Considering how much money and effort goes into earning credentials, their value has become a hot topic for debate. As someone with a few different credentials, here’s my take on it.
My credentials (CFA, CERA, ASA, and MBA) are probably what I’ve worked hardest for in my career, but they are a part of me forever. Unlike a job or money, no one can take them away. In many facets of work and life, they give me legitimacy and credibility; especially useful for someone who is always fighting bouts of imposter syndrome. But were they worth it?
My answer is yes, they are worth it, but I’m biased because I have them already. Whether they’d be worth it to someone just starting out depends on what they hope to get out of them.
There are a few angles to this question, on which I’ll share the insights I’ve gained from my career.
The case for credentials
Obtaining a credential of any value requires a tremendous amount of work. The ones I’ve gotten are equivalent to graduate degrees (and one is a graduate degree). They also come at high monetary costs. This leads to a lot of debate about whether anyone should bother.
Detractors of the value of credentials believe that success is only driven by their tangible work product. In fact, they often argue they are more effective without credentials because they have real-world training, rather than wasting their time and money taking exams.
And they have a point: credentials are worth very little alone. Too many people pursue credentials expecting them to be a golden ticket and to coast for the rest of their lives. Ultimately, your value in the world will be defined by the work you do, not the exams you’ve passed. I’ve worked with plenty of exam superstars who were ineffective at their job and would never go anywhere in their careers.
However, limiting the discussion to this vacuum is irresponsible. Credentials have tremendous value when obtained in conjunction with other business skills. They open doors, provide education, and create connections.
It’s also important to see where those detractors are coming from. Many who call credentials “meaningless” or a “waste” have different skills (such as persuasion, sales, etc.) that helped them be successful despite their lack of credentials. They might have quit on credentials when those skills did not translate into exam success. (You can’t talk an exam into anything…you actually have to know things.)
So, let’s be realistic about the value of credentials: it’s pretty high. They have been powerful for me and they will continue to be powerful for future generations. Here are three broad reasons I think credentials are worth the effort.
1. Credentials teach you the fundamentals.
While these exams will not actually prepare you to do the work in your job alone, they will provide a solid base of knowledge to make your job easier to learn and make you better at it. Much like you can’t do calculus without understanding how arithmetic works first, these exams force you to know the basics of the underlying theories in extreme depth. They even include a lot of the industry’s best and latest thinking, leading you to potentially even improve upon the work you are taught at your job.
2. Credentials give you confidence and opportunities to break into a field.
In many fields, credentials are a hard prerequisite for entry, for legal or other reasons. Career changers get credentials to prove they are serious about the move and help overcome the experience requirements listed in job descriptions. Top performers get credentials to help show management they are ready for promotions and responsibility. Client-facing professionals get credentials to establish themselves as trustworthy and competent. Anyone can get credentials to open doors and gain shortcuts to the career they want.
3. Credentials put you in an exclusive club.
Everyone in this club knows that every other member went through the same thing, and they are linked by the fact that no one outside it knows exactly what it took. Those with credentials know that others with the same credentials have a similar way of thinking; it was ingrained during the credentialing process (education, examination, standards of practice, etc.). It’s almost like a way of networking without actually doing any networking.
The value of specific credentials
Different credentials obviously have different values. Sometimes, credentials are a hard barrier to entry (e.g., you cannot practice law without passing the bar exam). Sometimes, there is no barrier at all, but the credential still helps establish your level of expertise (e.g., many financial advisors give advice despite the fact that they’ve never obtained a CFP or CFA designation).
The only credentials whose value I can speak intelligently about are those I’ve obtained, and their value in my field of institutional investment consulting. I’ll rate them on an arbitrary 1 to 5 scale, with 5 being most valuable, to give some context to how “worth it” they’ve been to me.
Actuarial Credentials (ASA and CERA)
My ASA (Associate of the Society of Actuaries) and CERA (Chartered Enterprise Risk Analyst) make me an “actuary,” a word most people haven’t even heard before. In circles of mathematics or risk, I am a legitimate contender, and at minimum, someone who has shown an affinity for complex mathematical topics and can therefore take on and understand other complex topics.
