Becoming a pro: MBA vs. CFP, CPA or CFA?

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When Jaime Campbell comes to the table to help a client business boost its revenue and market share, she brings an accounting and tax background plus a broad understanding of financial services and corporate acumen.

Campbell, director of specialized services for Bartolomei Pucciarelli, a New Jersey accounting firm, has that scope of knowledge because she’s a certified public accountant, or CPA, and holds a Master of Business Administration, or MBA, from Rutgers University.

“The CPA gave me access to my firm, my golden ticket in,” Campbell says. “My MBA helps me work with and understand my clients, and work with them to help grow their business.”

However, Campbell is more unique than commonplace. Many financial-services professionals choose to advance their careers with a certification or head back to college for a master’s degree.

Keith Hickerson, senior strategy consultant for The American College in Philadelphia, says often the decision comes down to what point you are in your career. “Either way, I think you need to continue learning,” Hickerson says.

This article examines three well-known certifications in financial services and compares the value and cost of each to a master’s degree.

Certified Financial Planner

Training for this certification zeroes in on learning how to advise individuals about investments, and financial and estate planning.

It’s a self-study program that requires most people to take six courses online or in the classroom, then pass a 10-hour, two-day final exam.

Jeff Nauta, a principal with Henrickson Nauta Wealth Advisors near Grand Rapids, Mich., says this is the premier certification to be able to guide people along the spectrum of financial planning decisions, including investing to pay for college and retirement.

“Even as an MBA who goes into financial planning … you are going to need the CFP for financial planning and advising,” says Nauta, who has CFP and CFA, or chartered financial analyst, certifications.

The cost of prep courses for the CFP credential is $4,500 to $5,000, Nauta says, unless you already have a law degree, or CPA or CFA certifications. That enables you to skip the six courses and go to the final exam. The exam, administered several times a year nationwide, carries a $595 fee.

Hickerson, who also holds the CFP designation, says the certification training is much more focused on financial planning than an MBA student would get in graduate school. It’s primarily designed for people who want to help individuals make investment decisions.

“If you want to provide investment advice or market investment products to individuals, either through an independent investment adviser, an insurance company or retail bank, this is the credential that separates the dilettantes from the experts,” says Roy Cohen, career coach and author of “The Wall Street Professional’s Survival Guide.”

Nauta says the biggest disadvantage for people with a CFP rather than an MBA is they don’t have “the networking value of the MBA,” meaning they can’t tap a university’s vast network of business school alumni to help advance their careers.

Certified public accountant

For accountants and auditors looking to climb the corporate ladder, securing the CPA license is one way to do it. The CPA gives you more specific training in accounting, auditing and taxation than an MBA degree, says Campbell.

“People with an MBA, they know business and they get what business is all about. They may or may not be numbers people,” she says.

To obtain the CPA license in the state you reside, you’ll need to meet educational and professional work experience requirements and pass the four-part Uniform CPA Exam, according to the American Institute of Certified Public Accountants, or AICPA.

In addition to passing the exam, 150 hours of college credit and two years of public accounting experience are required to become a CPA in most states, according to the AICPA website. The fees to take the four individual tests that comprise the AICPA Uniform CPA Exam are $1,000 or more, depending on your state.

Study programs to prepare for the tests cost from $1,050 to $3,245, according to Becker Professional Education, a provider of preparation materials. However, if you work for an accounting firm, it typically will pay the cost of preparation and testing, Campbell says.

She adds that there’s a great deal of work to keep your CPA license active, including continuing education and professional development requirements that vary from state to state to stay current on tax code and financial reporting rules.

“With the MBA, you earn it and then you have it the rest of your life,” Campbell says.

Chartered financial analyst

The CFA certification program has the reputation of being one of the toughest financial-services credentials to earn because of the high failure rate of its three six-hour exams. “There is no better designation to establish your credibility as a sell-side research analyst or a buy-side portfolio manager,” says Cohen.

The program study materials and tests delve deeply into investment portfolio management, Treasury bond and securities analysis, and economics.

Nauta says the CFA is “really like an MBA, but focused on investments.”

And the cost to become a CFA holder is less than the expense of getting an MBA degree or other financial-services certifications. Successful candidates spend 300 hours preparing for each of three exams, plus logging four years of qualified work experience.

You’ll pay $2,370, which includes a $420 one-time registration fee plus $650 each for the three exams, according to the CFA Institute. Test preparation materials cost from $349 to $1,399, according to Kaplan Schweser, a provider of study materials.

Nauta says he decided to pursue the CFA instead of an MBA degree because he didn’t want to take off work for two years for a full-time master’s program, and the certification program was less expensive.

He acknowledges that the CFA, like the CFP, can’t replicate the MBA’s networking pool, and in a big city or on Wall Street an MBA “opens doors for you.”

What it takes for financial certification

Certified Financial Planner

  • Prep work: A six-course program online or in the classroom.
  • Cost: $4,500 to $5,000 (estimated).
  • Test work: A 10-hour, two-day final exam.
  • Cost: $595.

Certified public accountant

  • Prep work: 150 hours of college credit and two years of public accounting experience in most states.
  • Cost: $1,050 to $3,245.
  • Test work: Four separate tests make the Uniform CPA Exam.
  • Cost: $1,000 or more, depending on your state including application, registration and exam fees.

Chartered financial analyst

  • Prep work: Study tools and practice exams. Successful candidates spend 300 hours preparing for each of three exams, plus logging four years of qualified work experience.
  • Cost: $349 to $1,399.
  • Test work: Three six-hour exams taken sequentially.
  • Cost: $2,370, including a $420 one-time registration fee plus $650 for each exam.