CFP vs MBA with focus in finance/management during career transition

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OSUmountaineer
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CFP vs MBA with focus in finance/management during career transition

Post by OSUmountaineer » Sat Aug 19, 2017 2:36 pm

I am considering enrollment in an online CFP-based course of study with the goal of transitioning from my current career into one where I can eventually work for myself and help people directly, possibly in finance. One of my biggest pet peeves is watching consumers make ill-informed financial decisions or struggle once uncertainty hits because they fail to plan. At the very least, I know I will enjoy the CFP-track subject matter, its application to my own finances, and the "lifetime learning" process. At the most, it would provide a pathway to gain the experience necessary to provide professional financial advice, with the goal of eventually working for myself.

About me: I am 33, engaged, and we just bought a house in Florida. I have BS and MS degrees in Geology, and am a licensed geologist in 4 states. I work as an environmental consultant with a focus on environmental remediation and hydrogeology, and work on average of 50-60 hrs a week. I come from an entrepreneurial family, and definitely want to own my own business someday. FWIW, our household income is $180k (we have similar salaries). We jointly have around $180k in retirement, $30k in high-interest (5%) savings accounts, and about $15k in taxable investments. Debt is the mortgage at $321k (4.125% 30-yr fixed), and a used car at $12k (2% APR). Kids will likely happen within the next 2 to 3 years. I love writing, personal finance, and working with numbers, though I have never taken any finance- or business-specific coursework short of micro- and macro-economics as an undergraduate.

For someone without formal training in finance but who is relatively well read, would the CFP-coursework be a good place to start for gauging a potential career-shift? I have also mulled over the idea of pursuing an MBA with a concentration in either finance or management, though completion of an MBA would be significantly more expensive than the CFP course of study. I like school, and I like taking classes to provide focus outside of day-to-day life, so program duration is not a concern.

In short, I want to help people and perhaps educate them on the importance of decision making and planning. My current position as a consultant for industrial clients exists as a line-item that subtracts value, not adds to it. From the "penny saved is a penny earned" mentality, I do add value by saving our clients money during scrutiny from regulators and lawyers, but it's not really "adding value," it's just minimizing loss while cleaning up someone else's (often conscious) neglect. I have a fundamental issue with that, perhaps because the regulatory and legal context of the problems I am solving often seems arbitrary.

My thought is to start a self-paced online course-of-study in one of the fields mentioned above while working full time in my current position to pay the bills. I love earth science, but I am starting to realize I like it more as a means of increasing science literacy of people around me more so than as a profession. I also love networking. If I decide to go the CFP course route, I will join FPA and/or other local organizations and start networking, so that once the coursework is complete I can draw upon that network to gain the experience necessary to qualify for CFP certification. I could always pursue an MBA later if I decide that to be valuable. The caveat is that I could design an MBA program with coursework that largely satisfies the requirements for the CFP, while also getting an MBA. Since my degrees are non-finance/business/etc., I thought this may add value during an initial career transition.

Any thoughts on my situation?

TheNightsToCome
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Re: CFP vs MBA with focus in finance/management during career transition

Post by TheNightsToCome » Sat Aug 19, 2017 4:45 pm

If you know that your goal is to open a financial planning business, then you should definitely earn the CFP credential and eschew the MBA.

You can study the curriculum, pass the exam, and begin building your practice all while continuing to work at your current job. When/if you think you are ready to transition to full-time financial planning you can then resign from your current job. That day may never arrive. If not, you will have invested a lot of time for naught, but not a lot of money. And since you enjoy the subject and can apply it to your own life, it won't be a complete waste of energy.

Your income as a full-time financial planner (at least during the early years) will depend more on your sales and marketing ability than your understanding of financial topics.

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Meg77
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Re: CFP vs MBA with focus in finance/management during career transition

Post by Meg77 » Sat Aug 19, 2017 5:14 pm

Definitely don't get an MBA if your goal is to start your own business or if you don't know what you want to do. If you think you may want to go into financial planning - whether as an employee or as a self-employed solo practitioner, then a CFP is a great idea.

My husband got an MBA in his early 30s, and it was a great catalyst for him to transition into the finance industry; he had majored in Spanish in college and was working in the grain industry with a decent job but that had limited upside. He got a job as a commercial analyst at a bank and needed the MBA to even be considered given his lack of financial industry experience. The investment paid off as he moved up the career ladder in commercial banking. That kind of scenario - or one where your employer helps pay for the MBA because it's a prerequisite for a management position they have in mind for you - is the kind of situation where an MBA makes sense.

But to start a business?? No MBA needed - and in fact the money and year(s) you spend getting it may prove to be a waste. You can get the required knowledge in much cheaper and quicker ways: start a side business and get hands on experience; read books from the library; interview and spend time with other business owners; attend seminars or "continuing education" classes at local colleges on specific relevant topics (bookkeeping, starting a business website, sales training, etc).

I have my CFP and have been a member of FPA for years. I don't practice as a financial planner for several reasons though. The biggest one is that I'd have to take a pay cut to do so and would likely never get back to the income I have now, at least without doubling my workload (you may find yourself in the same boat FYI). I'm a private banker and work as an employee where my primary role is lending and deposit services. One thing I'll say though is that FPA has tons of resources for budding CFPs who want to start a business or explore different career paths. There is a whole series at least in DFW called "So You're a Financial Planner, Now What?" and breakfasts and seminars and mentor programs; they talk about everything from different planning software to how to hire your first employee to emerging research on planning topics and continuing educaiton. FPA is primarily focused on self-employed planners. I go for fun because I'm a huge financial nerd and chapter meetings are an easy way to get my CE credits i need to keep my certification active.

