What Is the Difference Between the CFA Certification and a Master’s in Finance Degree?

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For the most ambitious finance professionals, a bachelor’s degree alone can only take you so far. When it is time to move up the corporate ladder, you may find that you need an extra qualification to give your career a boost and set yourself apart from other candidates for senior-level roles. Often, financial specialists looking for pathways to advancement consider options like certification and graduate school. Either a professional credential or a specialized master’s degree can prove valuable. The biggest difference between these qualifications is the process of attaining them.

DegreeQuery.com is an advertising-supported site. Featured or trusted partner programs and all school search, finder, or match results are for schools that compensate us. This compensation does not influence our school rankings, resource guides, or other editorially-independent information published on this site.

The Requirements for Careers in Finance

Among the largest and most recognizable occupations in finance are financial analyst and personal financial advisor. For both of these roles, as well as numerous other financial specialist positions, the entry-level education requirement is only a bachelor’s degree, according to the United States Bureau of Labor Statistics (BLS). However, if you want to engage in certain financial activities or move up in your field, you may need a license, professional certification or graduate degree.

Licenses are generally required if you want to be able to buy or sell financial products, the BLS reported. For financial analysts, you would typically seek licensure through the Financial Industry Regulatory Authority (FINRA). However, you would not be expected to become licensed until after you are hired and have employer sponsorship for the licensing process. Personal financial advisors have different licensing needs that are dependent on the financial products they sell. You must comply with all regulations, including your state laws, that govern the trade of insurance policies, stocks, bonds and investment advice. You will also need to register with the Securities and Exchange Commission, if you work as part of a larger firm, or with your state regulatory board, the BLS reported.

When does certification or graduate school come into play? After getting your bachelor’s degree and acquiring a few years of work experience, you can attain professional certification. Becoming a Chartered Financial Analyst (CFA) can help you advance your career, the BLS reported. A Master of Finance degree is another way to set yourself up for career advancement, and while you can start working toward your graduate degree earlier than you could become certified, you will have to invest time, money and plenty of hard work into earning an advanced education.

Different types of professional certification are appropriate for different financial specialists. While the CFA is ideal for an experienced financial analyst, a personal financial planner would seek CFP certification, and accountants attain the CPA credential.

Attaining CFA Certification

The CFA Institute is the professional association behind the Chartered Financial Analyst credential. To seek CFA certification, you must meet education and experience eligibility requirements, which can include a bachelor’s degree and four years of professional work experience, though that experience does not necessarily need to be investment-related.

You must pass three challenging professional examinations to attain your CFA charter. These exams cover topics such as investment tools, asset classes, portfolio management and wealth planning and ethics and professional standards. Successfully preparing for these graduate-level tests requires more than 300 hours of study time apiece, the CFA Institute reported. Because candidates must devote so much time to studying for these tests, which are only offered at certain times of the year, achieving CFA certification is a four-year commitment. Test-takers use a variety of materials to prepare for the exams. While 75 percent of candidates studied from the CFA Program curriculum, 55 percent used non-CFA Institute preparatory materials in addition to or instead of the official curriculum. For many candidates, studying for CFA exams includes working on practice questions and problems, and 13 percent of candidates report joining a study group.

The CFA Institute also awards a Certificate in Investment Performance Measurement (CIPM) to finance professionals who pass a two-level sequence of exams. If you complete a free online program, you can earn the CFA Institute Investment Foundations Certificate.

Graduate Degree Programs in Finance

Graduate schools offer a couple of different options in the field of finance. While a Master of Business Administration (MBA) degree with a concentration in finance is the traditional option, it might not be the best. Employers are increasingly hiring graduates with the more specialized Master of Finance or Master of Science in Finance degree, according to U.S. News & World Report. One reason for this change is because MBA degrees have become more popular and stand out less now than they once did. Additionally, master’s in finance degrees equip students with the kind of targeted technical skills that many employers in the finance field are looking for in ways that broader MBA degree programs might not, according to U.S. News.

Often, graduate finance students are recent college graduates or have a couple of years of work experience when they start their degree. This trend of accepting students at the beginning of their careers allows students to get their education underway sooner, rather than waiting until they have cultivated at least three to five years of experience like most MBA students must do. Master of Finance programs can often be completed in just one year, according to U.S. News, but that year could be a whirlwind of technical coursework in subjects such as corporate finance, accounting, financial economics and statistics.

Graduates of Master of Finance degree programs often work as financial analysts in environments such as investment and commercial banks, consulting companies and accounting firms, according to U.S. News.

The Case for Certification and Graduate School

If you are conflicted whether to go for certification or a master’s degree, why not both? The two paths to advancement will both impress prospective employers. A graduate finance degree teaches advanced skills and prepares you for CFA exams, which further validate your skills.

It may be hard to believe, but earning your master’s degree in finance takes less time than completing the certification exams needed for CFA certification.

Additional Resources

What Is the Difference Between the CFA and CFP Certifications for Financial Specialists?

What Is the Salary Potential for Someone With a Finance Degree?

What Is the Difference Between a Business Degree and a Finance Degree?

What Is the Difference Between an MBA and a Master of Finance Degree?