It’s not a question of which one is better. It’s a question of which one is better for you. Traditionally, the CPA would lead to a career as a CFO; a CFA was on the path to become a portfolio manager; and a MBA would eventually become a corporate executive. This notion still holds today, however, achieving one of these certifications no way guarantees success.
Deciding which certification to pursue is usually made subconsciously. In our daily lives we read, talk and listen to friends, family and colleagues. Based on these interactions, we develop a superficial understanding on which certification to pursue. After much career and soul searching, I've come to realize that the most important question to ask before choosing a path is “what do I want to do?”
Do I want to be a CFO of a hedge fund?
Do I want to be a portfolio manager at a hedge fund?
Do I want to be a managing director at a private equity firm?
Do I want to be VP of business development at a corporation?
Now this might seem easy, but in reality it’s difficult. It’s difficult to verbalize why you want to pursue a particular career. My advice is follow the work, not the money. Regardless of the risks or the sunk costs, pursue your passion.
The Certified Public Accountant certification is a benchmark credential. It carries stature, significance and job security. In economic booms or busts, accountants are always needed. The more personable and diligent you are, the more success you will achieve.
Accounting is the basis of business. And being an expert in accounting gives you a unique business perspective that your other friends and colleagues might not possess. However, the thing I have come to realize is that once you’re labeled an accountant, you may be an accountant the rest of your life. It’s incredibly difficult to make the switch into a different career path within the business world (when I say business world I mean hedge fund analyst, private equity associate, business development).
My opinion on the matter might be affected by the economic environment in which I recruited. It is difficult to switch careers in a bear market. Ultimately though, my conclusion is drawn from the countless interactions with professionals throughout my recruitment process. Every time I would talk with head-hunters, recruiters, HR and interviewers, it would become apparent that they just wanted a two year analyst from an I-bank or consulting firm. My two years at PwC didn’t mean a thing to anybody. They would always tell me of a great job in the middle or back office and convince me that was the best role for me.
I am not a Chartered Financial Analyst charter holder. So I cannot express the opportunities that have or have not presented themselves as a result of the CFA charter. However, as a individual who has passed all three levels, no unique opportunities have appeared. No special career doors have opened. When I was recruiting, I had completed two levels of the CFA exam and it was thought more of a differentiation than a value added credential. I am interested to know what the future holds once I become an official CFA charter holder.
After talking with many people and seeing it first hand, I am convinced the only sure way to change career paths and make it to the top echelon of finance, without a background in investment banking or strategy consulting, is to attend a top 10 MBA school. Of course, you can get great finance jobs through other methods (that’s what I’m hoping to do) but this way seems most certain.
So if you want to work in an investment role at a private equity or at a hedge fund, and are not an investment banker or strategy consultant, I highly recommend crushing the GMAT (above 700) and going to a top 10 MBA school.
I have merely outlined my insight based on experience, which I hope can help you better decide which certification path to follow. Remember though that no path is certain nor on a straight line.