Credentials are a high barrier to entry for the actuarial profession. To even apply for most jobs, you must have passed at least one exam. Furthermore, you will hit a ceiling and be unable to get promoted if you do not continue passing. This is why many aspiring actuaries switch careers after a few failing grades.
Actuarial credentials were my hardest and most time-consuming. These exams have extremely low pass rates and you have to wade through five to ten (or more) of them, in addition to online courses and other educational requirements.
For this reason, actuaries have among the highest salaries for math and business majors. Passing one exam got me into the business world at a higher starting point than my college classmates. Throughout my career, raises and bonuses were granted for each exam passed. Compensation alone is a compelling case for the value of actuarial credentials. Job security is another; there’s always a demand for actuaries in the workforce because these exams are so tough.
Therefore, I believe the ASA and CERA were “worth it” for me. While they were a lot of work, I completed them while leading a relatively normal social life and with less effort than most (which I wrote about here).
On my arbitrary 5-point scale, I’d give the ASA a 4 out of 5 and the CERA a 3.5 out of 5 on value for me. The reason for the difference is the ASA’s greater recognition in the community, despite that they have very similar curricula.
On a subtopic, most career actuaries do not stop as ASA or CERA (which are the “Master’s” level credentials); they continue taking exams until they become an FSA (which is the “Doctorate” level credential). My career has mostly veered off the actuarial path and into investment management, so it did not make sense for me to continue taking actuarial exams. I do still use my actuarial background every day in my investment specialty. However, the question about value needed to be asked: what is the marginal gain I’d get from taking a whole slew of additional exams, just to change from ASA to FSA? The answer for me, of course, was “not much.” For many others, the FSA may mean the difference between their dream job and a stalled career, so they would have a much different answer.
Chartered Financial Analyst (CFA)
My CFA designation, often called the toughest exams on Wall Street, gave me confidence in breaking into a world of investment consulting, of which I always wanted to be a part but was kept out of early in my career. It also gives me the confidence to advise regular people I meet throughout life and through this website about how to best handle their money and improve their financial situation.
The CFA curriculum is incredible. It covers everything anyone would need to know about investing. You would pick up on all the terminology and concepts used by professionals even if you were starting fresh. Even a non-investment professional would get value from this, learning how to handle the finances for their business and for themselves as an individual. For its education alone, the CFA makes a compelling case for value.
Additionally, the CFA opens doors to many career opportunities. Much like actuarial credentials, certain investment roles require at least one exam passed to apply. In the world of finance that is wrought with relatively meaningless credentials, it is by far the most respected. It is also broadly recognized (much more so than actuarial credentials); at this point almost as well-known as an MBA. The CFA granted me some small raises and bonuses at my firm, but more importantly, it established me as an investment expert to prospective clients and greatly widened my range of potential future employers.
The CFA program is a lot of work, but less than the actuarial process. There are fewer exams (only three) and they are easier. It might seem overwhelming to someone who is not ready for this type of intense program, but ultimately it is very reasonable considering its value and in comparison to similar credentials.
Therefore, the CFA was absolutely “worth it” for me. Having the actuarial credentials already when I started this program, the CFA was relatively painless.
On my arbitrary 5-point scale, I’d give the CFA a 5 out of 5 on value for me. I recommend it to everyone entering my field or anything similar.
Master of Business Administration (MBA)
The MBA is the most common graduate degree for CEOs and corporate leaders. When seeking to manage people, to be promoted, to oversee lines of business, and even to get funding for a new business, I can go in with the confidence of this business powerhouse credential at my back.
Valuing an MBA is tricky because there are many different variations. On the high end, full-time MBA programs at prestigious universities grant incredible name recognition and provide powerful networks that aid their graduates for years after their completion. On the low end, quick and easy part-time online MBA programs have virtually no benefits other than the education they provide. (The one I got is at the lowest end possible.)
