Written by: Mary Gerardine

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The Certified Financial Planner (CFP) and Certified Public Accountant (CPA) qualifications are two of the most prestigious credentials in the finance industry. While both signify a high level of expertise within this sector, there are several key differences between them in terms of their scopes and career prospects.

In this CFP vs CPA article, we’ll explore what each of each qualifications involve, as well as these primary differences, in order to help you identify which designation is the right one for you.

What’s the Difference?

Before you can decide which of these professional credentials will suit you best, you first need to understand how they differ.

What is a CFP

The CFP is a rigorous designation offered by the Certified Financial Planner Board of Standards, Inc. (CFP Board) that demonstrates an individual’s specialized knowledge in the areas of financial planning, taxation, insurance, estate planning, and retirement savings.

Unlike other financial planners who merely hold a license to buy and sell securities on someone else’s behalf, CFPs are specifically licensed to offer guidance and are bound by the CFP Board’s strict ethical and professional standards.

Below, we’ve broken down some of the key details about the CFP designation:

  • Educational Focus: The CFP program focuses on providing candidates with knowledge to confidently offer holistic financial planning advice to clients in a number of common areas, such as insurance, tax, and retirement
  • Time Investment: Obtaining the CFP designation demands a significant time commitment, with candidates often needing to spend between 4,000 to 6,000 hours over several years. On top of this, CFPs must complete regular continuing education requirements in order to uphold their status
  • Job Prospects: As a globally-recognized gold standard in finance, the CFP designation opens doors to a number of career paths in financial planning, ranging from roles in major banks to more specialized niches, or even academic positions in teaching and research
  • Fiduciary Duty: A key aspect of the CFP designation is its strong focus on fiduciary duty. This forces CFP professionals to prioritize their clients’ interests above their own in order to adhere to the CFP Board’s strict ethical and professional standards

If you’re considering a career as a CFP, one of the best ways to give yourself the best possible head start is to invest in high-quality study resources.

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What is a CPA

Offered by each state’s Board of Accountancy, the CPA is the professional designation that individuals must obtain in order to practice as Certified Public Accountants (CPAs) within a state.

In addition to the typical responsibilities of regular accountants, CPAs are also qualified to perform specialist tasks such as conducting audits, reviewing statements, and representing clients before the IRS.

We’ve summarized some of the key points to be aware of regarding the CPA qualification below:

  • Educational Focus: The CPA curriculum is designed to provide a well-rounded education that prepares individuals not only for traditional accounting roles but also for a wide range of financial and wealth management positions in various industries
  • Time Investment: Candidates typically invest between 300 and 400 hours preparing for the CPA exams. In addition to this, candidates will then have 18 months to complete all four sections of the CPA exam, with starting dates that vary by jurisdiction
  • Job Prospects: Due to the higher level of education and expertise of CPAs, these professionals are able to take on a diverse range of career paths, often working in areas such as corporate finance, government accounting, and even specialist tax advisory and preparation roles

Certification Requirements

Both the CFP and the CPA designations have specific requirements you must satisfy in order to obtain these credentials. Below, we’ve provided a summary of the specific requirements needed for each designation.

How to Become a CFP

In order to become a CFP, there are certain educational, examination, and ethical requirements you’ll need to meet.

Educational and Examination Requirements

All aspiring CFP professionals are required to complete a CFP Board Registered Program or equivalent approved coursework. This program will cover various subjects, including investment, insurance, tax, and retirement planning.

After completing this coursework requirement, candidates must pass the CFP exam. This six-hour exam is conducted over a single day and is made up of 170 questions designed to assess your proficiency in applying their financial planning knowledge to practical scenarios.

Within five years of successfully passing this exam, candidates are required to obtain a bachelor’s degree from an accredited college or university in order to finally become a CFP.

Experience Requirements

The CFP Board requires all candidates to fulfill an experience requirement, which can be completed in one of two ways:

  • The Standard Pathway: 6,000 hours of professional experience related to qualifying activities in the financial planning process; or
  • The Apprenticeship Pathway: 4,000 hours of apprenticeship experience in qualifying activities completed under the supervision of a current CFP professional

This experience should be completed within the 10 years before or five years after successfully passing the CFP exam.

Post-Qualification Requirements

After qualifying as a CFP, there are certain post-qualification requirements candidates will need to meet in order to continue using the letters CFP after their names, including:

  • Committing to a Code of Ethics: Each candidate must pledge their commitment to maintain the CFP Board’s Standards of Professional Conduct, which involves consistently abiding by its core principles of integrity, objectivity, competence, fairness, confidentiality, professionalism, and diligence
  • Completing CE Courses and Paying Renewal Fees: All candidates must complete 30 hours of continuing education (CE) courses on a biennial basis, as well as pay a renewal fee

Although qualifying as a CFP professional can be more grueling than many other financial designations, it’s well worth the effort due to the number of career opportunities it could open up for you.

