Question of the week
A 3rd year Economics student has reached out recently, he is keen to break into the financial industry and is wondering whether he should target a CPA designation after graduation or start preparing for his CFA level one exam.
CFA vs CPA vs MBA
My advice is first consider your career goal and identify the specific job roles of interest before making a decision. If you are looking to work in a front office position at an institutional investment bank upon graduation, the CFA is probably a better bet.
The CFA program focuses on a range of technical subjects such as quantitative methods, economics and financial reporting and analysis. To receive your final designation, you must possess work experience that involves investment decision-making. According to a recent research conducted by EFinancialcareers.com, the highest percentage of CFA holders work on the buy-side in positions such as Portfolio Manager and Research Analysts. To get into this field, you should target sell-side graduate programs within front office.
Nowadays an increasing number of students are preparing for their CFA level one exams while studying at the university. This is all very impressive, although given the prep time for CFA level one is over 100 hours, your time is better spent networking if your ultimate goal is to land on a full time /internship position. I would recommend getting some relevant work experience prior to writing the CFA level one exam, so you can better understand the topics covered and effectively apply what you learned from the program.
From my experience, almost all students who landed on banking roles have yet to complete their level one exams at the time of their placements. When it comes to campus recruitment, relevant work experience and a practical sense of the financial markets most definitely will win over any types of qualification. Meanwhile students from other disciplines outside of Business and Economics, can take the CFA to show their interests and commitment to the financial industry.
The CPA program requires a three year commitment, you are most likely going to be working at a Big Four or in an accounting function to gain the required work experience for your designation. Potential exit opportunities include: finance/middle office positions within an institutional investment bank eg rroduct and finance controller & risk management. You may be considered for roles in equity research and investment banking within mid market firms in your earlier part of your career, if you possess strong knowledge of a certain industry eg real estate, technology and natural resources etc. Corporate strategy is also a popular area to get into.
MBA is great for candidates who are looking to re-brand and network, to break ultimately break into financial services as a career change. Most organizations would prefer an undergraduate with strong technical skills and relevant experience than a fresh MBA graduate with little technical knowledge and industry exposure.
To further explore career options that best suit your interests and skillset, please get in touch for an initial conversation!