So bottom line I think a CFP is a good step. It's not too expensive, and it's good even just for general knowledge if you never use it, as you said. And the proceeding FPA membership will give you plenty of resources if you decide to start a financial planning practice. But also remember that your passion doesn't have to be your career, and your job doesn't have to light your soul on fire. You can always start a financial blog and be active on forums like this as your outlet and keep your stable well paying day job with benefits. Most financial planners make less than you make now and probably work a lot harder (you're always selling, and you may also have a business to manage, and the compliance and regs are insane, and competition is fierce even from robots and websites, oh and you have to figure out your own health insurance...). Most financial planners spend precious little time concretely "helping people." Oh and there's the little twist that the best financial advice is simple and free and so it's difficult to make money as a planner without selling products that most people don't need.
Last edited by Meg77 on Sat Aug 19, 2017 5:19 pm, edited 1 time in total.
"An investment in knowledge pays the best interest." - Benjamin Franklin

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patrick013
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Re: CFP vs MBA with focus in finance/management during career transition

Post by patrick013 » Sat Aug 19, 2017 5:18 pm

It sounds like you might be mixing up Managerial Finance with
Investment Finance. Managerial Finance dealing with increasing
the value of a firm while Investment Finance dealing with obtaining
the highest total return within risk constraints as well as some
active management.

I don't think there is a school that teaches Managerial Finance directly
as it is commingled in accounting and finance courses. A CMA test takes
it from an accounting perspective. Investment Finance is widely taught
and a Series 65 license is a national requirement for advising for securities
for profit. Read the book twice, take 2 practice exams, pass the test, seems
to be the routine about that. Afterwards go for an MBA if still needed.
age in bonds, buy-and-hold, 10 year business cycle

OSUmountaineer
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Re: CFP vs MBA with focus in finance/management during career transition

Post by OSUmountaineer » Sun Aug 20, 2017 8:29 am

Meg77 wrote:
Sat Aug 19, 2017 5:14 pm
Definitely don't get an MBA if your goal is to start your own business or if you don't know what you want to do. If you think you may want to go into financial planning - whether as an employee or as a self-employed solo practitioner, then a CFP is a great idea.

My husband got an MBA in his early 30s, and it was a great catalyst for him to transition into the finance industry; he had majored in Spanish in college and was working in the grain industry with a decent job but that had limited upside. He got a job as a commercial analyst at a bank and needed the MBA to even be considered given his lack of financial industry experience. The investment paid off as he moved up the career ladder in commercial banking. That kind of scenario - or one where your employer helps pay for the MBA because it's a prerequisite for a management position they have in mind for you - is the kind of situation where an MBA makes sense.

But to start a business?? No MBA needed - and in fact the money and year(s) you spend getting it may prove to be a waste. You can get the required knowledge in much cheaper and quicker ways: start a side business and get hands on experience; read books from the library; interview and spend time with other business owners; attend seminars or "continuing education" classes at local colleges on specific relevant topics (bookkeeping, starting a business website, sales training, etc).

I have my CFP and have been a member of FPA for years. I don't practice as a financial planner for several reasons though. The biggest one is that I'd have to take a pay cut to do so and would likely never get back to the income I have now, at least without doubling my workload (you may find yourself in the same boat FYI). I'm a private banker and work as an employee where my primary role is lending and deposit services. One thing I'll say though is that FPA has tons of resources for budding CFPs who want to start a business or explore different career paths. There is a whole series at least in DFW called "So You're a Financial Planner, Now What?" and breakfasts and seminars and mentor programs; they talk about everything from different planning software to how to hire your first employee to emerging research on planning topics and continuing educaiton. FPA is primarily focused on self-employed planners. I go for fun because I'm a huge financial nerd and chapter meetings are an easy way to get my CE credits i need to keep my certification active.

So bottom line I think a CFP is a good step. It's not too expensive, and it's good even just for general knowledge if you never use it, as you said. And the proceeding FPA membership will give you plenty of resources if you decide to start a financial planning practice. But also remember that your passion doesn't have to be your career, and your job doesn't have to light your soul on fire. You can always start a financial blog and be active on forums like this as your outlet and keep your stable well paying day job with benefits. Most financial planners make less than you make now and probably work a lot harder (you're always selling, and you may also have a business to manage, and the compliance and regs are insane, and competition is fierce even from robots and websites, oh and you have to figure out your own health insurance...). Most financial planners spend precious little time concretely "helping people." Oh and there's the little twist that the best financial advice is simple and free and so it's difficult to make money as a planner without selling products that most people don't need.
This is exactly the type of reply I was hoping for - thanks Meg.

Your thoughts about the MBA make sense. For now I am going to shop around for an online CFP program and journey down that road. Though you're not active as a planner, does the university name on the CFP certificate really matter? For the technical work I do as a geologist, I believe it does matter (a lot, perhaps). But for an online certificate program where the goal is just to pass the test, it seems that as long as education is sound, the name on the cert won't matter (e.g. American College vs. Boston University, vs. Florida State).