How to Become a CPA

Just like with CFPs, you’ll need to satisfy certain educational, examination, and ethical requirements in order to become a CPA.

Educational and Examination Requirements

The first step to qualifying as a CPA is to obtain a bachelor’s degree from an accredited educational institution. While each state sets its own specific educational requirements for candidates to meet, it’s common to be required to complete a minimum of 150 credit hours of college, often with a specific number of hours in accounting or other related subjects.

Since typical bachelor’s degrees only last 120 credit hours, many aspiring CPA candidates decide to complete a master’s in accounting or an alternative graduate-level course in a similar subject to make up the difference. Be sure to check the Board of Accountancy in your state for more detailed information about its specific educational requirements for CPA licensure.

After meeting your state’s educational requirements, you’ll be eligible to sit the Uniform CPA Exam, which you’ll need to pass in order to qualify as a CPA. This 16-hour test will assess your ability to apply knowledge to real-life situations across four sections: financial accounting and reporting, regulation, business environment and concepts, and auditing and attestation.

Experience Requirements

The amount of work experience needed to become a CPA varies between states, but you can expect to need at least two years of experience in a relevant field such as accounting, tax, or auditing. In some states, only work experience that has taken place under the supervision of an active CPA is considered valid.

You can familiarize yourself with your state’s specific licensing criteria using the list provided on the National Association of State Boards of Accountancy (NASBA) website. This body is responsible for supervising the licensing procedures across all 55 states.

Post-Qualification Requirements

While the requirements can differ by state, CPAs generally need to complete around 40 hours of Continuing Professional Education (CPE) annually in order to maintain their certification. This commitment to ongoing learning ensures that CPAs are up-to-date with the latest accounting practices, tax laws, and industry standards.

Both CFP and CPA designations require a significant investment of time, effort, and money, and both come with their unique sets of challenges. Regardless which you choose, starting with the right resources is crucial to ensuring your success in these designations’ exams.

Which is Right for You?

Ultimately, the choice between the CFA and FRM designations should be a personal decision based on your aspirations for the future of your career. That being said, there are several factors you should consider before making a final decision.

  • Experience: If you already have some background in personal finance planning or advising, the CFP designation might be a logical next step for you, while a background in accounting, tax, or auditing will make the path toward becoming a CPA much easier
  • Career Goals: If you’re keen to help people directly, the CFP is a good option as it prepares you for roles that involve direct client interaction in planning their financial futures. In contrast, if you’re inclined towards roles in corporate finance, auditing, tax consultancy, or regulatory compliance, the CPA designation is more appropriate
  • Budget: Generally, the CPA is more expensive than the CFP due to additional licensing fees and the cost of maintaining the CPA license. However, the total cost can vary based on the resources you choose and the jurisdiction you’re looking to qualify in. For example, the CPA exam fee in Missouri starts at $1,000, not including the required additional coursework for those who haven’t met the 150-semester-hour requirement

Your choice between the CFP and the CPA should be guided by your career goals, existing experience, and financial capacity to undertake the necessary exams and educational requirements. Ultimately, whichever designation you end up deciding is better for you, selecting the right resources is key to succeeding in your exams later down the line.

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Is the CFP better than the CPA?

Determining whether a CFP is “better” than a CPA depends on your career and financial goals. CFPs specialize in comprehensive financial planning, investments, and retirement while CPAs focus on accounting, auditing, and asset allocation tax advice. Both are highly respected but serve different financial aspects, so one is not universally “better” than the other. Learn more in our CFP vs CPA comparison.

Is the CFP exam harder than the CPA?

The difficulty of the CFP and CPA exams will ultimately vary depending on your personal strengths. That being said, the CPA seems to be statistically harder, with pass rates that range between 45% and 61% across its four sections. In comparison, the CFP exam has a pass rate of around 60%. See our What is a CFP article for more information.

How much do CFPs and CPAs make?

CFPs generally earn a median annual salary of $94,170 while CPAs can earn from $88,000 to $297,000 with the potential for higher earnings due to specialization and work experience. Both careers offer strong earning potential, though the amount you can expect to make varies widely depending on your experience, location, and specialization.

How many people fail the CFP exam?

The pass rate for the CFP exam varies by year but generally hovers around 60%. Many test-takers find that they struggle in the CFP exam due to the broad range of topics covered and the focus on practical application of knowledge rather than simple recall.

Can you pass the CFP in six months?

Passing the CFP exam in six months is feasible but challenging, especially if you’re starting from scratch with the required coursework. A dedicated study plan, prior relevant experience, and potentially accelerated coursework could make a six-month timeline achievable.  Get started and earn your CFP Certification today.

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