Four Paths To A Career In Finance: CFA, MBA, CPA And CFP

“The world is your oyster” is a saying most young people hear. It’s highly optimistic and speaks of the abundant potential, the bounteous possibilities and the many divergent paths still available for them to take.

What may not be so obvious at first glance is that this stage in someone’s life can be terribly confusing. For instance, while it may be clear you want a career in finance, you can be unsure which path to take to get there. Should you become a chartered financial analyst and take a CFA course? Perhaps you should become a certified financial planner (CFP) instead.

In this article, you will learn about four different paths you can take toward a career in finance:

• Chartered Financial Analyst (CFA)
• Master of Business Administration (MBA)
• Certified Public Accountant (CPA)
• Certified Financial Planner (CFP)

There are many more options than these, but this write-up should be an excellent start.

Chartered Financial Analyst (CFA)

A CFA has expertise in investment management. CFAs commonly work on large-scale investment analysis for corporate employers or clients and hold roles such as:

• Investment analyst
• Portfolio manager
• Investment strategist
• Investment consultants
• Wealth manager

To become a charter holder, one should apply to and get accepted by the CFA Institute. This necessitates:

• Passing the CFA exams (Level I, II, and III)
• Satisfying qualified work experience requirements
• Submitting reference letters

To be allowed to sit for the CFA exams, you must have an international travel passport and be one of the following:

• Option 1: A bachelor’s degree holder
• Option 2: A college undergraduate student within 23 months of graduation from the date of taking the Level I exam, ensuring completion of the degree before attempting the Level II exam
• Option 3: Someone with investment-related experience, specifically a combination of 4,000 hours of work experience and/or higher education over a consecutive three-year (36-month) period by the date of registering for the Level I exam, without overlap allowed between education and professional work experience hours

Before, during or after sitting for your CFA exams, one must accumulate relevant (i.e., investment management-related) work experience. A total of 4,000 hours of qualified work experience accumulated within 36 months or longer is required.

The financial commitment for the CFA program is between $3,050 and $3,950, assuming one passes all three exams on their first try.

Note that the exams are highly rigorous, with only a 38% pass rate for the Level I exam. Currently, there are less than 200,000 CFAs globally.

Why CFA?

If you want a career in corporate or enterprise-level investment management, earn a CFA. Investment tools and asset valuation are at the core of the CFA curriculum, and roughly 90% of executives in investment management prefer CFAs.

CFAs also earn good money, with an average annual salary of $180,000.

Master of Business Administration (MBA)

An MBA is a degree certificate awarded to those who spent considerable time and effort studying business management, including financial management and investment. The MBA program equips professionals to tackle a diverse range of business challenges and opportunities.

MBA graduates typically have the following job titles, among others:

• Business manager
• Portfolio manager
• Financial analyst
• Strategist
• Consultant

Earning an MBA entails completing a master’s degree program, typically spanning 2-3 years, at a recognized university. There is no standardized MBA exam, and the pass rates and graduation requirements vary across institutions.

To get an MBA, you may spend approximately $80,000 to $125,000 in tuition and other fees, depending on your university and country.

An MBA is a valuable credential. That said, it is often not a mandatory requirement for business and finance roles.

An MBA’s real value lies in its versatility. Armed with an MBA, professionals are prepared for a broad spectrum of roles across different industries—be it marketing, finance or general management.

More than 100,000 MBA degrees are awarded annually, marking its popularity as a qualification among business and finance professionals globally.

Why MBA?

If you want a wide range of options and broad business knowledge, an MBA is the way to go. The MBA program provides comprehensive training in business concepts, preparing you for leadership roles in various sectors.

MBA graduates command an average salary of $107,000 annually.

Certified Public Accountant

The CPA professional designation signifies a mastery of accounting and finance. It’s a professional license that signals proficiency in financial reporting and regulation.

Those with a CPA license can work as an:

• Accountant
• Comptroller
• Financial manager
• Chief financial officer

To become a CPA, applicants must have a bachelor’s degree and complete 150 schooling hours. They must also clear four CPA exams; these exams have a pass rate between 53% and 64%.

The CPA exams are relatively affordable at $800. As businesses place an ever-increasing emphasis on accurate financial reporting, the CPA designation is gradually becoming a requirement for numerous roles in the industry.

There’s a vast community of CPAs, with nearly 700,000 in the United States alone and hundreds of thousands more if you count the CPAs in other parts of the globe. Indeed, the CPA designation is globally popular. However, this does imply how highly competitive the CPA profession is worldwide.

Why CPA?

The CPA license is for you if you want a career in accounting and finance, particularly roles concerned with financial reporting and regulatory compliance.

CPAs have an average annual salary of $70,000, but you can expect better pay the higher you go up the ranks.

Certified Financial Planner

A certified financial planner has the training and expertise to provide personalized financial planning advice and guidance. CFPs typically work as:

• Financial planners
• Investment advisors
• Financial consultants
• Wealth managers

To earn the CFP designation, candidates are required to:

Pass the CFP exam (which has a 62-66% pass rate)

Have a bachelor’s degree with coursework in financial planning

Accumulate 4,000 to 6,000 hours of practical work experience

It costs approximately $825 to obtain a CFP, and there are currently more than 200,000 CFPs globally.

Why CFP?

The CFP is for you if you want a career in personal financial planning.

You can assist your clients in estate planning, help them make sound investment decisions and advise them on many other things to help them save on costs, such as foreign currency exchange costs, and secure their financial future.

As a CFP professional, you can expect an average annual income of $80,000.

CFA, MBA, CPA, or CFP?

Should you become a CFA, MBA, CPA, or CFP? Consider finance and accountancy as a career as they have so much to offer. Here’s a final summary to help you decide.

A CFA designation is for you if you want to handle large-scale investment decisions for holding companies, corporations, financial institutions, and enterprises.

If you want to become an expert in the financial operations of a business, earn an MBA.

If you value precision in financial reporting, obtain a CPA license.

If you want to focus on personal financial planning, become a CFP.

Take your pick.