TheNightsToCome
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Re: CFP vs MBA with focus in finance/management during career transition

Post by TheNightsToCome » Sun Aug 20, 2017 10:38 am

The online CFP program doesn't matter. You have to pass the CFP exam to earn the CFP credential. That is what clients will look for, and that is what matters.

Phil DeMuth
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Re: CFP vs MBA with focus in finance/management during career transition

Post by Phil DeMuth » Mon Aug 21, 2017 10:08 am

One question I would ask is, how much could I expect to earn as a CFP (my guess: 5 figures) vs. if I applied the same energy pursuing an advanced degree in a field related to what I already know, e.g., petroleum engineering. Human capital compounds: if you can build off your current base you should be able to do significantly better financially than by switching tracks, other things equal. Capitalism rewards specialization in difficult and essential fields; a CFP is a fairly general certification and every night I would go to bed worrying whether the next version of Moneyguide Pro is going to put me out of business. If you love financial services, better to be a CPA or a tax or probate attorney or an actuary than a jack of all trades.

alex_686
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Re: CFP vs MBA with focus in finance/management during career transition

Post by alex_686 » Mon Aug 21, 2017 10:37 am

patrick013 wrote:
Sat Aug 19, 2017 5:18 pm
It sounds like you might be mixing up Managerial Finance with Investment Finance. Managerial Finance dealing with increasing the value of a firm while Investment Finance dealing with obtaining the highest total return within risk constraints as well as some active management.
There are MBA programs with a emphasis on Finance. These do focus on portfolio construction. Some of these even dovetail with the Chartered Financial Analyst (CFA).

I would slightly push you away from the CFP and encourage you to look at the CFA. The CFP is specifically designed for the retail financial adviser. The CFA is a bit broader. The problem with both the CFA and the CFP is that they require work experience.

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Re: CFP vs MBA with focus in finance/management during career transition

Post by patrick013 » Mon Aug 21, 2017 12:07 pm

alex_686 wrote:
Mon Aug 21, 2017 10:37 am
patrick013 wrote:
Sat Aug 19, 2017 5:18 pm
It sounds like you might be mixing up Managerial Finance with Investment Finance. Managerial Finance dealing with increasing the value of a firm while Investment Finance dealing with obtaining the highest total return within risk constraints as well as some active management.
There are MBA programs with a emphasis on Finance. These do focus on portfolio construction. Some of these even dovetail with the Chartered Financial Analyst (CFA).

I would slightly push you away from the CFP and encourage you to look at the CFA. The CFP is specifically designed for the retail financial adviser. The CFA is a bit broader. The problem with both the CFA and the CFP is that they require work experience.
I'd never hire a CFA, they devote too much time to hedging. I think the Series 65
is the most for the money. Most if not all of the CFP but also get the national
license to boot. If you're strong in statistics you'll be OK. But whoever has to
decide whatever they do based on their current situation.

These darn MBA courses can be close to $3000 and books close to $300. I think
I'd get an old Managerial Finance book on eBay and read it, or Bogle's Little Book
of Common Sense Investing. Should get an MBA when one is young anyway, offices
get filled up with people rather fast.
age in bonds, buy-and-hold, 10 year business cycle

mcxavierdaniel
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Re: CFP vs MBA with focus in finance/management during career transition

Post by mcxavierdaniel » Mon Aug 21, 2017 2:26 pm

I work for an investment firm. I have an MBA with a concentration in Finance. I also sat for and passed level 1 of the CFA exam. I have yet to decide when I will continue as it's a big time commitment. At one time, I thought about a career as a financial advisor/planner because I also enjoy personal finance and helping people with their finances, but there is a sales-aspect to this track that I'm not real interested in. This is generally a good way to think about it as there are serious distinctions and career paths:

(1) If you want to manage other people's money starting as an analyst with the goal of portfolio manager one day, then get into a top 5-10 MBA program or to a lesser degree earn a CFA.
(a) CFA is an economical (but time intensive) way of learning the financial concepts you need to analyze the economy, a company, and therefore investment opportunities. There are 3 levels and with little to no financial background, you will study approx 200 hrs per year to sit for the test, which is offered pass/fail 1x a year in June (except level 1, which is offered in June and Dec). The curriculum is a mile wide and a foot deep ranging from accounting to economics to securities valuation to portfolio construction to ethics. It will not itself get you a job or interview, but it shows dedication and a level of financial aptitude. Check out analystforum.com if this track interests you. This site is dedicated to people writing those tests and there is a career section.
(b) An MBA with a concentration in Finance from a top 5-10 business school will gain you exposure to the asset managers and hedge funds that recruit for said positions. An MBA is much more about networking than anything else, but obviouly you learn various topics from corporate finance to investment mangement.

(2) If you want to be a financial advisor/planner, earn the CFP. It is direct education into all the aspects into financial planning: investments, insurance, tax, estate planning, etc. Financial planning is very much a sales-oriented position as much as it is a planning or analytical position - maybe more. You will have to get clients and sell yourself and your products in order to make any money. Earning potential is high. Success rate seems to be binary. People either make it or don't. If you like the idea of helping people directly with their personal financial situation, this is what you want. The neat thing about this is that you can do it on the side to a certain degree or in a semi-retirement mode to earn money and keep busy.

