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Twelve years ago, Bob Johnson, a professor at Creighton University in Nebraska, US, advised a bright student to study for the Chartered Financial Analyst (CFA) qualification after graduation. The student replied that he did not need the CFA charter, because "any idiot can get a job in this market".
Three years later, Mr Johnson's former student told him that he was taking the final level of the CFA exams. "Any idiot could get a job in that market," he told Mr Johnson, "but any idiot couldn't keep it."
Today Mr Johnson is a managing director of the CFA Institute, and a strong advocate of the view that qualifications count. Citing his former student as an example, he says: "When organisations are downsizing, they like to keep individuals with the most credentials."
While there is a consensus that formal training makes it much easier to get (and keep) a good job in business, ambitious youngsters are faced with a wide range of options. Three stand out: the CFA charter, an MBA degree, and accountancy training.
Taking an MBA at a prestigious business school has long been considered the best route to senior management. "We prepare for management and, later, leadership," says Caroline Edwards, director of external relations, marketing and admissions at Insead. One of the world's top-ranked business schools, Insead has campuses in France and Singapore, and prides itself on its international outlook and diversity. Ms Edwards says an Insead education combines academic rigour with practical skills. "Our professors are thought-leaders in their fields," she says. But she adds: "A lot of what [our students] learn is not theoretical principle, it's about working in a team and negotiating skills."
Simon Williams, an Insead MBA graduate and chief risk officer at Citibank's global consumer group, agrees. He says: "You really benefit from being forced to get out and work in a group and being in a position where you're uncomfortable and have to stand up and put your case." Having to give a presentation on a complex topic when you do not have all the relevant information is, he says, good preparation for the pressures of business life.
While most MBA programmes offer a broad grounding in topics such as finance, strategy and marketing, as well as teamwork exercises and case studies, accountancy training is much more focused. Nevertheless, the CVs of many business leaders include years spent with an accountancy firm.
"Most people want chartered accountancy as a renowned business qualification," rather than because they want long-term careers as accountants, according to Paul Newton, who trained as a chartered accountant and is now managing consultant for the financial division of Nigel Wright, a recruitment consultancy based in Newcastle, northern England. He says the exams, which have a 50 per cent pass rate in the UK, "show you have a certain intellect", and that in big UK companies it is taken for granted that senior finance jobs will go to chartered accountants.
Mr Newton claims "MBAs can be a waste of time once you've got to the age of 30. They can even be seen as a negative, illustrating a lack of experience." He says by that age, one should be able to demonstrate knowledge of business and practical skills without taking a degree, and that "people doing MBAs later in their career are doing it for personal satisfaction, not career advancement".
Another problem with MBAs is that management fads come and go, so some aspects of the syllabus soon become out of date. "An MBA is valuable, but it has a time value," says Greg Spiro, who teaches on Georgetown University's MBA programme. "A colleague and I were recently saying to each other, 'our MBAs are dead in the water if we don't refresh our knowledge'." Mr Spiro also holds a qualification from the UK's Chartered Institute of Professional Development, a body that specialises in human resources and requires its members to keep up to date through professional development.
However, Mr Williams -- who trained as an accountant before attending Insead -- emphasises the advantages of an MBA. "[Accountancy] is a very powerful qualification for folks who want to be in finance," he says. "But an MBA is a good basis for any area." He says his accountancy training made it easier to master the syllabus at Insead, and an MBA's advantages include the opportunity to "switch tracks" -- from accountancy to senior management, for example.
Some universities are starting to offer specialist MBAs. For example, the University of Nottingham in England offers an MBA in legal practice. Recent graduates include Rosemary Martin, Reuters' company secretary, and Robin Farey, administrative director of Ashurst, an international law firm.
While MBAs and accountancy training have enjoyed decades of popularity, the CFA is a late entrant to the field.
Fifteen years ago there were fewer than 10,000 CFA candidates and the vast majority were American. Today there are more than 100,000, most of them outside the US. Originally aimed at investment professionals, the prestigious qualification is increasingly popular in other areas of finance.
Mr Johnson says the CFA's biggest advantage is that all candidates follow the same syllabus. "If an employer sees the letters CFA, he knows exactly what the standard is. If you see MBA, there are so many different levels of quality out there, ranging from very good programmes at prestigious schools to programmes where the person had to do very little." Dozens of universities have incorporated the CFA programme into their specialist finance and investment degrees.
Ms Edwards at Insead says some students there study for the CFA charter as well as an MBA. She stresses the advantages of the MBA's broad base. "We sometimes talk to applicants thinking about an MBA versus other qualifications if they're thinking about finance or banking. We encourage candidates to think about the long term -- other qualifications may give them useful skills but an MBA's general management skills are very useful in the long term. Our people need to have a broader view of a business when they go into senior management -- they need to understand strategy and marketing."
A survey by Russell Reynolds, the headhunter, showed that CFA charterholders earned 18 per cent more than MBAs among US-based investment professionals with at least 10 years' experience. Those with both qualifications earn most of all.
Mr Johnson says: "Investment is an incredibly competitive business, and you want as many arrows in your quiver as possible."
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