Full-time MBAs require taking GMATs, going through an admission process, and dropping out of the workforce if accepted. Not only do you stop making money and acquiring work experience, but you go thousands of dollars into student loan debt.
My online MBA required none of that. Thanks to a partnership with a single small university that my employer had, I was able to get automatic admission and full tuition reimbursement for an online MBA, which would not require me to miss a day of work.
So, it’s impossible for me to judge the value of all MBAs, but I can give some insight.
If you want to break into a high-powered, exclusive industry like management consulting or investment banking, there is no substitute for a premium, full-time MBA. I have never worked in these industries and I’m sure some people break in without one, but it’s common knowledge that most people going into these industries have prestigious business school degrees.
For career changers seeking to move to a more mainstream business industry, or those just looking to increase their market value and not change careers (like me), I simply cannot see how a full-time MBA could be worth it. The marginal increase in salary cannot possibly make up for hundreds of thousands of dollars in debt, not to mention all the lost time in the workforce. Again, I’m no expert on this topic, but that’s my take.
A part-time or online MBA, however, is a much different story. The ability to continue working while earning it makes it comparable to other credentials like the CFA. In comparison to a CFA, an MBA is easier because college classes are easier to pass than professional exams. However, they are generally much, much more expensive. They also cover different topics, so it’s not really an apples-to-apples comparison, but it does give some context.
The online MBA supposedly provides a similar education to full-time MBA programs, but that’s debatable. Nothing about this education alone is game-changing; but, it does help think like management or an executive. It is certainly lacking in knowledge that can be directly applied to your career, compared to the CFA.
The reason we are diving into so much detail about MBAs is to set up my conclusion that I do not believe my specific online MBA would have been worth it for the price my company paid. Overall, it cost more than four times the total cost of my CFA. (And my MBA was among the cheapest out there…the average cost is much higher.)
However, since I paid zero dollars for my MBA, and it was much easier to obtain than any of my other credentials, I have to say it was “worth it” for me. I now have a graduate degree, which is meaningful to me. I also gained some valuable insights about business management and learned how MBAs think.
On my arbitrary 5-point scale, I’d give my MBA a 2.5 out of 5 on value for me. The type of MBA I got just didn’t have a big impact, but it also didn’t hurt either.
The costs of credentials
Obtaining a credential of value has certain monetary costs: books, study materials, registration fees, etc. Many of these will be covered by your employer, so monetary costs may not even be a consideration. For non-collegiate degrees, these costs are usually insignificant to the value they provide for the rest of your career. For college degrees, the monetary cost is much higher, and you will need to make an honest evaluation with yourself about how much you can get out of it, as I explained above with my MBA.
However, credentials have many other hidden costs.
Firstly, is this credential holding you back from obtaining other skills? I was able to obtain mine while working a full-time job, gaining full experience in my field. Your value and success are ultimately driven by the work you do, not the credentials you have. While credentials can help you get that work done and provide opportunities you could never otherwise get; it’s important to remember that they are not the endgame. Make yourself valuable in ways other than the letters after your name.
Secondly, is this credential ruining your personal life? We all talk about work-life balance, but not enough about study-life balance. I was able to obtain mine with relatively little effort, but that does not mean everyone does. Most credential processes are marathons, not sprints. Willpower alone is not sustainable. You need to set up a system and a pace that works for you, allowing the credential process to become a natural part of your life, at least for a while, without ruining it.
Conclusion
Credentials can have extremely high value and can benefit your career in many different ways. However, they are not a golden ticket to success. Those who prioritize only credentials and not their jobs will ultimately fail. However, those with credentials have a massive advantage over those without, despite what the detractors might say. Often, those bashing credentials are the same people who tried and failed. There are many ways to achieve success and credentials are only one, but they are a massively powerful one.
Credentials are “worth it” if they can be obtained in conjunction with other high-value skills and can be completed without sacrificing your personal life.