(3) The return on an MBA is mostly about the the exit opportunities around networking and the access to people you get. It's about interacting with other classmates, alumns, and business leaders. Relationships you can foster and can have for a lifetime. You do learn business and finance too ;) Yes, there are some management or finance positions that require MBA so there is potential upward mobility, but the big win is the ability to transition into different fields, career tracks, or companies. For example, given your degree in geology, with an MBA from a top school could get you an interview with a fund or trading firm that specializes in the mining and exploration names, natural gas, oil, energy, etc. Or you could get out of that totally and work in finance for any random company - GOOGL, AAPL, FB, etc all recruit MBAs. If you are interested in an MBA, you could study for the GMAT and see what you score. This would give you an idea on what schools you could possibly get into. Your GMAT score isn't the only factor, but it's an important factor. Then weigh your options. Time time and cost for the GMAT is relatively low. But, there are considerations on the return you'd actually get based on the school you go to.

There might be other opinions. This is my 2cents based on my background and experience. I hope this helps.

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Re: CFP vs MBA with focus in finance/management during career transition

Post by Broken Man 1999 » Mon Aug 21, 2017 2:39 pm

Don't some of the financial credentials require actual time in the business prior to be becoming credentialed?

I could be wrong, but I checked into one program myself some time ago and time in an appropriate financial job was required.

Might be slim pickings if you have to leave current job to get credentialed.

Broken Man 1999
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patrick013
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Re: CFP vs MBA with focus in finance/management during career transition

Post by patrick013 » Mon Aug 21, 2017 3:14 pm

Broken Man 1999 wrote:
Mon Aug 21, 2017 2:39 pm

Might be slim pickings if you have to leave current job to get credentialed.
Another good thing about the Series 65. There are no experience
requirements, continuing education requirements, retesting or
anything else like that. You can advise churches or pension funds
or investment companies. Regulations are at least as important as
financial math and concepts.
age in bonds, buy-and-hold, 10 year business cycle

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Re: CFP vs MBA with focus in finance/management during career transition

Post by Meg77 » Mon Aug 21, 2017 3:24 pm

OSUmountaineer wrote:
Sun Aug 20, 2017 8:29 am
Meg77 wrote:
Sat Aug 19, 2017 5:14 pm
Definitely don't get an MBA if your goal is to start your own business or if you don't know what you want to do. If you think you may want to go into financial planning - whether as an employee or as a self-employed solo practitioner, then a CFP is a great idea.

My husband got an MBA in his early 30s, and it was a great catalyst for him to transition into the finance industry; he had majored in Spanish in college and was working in the grain industry with a decent job but that had limited upside. He got a job as a commercial analyst at a bank and needed the MBA to even be considered given his lack of financial industry experience. The investment paid off as he moved up the career ladder in commercial banking. That kind of scenario - or one where your employer helps pay for the MBA because it's a prerequisite for a management position they have in mind for you - is the kind of situation where an MBA makes sense.

But to start a business?? No MBA needed - and in fact the money and year(s) you spend getting it may prove to be a waste. You can get the required knowledge in much cheaper and quicker ways: start a side business and get hands on experience; read books from the library; interview and spend time with other business owners; attend seminars or "continuing education" classes at local colleges on specific relevant topics (bookkeeping, starting a business website, sales training, etc).

I have my CFP and have been a member of FPA for years. I don't practice as a financial planner for several reasons though. The biggest one is that I'd have to take a pay cut to do so and would likely never get back to the income I have now, at least without doubling my workload (you may find yourself in the same boat FYI). I'm a private banker and work as an employee where my primary role is lending and deposit services. One thing I'll say though is that FPA has tons of resources for budding CFPs who want to start a business or explore different career paths. There is a whole series at least in DFW called "So You're a Financial Planner, Now What?" and breakfasts and seminars and mentor programs; they talk about everything from different planning software to how to hire your first employee to emerging research on planning topics and continuing educaiton. FPA is primarily focused on self-employed planners. I go for fun because I'm a huge financial nerd and chapter meetings are an easy way to get my CE credits i need to keep my certification active.

So bottom line I think a CFP is a good step. It's not too expensive, and it's good even just for general knowledge if you never use it, as you said. And the proceeding FPA membership will give you plenty of resources if you decide to start a financial planning practice. But also remember that your passion doesn't have to be your career, and your job doesn't have to light your soul on fire. You can always start a financial blog and be active on forums like this as your outlet and keep your stable well paying day job with benefits. Most financial planners make less than you make now and probably work a lot harder (you're always selling, and you may also have a business to manage, and the compliance and regs are insane, and competition is fierce even from robots and websites, oh and you have to figure out your own health insurance...). Most financial planners spend precious little time concretely "helping people." Oh and there's the little twist that the best financial advice is simple and free and so it's difficult to make money as a planner without selling products that most people don't need.
This is exactly the type of reply I was hoping for - thanks Meg.

Your thoughts about the MBA make sense. For now I am going to shop around for an online CFP program and journey down that road. Though you're not active as a planner, does the university name on the CFP certificate really matter? For the technical work I do as a geologist, I believe it does matter (a lot, perhaps). But for an online certificate program where the goal is just to pass the test, it seems that as long as education is sound, the name on the cert won't matter (e.g. American College vs. Boston University, vs. Florida State).
I definitely don't think the program/university name matters in this case. You don't even have to put it on your resume if it sounds lower-end - I've seen some folks once they get the marks just putting a bullet under education that says they passed the exam and received the CFP(R) Certification in X year.
"An investment in knowledge pays the best interest." - Benjamin Franklin

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Re: CFP vs MBA with focus in finance/management during career transition

Post by Meg77 » Mon Aug 21, 2017 3:27 pm

Broken Man 1999 wrote:
Mon Aug 21, 2017 2:39 pm
Don't some of the financial credentials require actual time in the business prior to be becoming credentialed?

