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Thank you for your help in building out this valuable ressource. Results will be send Quarterly from Q4 2013.
ONLY FOR CFA CANDIDATES & CHARTERHOLDERS
ONLY FOR CFA CANDIDATES & CHARTERHOLDERS
Before the results publication, here are some few thoughts about the potential
impact of a CFA Designation on your Salary and Career
One of the questions most new CFA candidates have is what impact will this credential have on my salary, my income and my prestige? What is being attempted in this blog is to evaluate the competitive advantages of the CFA program. A simplistic answer is the CFA is not a magic carpet that will carry your effortlessly to success any more than an MBA will automatically give you a successful career. Your right to claim a bit of respect in a new job interview is almost automatic with either a CFA or an MBA. The difference is that all CFAs are created equal; the designation is bestowed on successful candidates by the CFA institute. They demonstrate that you have successfully completed all the requirement of the institute to be designated a "Chartered Financial Analyst". An MBA from Wharton or Harvard is not the same as an MBA from Podunk University. The prestige and value of an MBA degree is closely related to the university that bestowed the degree and it prestige. It should be noted that the author of this blog holds both an MBA from the Stern School of Business and a CFA. The MBA was earned first and the CFA four years later. The impact of the CFA was negligible in terms of promotion or career in the experience of the author. He also found far more variety and depth in the MBA educational experience. There was virtually no material in CFA program that was not covered by his MBA in Finance.
· The objectives of this articles are to identify the income impact of gaining a CFA designation
· There is also an element of comparison of the intellectual experience of gaining a CFA and gaining an MBA
· Finally there is the question of the desirability of the CFA and the MBA in terms of career opportunities and income potential.
A Comparison of the CFA and MBA programs on income
According to the CFA Institute the salary of a CFA holder with less than one year of experience after receiving the CFA is slightly over $50,000. A CFA with a few years of experience after receiving the designation is probably at least in the low $60,000 area. The average salary of MBA's varies widely depending on the university from which the degree was earned and the particular areas within the MBA program being considered. The Schulich School of Business of York University located in Toronto Canada published a detailed summary of MBA and IMBA (International Master of Business Administration) salaries of graduates in 2012. Their results were presented by industry. The most popular industry in their rankings was financial services and banking where the average graduate earned $86,000. The lowest salary for a Schulich graduate in finance was $65,000 and the highest was $145,000. By way of comparison, the median salary for a 2012 Harvard MBA in finance was $125,000. The other element of comparison was the average expense of securing a Harvard MBA was $91,200, something slightly more than 60 times the average direct costs of a CFA designation.
The other area of comparison is that the CFA program absolutely requires four years of related experience while there is no similar requirement in most MBA programs. Most college graduates in the financial area are already earning something close to or in the $50,000 area. There is the implication in possessing a CFA that the holder already has at least four years of related experience. This makes the concept of a "new CFA" an illusion. This in turn makes the $50,000 salary of a "new CFA" a sort of illusion. What this does further is make the concept of salary comparison between the new CFA holder and the newly graduated MBA an illusion. It is entirely possible for a new CFA to have had years of related work experience and earnings well above those of even the new Harvard MBA recipient.
The CFA program is tightly focused on the selection of investments in general and securities investment in particular. What the comparison of an MBA with a CFA actually is the difference between a specialist and a generalist. CFAs with high rank in the corporate hierarch are certainly not unheard of, but generally are not in the corner office. Rather they are most likely to hold positions such as Chief Financial Officer or Treasurer as opposed to Chairman of the Board or Chief Executive Officer. The Chairman and CEO of most companies earn far more than the Chief Financial Officer or the corporate treasurer.
The typical MBA program involves considerable emphasis on management and strategic planning. There are almost invariably courses on organizational behavior, negotiation, marketing, economics including international economics and at least some basic accounting. The MBA program involves two years out of your life compared to roughly six months of study outside of business hours while working for each of the three exams. Without any implications concerning the nature of many university situations the basic difference is that there is essentially no way to cheat on the CFA program.
The other important consideration in terms of the salary impact of a CFA is that the CFA is probably already a college grad with four years of on the job training in financial industry. It is probably the case that CFA candidate is already making $40K plus. This implies that there is not likely to be an immediate impact on candidate earnings. It is not unheard of that a candidate will receive some recognition of attaining the certification. It should make it clear, especially in the situation where the candidate has no university degree that he or she has through on the job training and outside study made him or herself essentially the equivalent of a university graduate. It is an excellent approach to leveling the playing field in a situation where the candidate lacks a university degree, but actually has knowledge and expertise in the financial field that is equivalent to that of the university graduate.