CFA vs CMA | Which is Better?

CFA® vs CMA? The key difference between CFA and CMA is the skills obtained. CFA focusses on enhancing Investment Management skills including Investment Analysis, Portfolio Strategy, Asset Allocation and Corporate Finance. Whereas, CMA enable you to develop a level of expertise in both financial and management accounting and strategic management.

Which credential is the right career choice for me?

I am sure you must have pondered on this question and asked around a dozen people as to which would be better for your finance career. Truly speaking this decision should only be yours. Surely you should do enough research and take necessary guidance but eventually it is going to be dependent upon which direction you wish to steer your career in.

Of course you must be finding each of them interlinked as they both deal with the Accounts and finance domain, but both CFA® and CMA have their distinctive identity and that is what you need to know. Once you are clear as to what benefits each of them provide you need to relate them to yourself and take a decision. This is similar to buying a product. I am sure when you go shopping and you have various options on the product, you compare and find out what each of them offers. You also look at the cost that will be incurred and then quickly do a cost-benefit analysis. Finally, you arrive at a decision as to which suits you better and what should be bought.

This is what we aim to do through this article on CFA® vs CMA. We will look about both the credentials and guide you on which one is better with respect to the features each one of them has to offer.

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We will discuss the following in this article –

• CFA® vs CMA Infographics
• What is Chartered Financial Analyst (CFA®)?
• What is Certified Management Accountant (CMA)?
• Why pursue CFA®?
• Why pursue CMA?

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CFA® vs CMA Infographics

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What is the Chartered Financial Analyst® (CFA®) charter?

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 The CFA® Program focuses on investment management. The top employers of charterholders include the most respected financial corporations in the world, e.g., JPMorgan, Citigroup, Bank of America, Credit Suisse, Deutsche Bank, HSBC, UBS, and Wells Fargo, to name a few. Many of these are investment banks, but the CFA® Program focuses on the knowledge and skills most relevant to the global investment management profession from the standpoint of a practitioner.

Investment professionals who hold the CFA®designation (or CFA® charter) meet rigorous educational, work experience, and ethical conduct requirements.

Only those who complete three graduate-level examinations, four years of work experience, and annual membership renewal (including an ethics and code of professional conduct attestation) are permitted to use the CFA® designation. Complementary codes and standards (such as the Global Investment Performance Standards and Asset Manager Code) help enhance this professional distinction.

 

What is Certified Management Accountant (CMA)?

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• The CMA credential will make you a certified management accountant and will enable you to develop a level of expertise in both financial accounting and strategic management.
• CMA program was introduced in the year 1972 and has its value-add by specializing in cost accounting, financial analysis and strategic planning.
• CMA is ideal for both accounting and finance majors who wish to work in the corporate world.
• This designation is applicable to those who are into cost and inventory accounting.

Why should you go for CFA® designation?

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Top ten companies hiring CFA® include JP Morgan Chase, PwC, HSBC, Bank of America Merrill Lynch, UBS, Ernst & Young, RBC, Citigroup, Morgan Stanley, and Wells Fargo.

CFA® Institute has over 123,000 members in more than 140 countries and territories. 94% of members are CFA® charter holders.

• CFA® is required particularly if you wish to get into equity research, investment banking or portfolio management kind of roles.

 

The differentiating benefits of earning the CFA® designation include:

• Real-world expertise
• Career recognition
• Ethical grounding
• Global community
• Employer demand

The sheer demand for the CFA® charter speaks to the difference it makes. More than 160,000 CFA® exam registrations were processed for the June 2015 exams (35% in the Americas, 22% in Europe, Middle East, and Africa, and 43% in Asia Pacific).

For more information, refer to- CFA® Programs

Why should you go for CMA?

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CMA has over 70,000 IMA members and around 20-30K active CMAs.

Globally, CMAs earn 59% more in median salary and 63% more in median total compensation than their non-CMA peers.

The global median salary is $60,000, and the global median total compensation is $66,000

• This credential is designed to help you improve your ability to make strategic business decisions depending upon the financial situation of the company.
• The eligibility criteria are flexible and hence the entry barrier is low
• The CMA exam is designed in such a way that it could be completed within a years’ time as it has testing windows spread across 6 months in a year
• The scope is narrowed down to specifically learn about management accounting
• Accounting is considered to be a necessity and hence the demand for professional accountants is usually on the higher side.

Other Useful comparison

• CFA or MBA
• CFA or FRM
• CFA or CFP
• CFA or CPA
• CMA vs ACCA
• CMA vs CPA
• CFP vs CMA

Bottom line

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Weighing both these credentials, CFA® has larger market penetration and is rather more famous, but also is comparatively difficult. Consider taking a decision after looking at the distinctive careers each of these credentials has to offer and which would you enjoy more. Whichever credential you go for is going to be a great investment for which you would have to sacrifice two most important things one is the time- the most crucial and secondly the cost associated with the certification. Think about the pros and cons and choose wisely!

All the best! 🙂