I could be wrong, but I checked into one program myself some time ago and time in an appropriate financial job was required.

Might be slim pickings if you have to leave current job to get credentialed.

Broken Man 1999
This is true, but a lot of entry level financial planning jobs don't require a CFP, will pay you to get your CFP while there, and know that it'll take a few years in the industry even after passing the exam before you can use the marks due to the experience requirement.

Of course a lot of those employers are hiring finance grads which is why passing the exam yourself before applying can be beneficial. Not only are you saving the employer the expense of the classes and exam (and the risk that you won't pass), you'll be more likely to be interviewed once you have the designation since your previous experience will be unrelated.
"An investment in knowledge pays the best interest." - Benjamin Franklin

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Re: CFP vs MBA with focus in finance/management during career transition

Post by vaught » Mon Aug 21, 2017 4:44 pm

OSUmountaineer wrote:
Sat Aug 19, 2017 2:36 pm
I am considering enrollment in an online CFP-based course of study with the goal of transitioning from my current career into one where I can eventually work for myself and help people directly, possibly in finance. One of my biggest pet peeves is watching consumers make ill-informed financial decisions or struggle once uncertainty hits because they fail to plan. At the very least, I know I will enjoy the CFP-track subject matter, its application to my own finances, and the "lifetime learning" process. At the most, it would provide a pathway to gain the experience necessary to provide professional financial advice, with the goal of eventually working for myself.

About me: I am 33, engaged, and we just bought a house in Florida. I have BS and MS degrees in Geology, and am a licensed geologist in 4 states. I work as an environmental consultant with a focus on environmental remediation and hydrogeology, and work on average of 50-60 hrs a week. I come from an entrepreneurial family, and definitely want to own my own business someday. FWIW, our household income is $180k (we have similar salaries). We jointly have around $180k in retirement, $30k in high-interest (5%) savings accounts, and about $15k in taxable investments. Debt is the mortgage at $321k (4.125% 30-yr fixed), and a used car at $12k (2% APR). Kids will likely happen within the next 2 to 3 years. I love writing, personal finance, and working with numbers, though I have never taken any finance- or business-specific coursework short of micro- and macro-economics as an undergraduate.

For someone without formal training in finance but who is relatively well read, would the CFP-coursework be a good place to start for gauging a potential career-shift? I have also mulled over the idea of pursuing an MBA with a concentration in either finance or management, though completion of an MBA would be significantly more expensive than the CFP course of study. I like school, and I like taking classes to provide focus outside of day-to-day life, so program duration is not a concern.

In short, I want to help people and perhaps educate them on the importance of decision making and planning. My current position as a consultant for industrial clients exists as a line-item that subtracts value, not adds to it. From the "penny saved is a penny earned" mentality, I do add value by saving our clients money during scrutiny from regulators and lawyers, but it's not really "adding value," it's just minimizing loss while cleaning up someone else's (often conscious) neglect. I have a fundamental issue with that, perhaps because the regulatory and legal context of the problems I am solving often seems arbitrary.

My thought is to start a self-paced online course-of-study in one of the fields mentioned above while working full time in my current position to pay the bills. I love earth science, but I am starting to realize I like it more as a means of increasing science literacy of people around me more so than as a profession. I also love networking. If I decide to go the CFP course route, I will join FPA and/or other local organizations and start networking, so that once the coursework is complete I can draw upon that network to gain the experience necessary to qualify for CFP certification. I could always pursue an MBA later if I decide that to be valuable. The caveat is that I could design an MBA program with coursework that largely satisfies the requirements for the CFP, while also getting an MBA. Since my degrees are non-finance/business/etc., I thought this may add value during an initial career transition.

Any thoughts on my situation?
I'd like to hear more about a 5% savings account.

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Re: CFP vs MBA with focus in finance/management during career transition

Post by JBTX » Mon Aug 21, 2017 5:39 pm

An MBA would be used in the corporate world. CFP for personal financial planning. Completely different animals.

I have an MBA. I work in corporate world. Given I like personal finance I contemplated pursuing CFP later in life but after talking to people came to the conclusion that to succeed you really have to be sales oriented and a personal networker. Also I'm guessing most make their money selling on commission. There are fee only CFPs too but my bet would be they don't make as much. (Which is nothing but a hunch). For those reasons I gave up on the idea pretty quickly.

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Re: CFP vs MBA with focus in finance/management during career transition

Post by JBTX » Mon Aug 21, 2017 5:42 pm

vaught wrote:
Mon Aug 21, 2017 4:44 pm
OSUmountaineer wrote:
Sat Aug 19, 2017 2:36 pm
I am considering enrollment in an online CFP-based course of study with the goal of transitioning from my current career into one where I can eventually work for myself and help people directly, possibly in finance. One of my biggest pet peeves is watching consumers make ill-informed financial decisions or struggle once uncertainty hits because they fail to plan. At the very least, I know I will enjoy the CFP-track subject matter, its application to my own finances, and the "lifetime learning" process. At the most, it would provide a pathway to gain the experience necessary to provide professional financial advice, with the goal of eventually working for myself.

