Given my unique situation, should I get a CFA or MBA first?

Question

I am currently entering my junior year at the University of Illinois and am majoring in finance. The finance program is tied for 10th overall for undergrads. I have a 3.65 GPA (was a little lazy last semester) but hope to (and I think I can) get it up to around a 3.8 when I graduate if I buckle down.

I plan on getting both a CFA and MBA at some point.

I think when I get my MBA may depend on how I do on the GMAT. I should have a decent undergrad profile, if I do well on the GMAT (we'll say 680+) I would have a real chance of getting into a top 15 business school, perhaps even a shot at some of the schools barely making the top 10. Seeing as these school don't usually accept applicants without work experience, I would work for 4 years and try to obtain my CFA in that time (minimum amount of time required to earn a CFA I think, given you need 4 years experience to become chartered, unless they count internships etc... but you get the picture). Hopefully applying with a CFA will also help my chances for admission.

If I receive a fairly average score on the GMAT, I may work and do a MBA part time at a decent school upon graduating, and do the CFA after.

Any suggestions? Keeping in mind the goal is to maximize future earnings potential and marketability in the field of finance.

Answer 1

I think you have really laid out your options very well. I got a 99% GMAT percentile, did my MBA from Wharton and saw many students with backgrounds similar to yours. Based on that I will suggest that you focus on getting work experience and CFA first and then apply for the MBA. To see why, let's walk backwards from your end goal:

In order to maximize your future earnings potential and marketability in the field of Finance, you will need to land a job is one of the following areas: Investment Banks (IPOs. M&As), Hedge Funds, Private Equity or perhaps even Venture Capital (most likely mid/late stage funds).

All of these employers hire almost exclusively from the top 10 MBA schools. So you MUST get into a top school - Harvard, Wharton, Columbia, Chicago etc. are the best hiring grounds for the finance industry. Harvard and Stanford are great for entrepreneurs and VC funds.

When you apply for admission at one of these schools, you will be competing with 100's of applicants with good-great GPA, which is considered a minimum requirement. What you need to convince the admissions committee is:

(1) How will you contribute better to the MBA class room experience than all other applicants

(2) How will you benefit the most from the MBA

(3) Will you bring some unique perspectives that other lack - divesity

One way of beefing up for this is by doing something outstanding in your job (as measured by leadership, outstanding intelligence, taking on great responsibility and executing brilliantly etc.) Another is to get international experience, learn foreign languages etc. Working for a non-profits is yet another avenue. Any of these, if done in a financial environment will bring great credibility to you. Obviously all of these require work experience.

Something other things that are considered a bonus/differentiator are social work, military service etc. You will need at least 3-4 years of this so it doesn't look like you just did a bit to add to your resume.

So basically you need work experience + time to build your resume, which can get you into a top MBA school, which in turn can help you maximize your earnings potential. In the mean time, you can also work on networking with other people, perhaps at your work place, who are MBAs from your target schools and get good recommendations, which are also a key admissions criterion.

Since you have this time, you might as well get a CFA. It will not only add one more shining item on your resume for your eventual job but will also exempt you from many mundane MBA core classes and allow you to take more advanced classes earlier.

Does this make sense to you? If not, feel free to drop me a note... and good luck! It's a long journey but totally worth it.

One more thing - don't go for that part time MBA. It ain't worth much unless you plan to continue with yor employer. Most self-respecting financial firms do not hire part-time MBAs... not being snooty here, just factual.