This month thousands of people around the world filed into examination centres to put themselves through the same agony: the CFA examinations at Levels I, II and III.
Historical data suggest that more than half of them are likely to fail at each stage of their attempt.
Those pass rates and the sheer complexity of what the students have had to study are beginning to confer a premium on the qualifications they receive.
Indeed, some argue that students who have completed all three levels and won the right to put the three letters CFA after their names and be called a chartered financial analyst have an advantage over those with an MBA.
“I think there might be a crossing point soon – I think the CFA in the financial industry might soon eclipse the MBA,” says Mark Shackleton, professor of finance and associate dean of postgraduate studies at Lancaster University Management School.
“The reputation of these two three-letter acronym programmes will go in different directions,” he adds.
Lancaster was so impressed by this trend that it recently launched a specialist master’s programme aimed at preparing students for CFA Level I.
The MSc Financial Analysis course is a full-time one-year programme that accepts 30 students a year with first class honours degrees in quantitative subjects, or a minimum GMAT score of 650. In the final term, Fitch Learning, an external specialist in financial education, provides coaching.
Even then, not every student is advised to sit the exam. Globally, a quarter of those who register to study for the CFA do not turn up for the exam, says Nitin Mehta, managing director for Europe, Middle East and Africa (Emea) at the CFA Institute.
He says the programme of study is so arduous that many do not feel ready. “Only one in five people who start the qualification become CFA charter holders,” he adds.
The small number who do pass all three levels contrasts with the experience on MBA programmes.
While it can be very difficult to get into a top-flight MBA programme, once accepted, students can be confident they will finish. “If people sign up for an MBA qualification, there’s an expectation that they are going to get through or be helped through,” says Prof Shackleton.
The CFA qualification is also being helped by growth in the number of charter holders. There were 50,647 in 2003, the vast majority of whom were from the US. By 2013, that figure had more than doubled to 108,888 – more than a third of whom were from outside the US.
The number is large enough to help the qualification gain traction but small enough to remain exclusive. By contrast, more than 1m people in the world probably hold an MBA.
MBAs, it has been argued, do have the advantage when it comes to networking. Here, too, the CFA Institute argues that it can provide a valuable alternative.
While study for the three levels is usually done on one’s own, after becoming a charter holder people have the option to join the institute – a global organisation that gives access to continuing professional education and opportunities to network individually and at the many events it organises throughout the year.
Even at lower levels, candidates can subscribe to the institute’s JobLine.
Meanwhile, anecdotal evidence suggests CFA qualifications are increasingly demanded in financial job advertisements, according to Mr Mehta. He says the complexity of financial markets is one driver.
“Also, employers want to make sure they have hired people who are not only competent but [on whose character they have received guidance].”
Between 10 and 15 per cent of the CFA curriculum is focused on ethics, and candidates have to pick approved courses of actions in complex scenarios.
“Even for the most honest people, it’s not trivial. It can be tricky and that’s why we teach it,” says Mr Mehta.
Then there are cost considerations. Each stage of a CFA qualification costs about $1,000. There is an expectation that, despite the hundreds of hours of study recommended for each level, a person will be able to do it in their own time while in employment. By contrast, MBA programmes often require one to two years full-time study and can cost hundreds of thousands.
In the end, educators suggest the choice should come down to your plans and what stage you are at in your career.
Andrew Clare, professor of management at Cass Business School and a panellist in the FT’s live Q&A, says if you want to build a career in finance, it might be a good idea to get a CFA and a master’s degree first.
He says: “When you want to go into the management side, that’s when an MBA might help.” Mr Mehta agrees: “If I decided my true vocation lay in finance and investment, I might favour obtaining a CFA qualification first and then getting an MBA later, if I was going to go into management.”