About me: I am 33, engaged, and we just bought a house in Florida. I have BS and MS degrees in Geology, and am a licensed geologist in 4 states. I work as an environmental consultant with a focus on environmental remediation and hydrogeology, and work on average of 50-60 hrs a week. I come from an entrepreneurial family, and definitely want to own my own business someday. FWIW, our household income is $180k (we have similar salaries). We jointly have around $180k in retirement, $30k in high-interest (5%) savings accounts, and about $15k in taxable investments. Debt is the mortgage at $321k (4.125% 30-yr fixed), and a used car at $12k (2% APR). Kids will likely happen within the next 2 to 3 years. I love writing, personal finance, and working with numbers, though I have never taken any finance- or business-specific coursework short of micro- and macro-economics as an undergraduate.

For someone without formal training in finance but who is relatively well read, would the CFP-coursework be a good place to start for gauging a potential career-shift? I have also mulled over the idea of pursuing an MBA with a concentration in either finance or management, though completion of an MBA would be significantly more expensive than the CFP course of study. I like school, and I like taking classes to provide focus outside of day-to-day life, so program duration is not a concern.

In short, I want to help people and perhaps educate them on the importance of decision making and planning. My current position as a consultant for industrial clients exists as a line-item that subtracts value, not adds to it. From the "penny saved is a penny earned" mentality, I do add value by saving our clients money during scrutiny from regulators and lawyers, but it's not really "adding value," it's just minimizing loss while cleaning up someone else's (often conscious) neglect. I have a fundamental issue with that, perhaps because the regulatory and legal context of the problems I am solving often seems arbitrary.

My thought is to start a self-paced online course-of-study in one of the fields mentioned above while working full time in my current position to pay the bills. I love earth science, but I am starting to realize I like it more as a means of increasing science literacy of people around me more so than as a profession. I also love networking. If I decide to go the CFP course route, I will join FPA and/or other local organizations and start networking, so that once the coursework is complete I can draw upon that network to gain the experience necessary to qualify for CFP certification. I could always pursue an MBA later if I decide that to be valuable. The caveat is that I could design an MBA program with coursework that largely satisfies the requirements for the CFP, while also getting an MBA. Since my degrees are non-finance/business/etc., I thought this may add value during an initial career transition.

Any thoughts on my situation?
I'd like to hear more about a 5% savings account.
Indeed!

If it is real it is probably junk. I lost a good deal of money on a heartland municipal short term junk bond fund many years ago.

alex_686
Posts: 2547
Joined: Mon Feb 09, 2015 2:39 pm

Re: CFP vs MBA with focus in finance/management during career transition

Post by alex_686 » Mon Aug 21, 2017 6:34 pm

patrick013 wrote:
Mon Aug 21, 2017 12:07 pm
alex_686 wrote:
Mon Aug 21, 2017 10:37 am
patrick013 wrote:
Sat Aug 19, 2017 5:18 pm
It sounds like you might be mixing up Managerial Finance with Investment Finance. Managerial Finance dealing with increasing the value of a firm while Investment Finance dealing with obtaining the highest total return within risk constraints as well as some active management.
There are MBA programs with a emphasis on Finance. These do focus on portfolio construction. Some of these even dovetail with the Chartered Financial Analyst (CFA).

I would slightly push you away from the CFP and encourage you to look at the CFA. The CFP is specifically designed for the retail financial adviser. The CFA is a bit broader. The problem with both the CFA and the CFP is that they require work experience.
I'd never hire a CFA, they devote too much time to hedging. I think the Series 65
is the most for the money. Most if not all of the CFP but also get the national
license to boot. If you're strong in statistics you'll be OK. But whoever has to
decide whatever they do based on their current situation.
I bet if you check your mutual fund's portfolio managers at least one of them has a CFA. :wink:

Back to the OP. Any door that the CFP would open a CFA would open as well. Any door that a CFA would open would also be opened by a MBA in Finance.

To the CFA. I personally found the time commitment more flexible than that of a MBA. To the subject matter being a mile wide and a foot deep that is somewhat true. I would counter that the CFA does a wonderful job of tying all of their subject matter areas together. A single question will draw on knowledge from one area (statistics or economics for example) as inputs for another question (equity evaluation) .

User avatar
patrick013
Posts: 1845
Joined: Mon Jul 13, 2015 7:49 pm

Re: CFP vs MBA with focus in finance/management during career transition

Post by patrick013 » Tue Aug 22, 2017 1:27 pm

alex_686 wrote:
Mon Aug 21, 2017 6:34 pm
patrick013 wrote:
Mon Aug 21, 2017 12:07 pm
alex_686 wrote:
Mon Aug 21, 2017 10:37 am
patrick013 wrote:
Sat Aug 19, 2017 5:18 pm
It sounds like you might be mixing up Managerial Finance with Investment Finance. Managerial Finance dealing with increasing the value of a firm while Investment Finance dealing with obtaining the highest total return within risk constraints as well as some active management.
There are MBA programs with a emphasis on Finance. These do focus on portfolio construction. Some of these even dovetail with the Chartered Financial Analyst (CFA).

