CFA: Chartered Financial Analyst®
CFP: Certified Financial Planner™
MBA: Master of Business Administration
Next Gen: Let’s start today with some background. Who are you and what do you do?
Dylan: I am a Senior Relationship Associate within the Multi-Family Office group. I assist in the day-to-day of client accounts, including asset allocation, cash management, and account management. I am a CFP. The CFP designation is a holistic financial planning designation consisting of five subject areas: investment planning, retirement savings & income planning, tax & estate planning, risk management & insurance planning, and financial psychology. The CFP Board also emphasizes your duty to clients and maintenance of strong ethical principles.
NG: Boosting your credentials is a great way to expand your skills and your network. What drove your decision to pursue each program?
Tom: At a high level, I have always been a believer in getting the best education you can. It is something I knew I would never regret, and I was willing to devote time to it. After graduating from undergrad (Trinity College) I was working in finance but was very green. The CFA program seemed like an ideal way to broaden and deepen my knowledge base. I also hoped that passing a few levels of the CFA would show my commitment to a career in investing and potentially open up job opportunities. Competition in finance was fierce in the years prior to the financial crisis, so anything you could do to get a potential employer to look at your resume was worth it.
I always knew that I wanted to go back to business school, but I was not sure when I would do it. My decision got a lot easier in 2008. New jobs dried up and it seemed like the ideal time to spend two years back at school. My advice would be to work for three to five years before pursuing an MBA. When I went to school, the average full-time MBA student was 28-30 years old.
Dylan: I was first drawn to the CFP program because it is a well-rounded financial designation. Instead of focusing solely on investment planning or insurance, the CFP covers most of the important areas of financial planning. When I decided to pursue the CFP, I was a couple of years out of college in my first job working as a retirement plan administrator for a regional bank. This role was very specialized and required a lot of dedication to compliance and operational tasks. I viewed the CFP as a way to open a door to a role that would involve a broad array of topics and help me get the exposure necessary for the client-facing role I was looking for.
NG: I’m sold! What are the logistics one should know before diving in?
Tom: For the CFA, there are some basic requirements around level of education and/or work experience, but other than that, you can start early, even while completing your final year of college.
Some MBA programs will accept undergraduates directly, but most top tier full-time programs require several years of work experience. Students will get more out of an MBA if they come in with work experience. It gives them a better idea what they want to do with their career and to contribute to their class.
Dylan: The structure of the CFP program varies, but the path I pursued consisted of six courses, a capstone, and an exam. There is also an experience requirement that candidates can satisfy in 2-4 years depending on their role. I am required to do 30 hours of continuing education on a bi-annual basis as well as participate in mandatory ethics refreshers.
NG: Obviously an extensive commitment. Do you have any advice on how to manage studying while holding down a full-time job?
Tom: I considered a part time/evening MBA at first, but eventually decided to go back to school full time mostly for this reason. Most part time MBA programs take 3.5-4 years to complete, all while working, which can feel like a lot. You need an employer that supports you in pursuing an MBA if this is something you are interested in.
As for the CFA program, I believe it has more benefit to your career the earlier you do it. What you learn are things you’d likely learn in 10-15 years of work experience. So, if you are already well into your career, the benefit is not as great.
Dylan: Time management is key. And you may need to make small sacrifices to get ahead of the pack. During the workday, I would squeeze in review time or flip through a learning module while I ate lunch. I would dedicate time each night, an hour or two, to make sure I was getting sufficient review time. Towards the end of the program when I was prepping for the exam, I dedicated time every day to study, including weekends, but this was a short sprint over a month or two.
NG: Obtaining your CFA and CFP are a great way to differentiate yourself to employers and clients. How did your career change after receiving the designation?
Tom: I was much more confident about the nuts and bolts of investing after passing the CFA. This wasn’t the reason I pursued it, but I think it helped indicate to business schools that I was serious about a career in investment management, and I also think it probably showed my commitment and depth of knowledge to BBH when I applied after school.
Dylan: I learned a lot of important concepts through the CFP program that I would not have ever learned on the job. Areas of estate planning and insurance planning, for example, were very foreign to me. Understanding these concepts allowed me to confidently seek out positions where these topics would have direct implications for clients. Shortly after passing the exam, I applied to BBH. The designation proved useful in my conversations with clients and experienced colleagues. I like to say the CFP helps you close the experience gap. Nothing can replace actual experience, but it helps you to gather some of the knowledge that could take years to gather in the industry in a more natural way.
NG: Tom, since you pursued both the CFA and MBA, can you discuss some of the key differences between each?
Tom: An MBA is very different than the CFA. The CFA is really for investment management professionals. The curriculum is centered around accounting, equity research, fixed income research, and wealth management. If you have passed the CFA, it tells employers you can come in and hit the ground running in an investment position.
An MBA is an opportunity for further study, to broaden your network, to try an internship in a new field, and to be more thoughtful about your post MBA career. Some elements of the MBA are similar to the CFA in that they allow you to accelerate your career growth. However, the average MBA candidate is older than the average CFA candidate. The certifications are not mutually exclusive, but for those that do both, the CFA almost always comes first.
It’s also worth noting, the MBA can be a funnel for many top employers. Employers believe that admission departments do a good job screening out the best candidates. For some careers, like management consulting, an MBA is a must have. Even early career management consultants must go back to get an MBA if they want to rise to the top of the ranks as a premier management consultant. I would highly recommend that those interested in an MBA look at the post-MBA career stats for their target schools. What percentage of graduates have a full-time job six months after graduation? What industries and employers hire from the school? What is the average starting salary?
One of the most cherished benefits of an MBA is the network you build. For those that find “networking” events awkward, you can build a great network going to class, working on consulting projects, and just hanging out with your talented classmates. MBA students are all there for the same reason and most enjoy forming deep relationships with those in their class.
NG: What advice would you give to those thinking about pursing a CFA, MBA, or CFP?
Tom: Don’t just do it because you think you should. There are real benefits from both paths, but you should know what you hope to get out of it.
For the CFA program, which is entirely self-study, if you aren’t serious about it, you won’t pass. The passing rates are low. For an MBA, you may change your mind about what you want to do while there, but it is an expensive two-year endeavor so make sure you have plan for why you are there. Also, you will learn a lot in class while doing an MBA, but a large portion of the value you get comes from what you do outside class, such as networking, job hunting, and student run clubs. While you should obviously try to do your best in your courses, it’s worth noting that some top business schools don’t even release student grades. Getting the most value from an MBA requires spending time in and out of the classroom.
Dylan: Take some time to consider why you are pursuing this extra education. Are you targeting a particular role? Career change? Expanding your network? The answer to these questions can be very helpful in determining which is right for you. I also recommend spending some time figuring out how much of a commitment you are comfortable with.
I was able to complete the CFP program, from education to exam, in about a year. An MBA can take over two years. The CFA program can take more than three years depending on how you pace it and if you are able to pass each level on the first attempt. Having a realistic expectation of what you are getting into will greatly increase your chances of completing the program and earning the designation or degree you have worked so hard for.
NG: Thank you both for your time and insight.
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