CPA vs. CFP: Which Is Right for You?

When you work with a financial advisor, advanced certifications tell you that he or she has put in the work and has the qualifications to do advisory work. Two common certifications are the certified public accountant, or CPA, and certified financial planner, or CFP. There is overlap in what a financial advisor with these certifications can do, but individuals tend to do specific types of work. The CPA vs. CFP question of separates these certifications is actually fairly complex. Whether you’re looking to get certified or you’re trying to find a financial advisor, this comparison will help.

What Is a Financial Advisor?

A financial advisor is an expert who helps clients achieve their financial goals. Clients may be individuals, but there are also advisors who work with groups and firms. Some advisors will work with clients from a wide range of backgrounds and financial situations. On the other hand, other advisors will specialize. For example, there are some advisors who focus specifically on taxes.

There are also advisors who work predominantly with professional athletes, with women or with business owners. In some cases, an advisor will demonstrate his or her specialization by going through a certification program. Two common programs are the CPA and CFP certifications.

CPA vs. CFP: What These Certifications Indicate

CPA stands for certified public accountant. Individuals with this certification typically work with matters of accounting and taxes. CPAs usually work with an accounting firm but the type of clients and the exact services they provide vary widely. Public accounting firms may work with individual clients or large firms. Some CPAs will focus specifically on auditing a company’s financial accounts and others may provide tax consulting.

A CFP is a certified financial planner. That name hints at the type of work that CFPs typically do: financial strategy and management. Common occupations for a CFP include financial planner, wealth manager and financial advisor. CFPs usually work with individual clients.

Both of these certifications are common but CFP is the most common certification for a financial advisor. That doesn’t necessarily make it a better certification. It is simply more tailored to helping individuals with financial planning. An advisor with either certification has gone through a rigorous program, which we outline in the next section.

If you are considering one of these certifications to strengthen your resume, the kind of work you want to do should help you decide which to choose, especially if weighing the CPA vs. CFP question.

For a quick comparison, the table below breaks down five common services offered by CFPs and CPAs:

General Requirements for Becoming a CPA

The Association of International Certified Professional Accountants (AICPA) oversees the CPA certification program. In order to gain certification, you will need to become a member of the association. There is an entry fee and there are also annual membership dues.

To become a CPA you will need to complete certain educational requirements and the CPA exam. In addition, you need to have experience in public accounting.

For education, all CPAs need to hold at least a bachelor’s degree and they need to complete at least 150 semester hours. A typical bachelor’s degree is only 120 semester hours, so many CPAs also have a master’s degree. Individual states may have specific educational requirements. For example, Alabama requires an individual’s 150 hours to include at least 24 semester hours of accounting (not including introductory courses), nine hours in financial accounting, three hours in auditing, six hours in taxation, three hours of management accounting, three hours in governmental and not-for-profit accounting and at least three hours in business law. That sounds like a lot but many accounting programs will cover these requirements.

The CPA exam is the same regardless of what state you are in. The types of questions on the exam include multiple choice, real-life simulation and written communication. Those questions cover four sections:

• auditing and attestation
• business environment and concepts
• financial accounting and reporting
• regulation

After passing the exam, you will need to have experience in public accounting before you can get certification as a CPA. The exact experience requirements vary by state. Most states require one to three years of doing accounting work, but the exact type of firm you work with is usually flexible. For example, Alabama only requires one year in public accounting or two years in industry, business, government or college teaching.

General Requirements for Becoming a CFP

The Certified Financial Planner Board of Standards oversees the CFP certification. In comparing CPA vs. CFP, CFP applicants also have to meet education requirements, pass the CFP exam and have proper work experience.

To earn a CFP, you need to have at least a bachelor’s degree with some college-level study in financial planning. Once you’ve met that educational requirement, you can take the exam. The exam takes place in a single day during two three-hour sessions. The exam is entirely multiple choice and it uses real-life situations to assess your ability to use broad financial planning knowledge. As for experience, all CFP applicants must have 6,000 hours of experience with financial planning or 4,000 hours through an apprenticeship program.

If you think this is the right program for you, you can learn more about CFP certification requirements here.

Bottom Line

The CPA and CFP certifications are both common for financial advisors. As a client, either certification should give you the confidence that your advisor has put in the work to master the craft. However, if you’re considering the CPA vs. CFP question, you will probably lean toward a CPA if you are looking specifically for tax help.

If you’re considering the certification for yourself, the program you choose will depend on your particular interests. The CFP program is also less-rigorous overall than the CPA program. CFPs do not require the same specific education and experience requirements that CPAs must have.

Tips for Finding a Financial Advisor

• It can be tough to know exactly what kind of financial advisor you need. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
• This article covers two common certifications but there are many others. For example, an advisor with a CLU is probably your best choice if you want life insurance help. As you go through your search, visit our guide of the most common financial certifications.

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