CFA vs CMA Differences

The primary difference between CFA and CMA is the skills you obtain. CFA is conducted by the CFA Institute (USA) and focuses on enhancing investment management skills, including investment analysis, portfolio strategy, asset allocation, and corporate finance. Whereas CMA is conducted by the Institute of Management Accountants, enabling you to develop a level of expertise in both financial and management accounting and strategic management.

We will look at both the credentials and guide you on which one is better in the features each one of them has to offer.

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We will discuss the following in this article –

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

CFA® vs CMA Infographics

CFA vs CMA – Comparative Table

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

The CFA® program focuses on investment management. The top employers or shareholders include the most respected financial corporations globally, for example, JPMorgan, Citigroup, Bank of America, Credit Suisse, Deutsche Bank, HSBC, UBS, and Wells Fargo, to name a few. Of course, 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 a practitioner’s standpoint.

  • Live Online Classes3,000+ multiple choice questionsPrinted Textbooks5 one-hour 1-on-1 academic tutoring sessionsUnlimited Access: Yes!500+ digital flashcards70 essay questions2-part review courses1-year CPE subscription – $699 value!

  • Part I – Financial Planning, Performance and Analytics Part II – Strategic Financial Management

  • Ethical & Professional Standards Quantitative Methods Economics Financial Reporting & Analysis Corporate Finance Equity Investments Fixed IncomeFixed IncomeFixed Income refers to those investments that pay fixed interests and dividends to the investors until maturity. Government and corporate bonds are examples of fixed income investments.read more DerivativesDerivativesDerivatives in finance are financial instruments that derive their value from the value of the underlying asset. The underlying asset can be bonds, stocks, currency, commodities, etc. The four types of derivatives are - Option contracts, Future derivatives contracts, Swaps, Forward derivative contracts.

  • read more Alternatives Investments Portfolio Management & Wealth Planning

  • External Financial Reporting Decisions Planning, Budgeting & Forecasting Performance Management Cost ManagementCost ManagementCost management is an integral part of business management that works on the basis of estimates, where various activities such as data collection, data analysis and mechanisms, process evaluation, and event reporting are carried out so that the decision-maker can plan and control the organization’s budget requirements, allowing the decision-maker to make informed decisions.read more Internal ControlsInternal ControlsInternal control in accounting refers to the process by which a company implements various rules, policies, or procedures to ensure the accuracy of accounting and finance information, safeguard the various assets of the business, promote accountability in the business, and prevent the occurrence of frauds in the company.read more Technology & Analytics Financial Statement Analysis Corporate Finance Decision Analysis Risk Management Investment Decisions Professional Ethics

  • Portfolio ManagerPortfolio ManagerA portfolio manager is a financial market expert who strategically designs investment portfolios.read more Investment AnalystInvestment AnalystAn investment analyst is an individual or firm that excels in the financial and investment research and have a keen knowledge of financial instruments and models. Such financial professionals include portfolio managers, investment advisors, brokerage firms, mutual fund companies, investment banks, etc.read more Consultant Wealth Manager Strategist

  • Cost Accountant Consultant Financial Risk Manager

  • Level I: Feb 15-21, May 17-23, Aug 23-29, Nov Level II: Feb 22-26, Aug 30 – Sep 03, Nov Level III: May 24-26, Aug 30 – Sep 06

  • Jan 01 – Feb 28 May 01 – Jun 30 Sep 01 – Oct 31

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 ethics and code of professional conduct attestation) are permitted to use the CFA® designation. In addition, complementary codes and standards (such as the Global Investment Performance Standards and Asset Manager Code) help enhance this professional distinction.

What is a Certified Management Accountant (CMA)?

  • The CMA credential will make you a certified management accountant and enable you to develop financial accounting and strategic management expertise.The CMA program was introduced in 1972 and has its value-add by specializing in cost accountingCost AccountingCost accounting is a defined stream of managerial accounting used for ascertaining the overall cost of production. It measures, records and analyzes both fixed and variable costs for this purpose.read more, financial analysis, and strategic planning.CMA is ideal for accounting and finance majors who wish to work in the corporate world.This designation applies to those who are into cost and inventory accounting.

Why should you go for CFA® designation?

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

As of August 31, 2019, CFA® Institute has over 178,000 members in more than 165 countries and territories, and around 95% of members are CFA® charter holders.

  • CFA® is required, particularly if you want to enter equity researchEquity ResearchEquity Research refers to the study of a business, i.e., analyzing a company’s financials, performing Ratio Analysis, Financial forecasting in Excel (Financial Modeling), & exploring scenarios to make insightful BUY/HOLD/SELL stock investment recommendations. Moreover, the Equity Research Analysts discuss their findings & details in the Equity Research Reports. read more, investment banking, or portfolio management roles.

The differentiating benefits of earning the CFA® designation include:

  • Real-world expertiseCareer recognitionEthical groundingGlobal communityEmployer demand

As of June 30, 2019, IMA has over 75,000 CMA members and around 40,000 active CMAs. Globally, CMAs earn 63% more in total compensation than their non-CMA peers.

For more information, refer to CFA® Programs.

Why should you go for CMA?

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 company’s financial situation.The eligibility criteria are flexible, and hence the entry barrierEntry BarrierBarriers to entry are the economic hurdles that a new entrant must face in order to enter a market. For example, new entrants must pay fixed costs regardless of production or sales that would not have been incurred if the participant had not been a new entrant.read more is low.The CMA exam is designed to be completed within a year as it has testing windows spread across six months in a year.The scope is narrowed down to learn about management accounting, specifically.Accounting is considered a necessity, and hence the demand for professional accountants is usually on the higher side.

Bottom line

Weighing both these credentials, CFA® has more extensive market penetrationMarket PenetrationMarket penetration is calculated as how much the customers are using the product or service compared to the total market for that product or service.read more, is more famous, and is comparatively tricky. Consider deciding to look at the remarkable careers each of these credentials has to offer and which you would enjoy more. Whichever certificate you go for will be an excellent investment. You will have to sacrifice the most important things: the most crucial and the cost associated with the certification. Think about the pros and cons and choose wisely!

All the best! :-)

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