step. It requires time, discipline, focus, the ability to amass enormous amounts of information, and the skill in presenting cogent, insightful analysis. Similar to pursuing an MBA. So while students and professionals acknowledge the value of both, they wonder about the value, time and effort in pursuing both.

That's where the CFA Institute can assist. The institute is best known for being the organization that administers the CFA exam and sets standards and guidelines among CFA professionals. Allison Williams, Director of Diversity Outreach at the institute, is reaching out to those in under-represented groups in colleges, in business schools and via diversity partnerships to help them understand not only the value of the CFA, but what it takes to pursue it. They want to answer questions and raise awareness: What professions will likely require it going forward? For Consortium MBA's, how do you pursue both the MBA and CFA? Where do MBA and CFA studies overlap?

Williams and the institute have been instrumental in setting up partnerships with schools and organizations around the country. There are 118 partnerships in place, she says. They include ties to Consortium schools UVA, UNC, USC, NYU, Wisconsin and Cornell. Most recently, she and the CFA Institute agreed to support the Consortium and will be attending this year's Orientation Program in Orlando. The institute, she says, does not suggest the CFA is more useful or valuable than the MBA, but asserts that it helps MBA's enhance what they've already learned or plot strategies to pursue the CFA if they are interested.

MBA's "are already in study mode," she said, highlighting that they have the discipline and habits it takes to reach all three CFA Levels. In finance, some of the MBA/CFA courses of study overlap: economics, corporate finance, investment analysis, equity valuation, portfolio analysis, derivatives, etc.
Hence, Williams says their mission is to tell those from under-represented groups about the content of the exams and to show what they can do to achieve the certification, if they have the interest, time and discipline. They want to show those aspiring for the CFA how the MBA-CFA overlap can be used to an advantage. For example, an MBA student considering the CFA may want to take courses that will also help him/her prepare for the CFA, too. The three Levels of exams are widely known to be progressively difficult. The passing rate declines as a candidate approaches Level III. However, MBA immersion and depth of study help candidates be better prepared for CFA progression.

In some finance fields, just as they may do so with the MBA degree, employers are now either urging prospects to have the CFA or requiring them, especially in investment management or equity research. In investment banking and at private-equity groups, the CFA is not necessarily required, but is regarded as a badge of competence, a way to get inside the door or get promoted.
The institute also encourages networks and relationships between CFA professionals in chapters around the country with MBA students and professionals exploring the CFA. Williams says they want to pair MBA/CFA aspirants, including minorities and women in finance, with CFA professionals.

The Consortium Finance Network will explore sponsoring a webinar to allow Williams and colleagues at the institute to help MBA's decide if they should pursue a CFA, show the specific steps in achieving certification, and explain the contents of both the self-study work and the exam itself. She, also, wants to remind them of specific professions that will likely want to see both the MBA and CFA on the resume'.

For those interested in more, see http://www.cfainstitute.org/. Or contact Williams directly allison.williams@cfainstitute.org for more details about its diversity initiatives. CFN welcomes input about the planned webinar.

Tracy Williams

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