I would slightly push you away from the CFP and encourage you to look at the CFA. The CFP is specifically designed for the retail financial adviser. The CFA is a bit broader. The problem with both the CFA and the CFP is that they require work experience.
I'd never hire a CFA, they devote too much time to hedging. I think the Series 65
is the most for the money. Most if not all of the CFP but also get the national
license to boot. If you're strong in statistics you'll be OK. But whoever has to
decide whatever they do based on their current situation.
I bet if you check your mutual fund's portfolio managers at least one of them has a CFA. :wink:

Back to the OP. Any door that the CFP would open a CFA would open as well. Any door that a CFA would open would also be opened by a MBA in Finance.

To the CFA. I personally found the time commitment more flexible than that of a MBA. To the subject matter being a mile wide and a foot deep that is somewhat true. I would counter that the CFA does a wonderful job of tying all of their subject matter areas together. A single question will draw on knowledge from one area (statistics or economics for example) as inputs for another question (equity evaluation) .
Well if one has a Finance degree with good statistics background there
are good options. The CFP and Series 65 are comparable with the CFP
weightier in insurance and the 65 weightier in regulations. I've found
the CFA material just a repetition of what one learns with a Finance degree
but reorganized in a cumbersome fashion and unfamiliar nomenclature.
Even the Series 7 has better standard language usage. The CFA and
Series 7 both handle hedging quite well with the Series 7 the more common
presentation, which is important. The Series 7 has 50 questions on options,
derivative products and hedging. So I'm happy enough with a Finance
degree or MBA and a Series 65 and leave hedging to someone else.

Accounting has several certifications also with the CPA being the only one
legally needed and that for only issuing a public audit report.

Without a Finance degree you could probably do a CFP or Series 65 in a year ?
Perhaps 2 to 3 years for the CFA. Kinda overworks the subject matter when
indexing or basic fundamental valuations are only needed and very little if any
hedging is going to be done. But without a Finance degree those are real
alternatives.
age in bonds, buy-and-hold, 10 year business cycle

OSUmountaineer
Posts: 33
Joined: Sat Nov 08, 2014 8:28 pm

Re: CFP vs MBA with focus in finance/management during career transition

Post by OSUmountaineer » Tue Aug 22, 2017 4:10 pm

JBTX wrote:
Mon Aug 21, 2017 5:42 pm
vaught wrote:
Mon Aug 21, 2017 4:44 pm
OSUmountaineer wrote:
Sat Aug 19, 2017 2:36 pm
I am considering enrollment in an online CFP-based course of study with the goal of transitioning from my current career into one where I can eventually work for myself and help people directly, possibly in finance. One of my biggest pet peeves is watching consumers make ill-informed financial decisions or struggle once uncertainty hits because they fail to plan. At the very least, I know I will enjoy the CFP-track subject matter, its application to my own finances, and the "lifetime learning" process. At the most, it would provide a pathway to gain the experience necessary to provide professional financial advice, with the goal of eventually working for myself.

About me: I am 33, engaged, and we just bought a house in Florida. I have BS and MS degrees in Geology, and am a licensed geologist in 4 states. I work as an environmental consultant with a focus on environmental remediation and hydrogeology, and work on average of 50-60 hrs a week. I come from an entrepreneurial family, and definitely want to own my own business someday. FWIW, our household income is $180k (we have similar salaries). We jointly have around $180k in retirement, $30k in high-interest (5%) savings accounts, and about $15k in taxable investments. Debt is the mortgage at $321k (4.125% 30-yr fixed), and a used car at $12k (2% APR). Kids will likely happen within the next 2 to 3 years. I love writing, personal finance, and working with numbers, though I have never taken any finance- or business-specific coursework short of micro- and macro-economics as an undergraduate.

For someone without formal training in finance but who is relatively well read, would the CFP-coursework be a good place to start for gauging a potential career-shift? I have also mulled over the idea of pursuing an MBA with a concentration in either finance or management, though completion of an MBA would be significantly more expensive than the CFP course of study. I like school, and I like taking classes to provide focus outside of day-to-day life, so program duration is not a concern.

In short, I want to help people and perhaps educate them on the importance of decision making and planning. My current position as a consultant for industrial clients exists as a line-item that subtracts value, not adds to it. From the "penny saved is a penny earned" mentality, I do add value by saving our clients money during scrutiny from regulators and lawyers, but it's not really "adding value," it's just minimizing loss while cleaning up someone else's (often conscious) neglect. I have a fundamental issue with that, perhaps because the regulatory and legal context of the problems I am solving often seems arbitrary.

My thought is to start a self-paced online course-of-study in one of the fields mentioned above while working full time in my current position to pay the bills. I love earth science, but I am starting to realize I like it more as a means of increasing science literacy of people around me more so than as a profession. I also love networking. If I decide to go the CFP course route, I will join FPA and/or other local organizations and start networking, so that once the coursework is complete I can draw upon that network to gain the experience necessary to qualify for CFP certification. I could always pursue an MBA later if I decide that to be valuable. The caveat is that I could design an MBA program with coursework that largely satisfies the requirements for the CFP, while also getting an MBA. Since my degrees are non-finance/business/etc., I thought this may add value during an initial career transition.

Any thoughts on my situation?
I'd like to hear more about a 5% savings account.
Indeed!

