Menu burger Close thin Facebook Twitter Google plus Linked in Reddit Email
Tap on the profile icon to edit
your financial details.

cfp vs cpa

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. This article will look at the CPA vs. CFP question what separates these certifications so you can choose the right one for you – whether you’re looking to get certified or you’re trying to find a financial advisor.

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. 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 People Do With the Certifications

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.

General Requirements for Becoming a CPA

cpa vs. cfp

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.

The Takeaway

cpa vs. cfp

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 are 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.

Things to Consider for Finding a Financial Advisor

  • This article covered 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 this list of the top financial certifications.
  • If you don’t know how to get started in searching for a financial advisor, you should try SmartAsset’s financial advisor matching tool. Simply answer some questions about your situation and your goals. We will then match you with up to three advisors in your area who suit your needs. This takes much of the work out of figuring out which advisor will be right for you.
  • If you are largely on track to meet your goals and don’t need a particularly individualized experience, consider a robo-advisor. Most robo-advisors are cheaper than a traditional, human advisor and they require very little work on your end. (SmartAdvisor can also match you with a robo-advisor if that’s what you’re looking for.)

Photo credit: ©, ©, ©

Derek Silva, CEPF® Derek Silva is determined to make personal finance accessible to everyone. He writes on a variety of personal finance topics for SmartAsset, serving as a retirement and credit card expert. Derek is a member of the Society for Advancing Business Editing and Writing and a Certified Educator in Personal Finance® (CEPF®). He has a degree from the University of Massachusetts Amherst and has spent time as an English language teacher in the Portuguese autonomous region of the Azores. The message Derek hopes people take away from his writing is, “Don’t forget that money is just a tool to help you reach your goals and live the lifestyle you want.”
Was this content helpful?
Thanks for your input!

About Our Retirement Expert

Have a question? Ask our Retirement expert.