If it is real it is probably junk. I lost a good deal of money on a heartland municipal short term junk bond fund many years ago.
Northpointe Bank - 5% up to $10k, distributed monthly. Requirement is 15 debit card transactions (Easy to automate).

Insight prepaid - 5% up to $5k, distributed quarterly

Also have money in a Lake Michigan Credit Union 3% account up to $15k, distributed monthly, requires 10 debit transactions/month (again, easy to automate).

JBTX
Posts: 1522
Joined: Wed Jul 26, 2017 12:46 pm

Re: CFP vs MBA with focus in finance/management during career transition

Post by JBTX » Tue Aug 22, 2017 4:40 pm

OSUmountaineer wrote:
Tue Aug 22, 2017 4:10 pm
JBTX wrote:
Mon Aug 21, 2017 5:42 pm
vaught wrote:
Mon Aug 21, 2017 4:44 pm
OSUmountaineer wrote:
Sat Aug 19, 2017 2:36 pm
I am considering enrollment in an online CFP-based course of study with the goal of transitioning from my current career into one where I can eventually work for myself and help people directly, possibly in finance. One of my biggest pet peeves is watching consumers make ill-informed financial decisions or struggle once uncertainty hits because they fail to plan. At the very least, I know I will enjoy the CFP-track subject matter, its application to my own finances, and the "lifetime learning" process. At the most, it would provide a pathway to gain the experience necessary to provide professional financial advice, with the goal of eventually working for myself.

About me: I am 33, engaged, and we just bought a house in Florida. I have BS and MS degrees in Geology, and am a licensed geologist in 4 states. I work as an environmental consultant with a focus on environmental remediation and hydrogeology, and work on average of 50-60 hrs a week. I come from an entrepreneurial family, and definitely want to own my own business someday. FWIW, our household income is $180k (we have similar salaries). We jointly have around $180k in retirement, $30k in high-interest (5%) savings accounts, and about $15k in taxable investments. Debt is the mortgage at $321k (4.125% 30-yr fixed), and a used car at $12k (2% APR). Kids will likely happen within the next 2 to 3 years. I love writing, personal finance, and working with numbers, though I have never taken any finance- or business-specific coursework short of micro- and macro-economics as an undergraduate.

For someone without formal training in finance but who is relatively well read, would the CFP-coursework be a good place to start for gauging a potential career-shift? I have also mulled over the idea of pursuing an MBA with a concentration in either finance or management, though completion of an MBA would be significantly more expensive than the CFP course of study. I like school, and I like taking classes to provide focus outside of day-to-day life, so program duration is not a concern.

In short, I want to help people and perhaps educate them on the importance of decision making and planning. My current position as a consultant for industrial clients exists as a line-item that subtracts value, not adds to it. From the "penny saved is a penny earned" mentality, I do add value by saving our clients money during scrutiny from regulators and lawyers, but it's not really "adding value," it's just minimizing loss while cleaning up someone else's (often conscious) neglect. I have a fundamental issue with that, perhaps because the regulatory and legal context of the problems I am solving often seems arbitrary.

My thought is to start a self-paced online course-of-study in one of the fields mentioned above while working full time in my current position to pay the bills. I love earth science, but I am starting to realize I like it more as a means of increasing science literacy of people around me more so than as a profession. I also love networking. If I decide to go the CFP course route, I will join FPA and/or other local organizations and start networking, so that once the coursework is complete I can draw upon that network to gain the experience necessary to qualify for CFP certification. I could always pursue an MBA later if I decide that to be valuable. The caveat is that I could design an MBA program with coursework that largely satisfies the requirements for the CFP, while also getting an MBA. Since my degrees are non-finance/business/etc., I thought this may add value during an initial career transition.

Any thoughts on my situation?
I'd like to hear more about a 5% savings account.
Indeed!

If it is real it is probably junk. I lost a good deal of money on a heartland municipal short term junk bond fund many years ago.
Northpointe Bank - 5% up to $10k, distributed monthly. Requirement is 15 debit card transactions (Easy to automate).

Insight prepaid - 5% up to $5k, distributed quarterly

Also have money in a Lake Michigan Credit Union 3% account up to $15k, distributed monthly, requires 10 debit transactions/month (again, easy to automate).
One of our local banks, Northstar, had a similar deal years ago. i signed up and kept the balance and did all the things they said. Then months later dropped a bit, then again, and now it is down to less than 1%. They are teaser rates to get money in, and hope it stays there.

Is it worth the effort? Maybe. It is a fair amount of work to get approx an additional $500, less whatever you would have made putting it on a 2% card. I found myself fumbling through my cards to make sure to pay small trx on one and larger trx on my main cards. It was kind of a pain. $500 is right about the threshold of where I'd consider doing it.

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inittowinit
Posts: 82
Joined: Thu Jul 05, 2012 6:37 pm

Re: CFP vs MBA with focus in finance/management during career transition

Post by inittowinit » Wed Aug 23, 2017 6:31 pm

OSUmountaineer wrote:
Sat Aug 19, 2017 2:36 pm
I am considering enrollment in an online CFP-based course of study with the goal of transitioning from my current career into one where I can eventually work for myself and help people directly, possibly in finance...
The CFP requires three years of relevant work experience, and it seems as though you have none. Do you have any idea of how you intend to fulfill the requirement? I imagine those three years of experience-building will require taking a significant salary reduction.

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