CFA vs. CFP: Which is right for you?

CFA vs. CFP: Which is right for you?


Are you looking for a financial advisor? Find out the difference between two common types of advisor certifications, CFA® vs. CFP®, and discover which is right for you. 

Financial advisors help individuals, couples, families, small business owners and corporations work toward meeting their financial goals. They provide professional advice to assist clients or employers in making sound investment decisions. For example, financial advisors can provide tax management guidance.

Chartered Financial Analysts (CFAs) and Certified Financial Planners (CFPs) are among common types of financial advisor certifications.  When seeking out professional services, it’s important to understand the difference between a CFA and CFP certification.

This article takes a closer look at CFA vs. CFP certification.

What is a Chartered Financial Analyst (CFA)?

A Chartered Financial Analyst (CFA) is a globally recognized financial advisor certification issued by the CFA Institute. Many consider CFA certification to be one of the most prestigious titles in the financial industry due to the intense requirements. To earn the CFA certification, financial professionals must not only meet stringent education and professional experience requirements, but they must also pass three 6-hour examinations and complete 20 hours of continuing education each year.

In some cases, large corporations, such as hedge and mutual fund firms employ those who have a CFA certification. CFA certification holders specialize in wealth management, trading, portfolio management, auditing and financial planning. For example, someone who has obtained the CFA certification may conduct investment research and risk analysis before making investment decisions, such as purchasing stocks, bonds and securities, to help clients grow their wealth.

While many CFA certification holders work for large corporations, they can work with individual clients or open their own investment firms. In this capacity, they help individuals manage their portfolios based on each client’s financial goals. For instance, they can help clients understand anticipated risk and expected return on investments when choosing investment opportunities.

What is a Certified Financial Planner (CFP)?

An advisor with a Certified Financial Planner (CFP) certification, on the other hand, typically offers individual financial planning services. However, it’s not unheard of for CFP certification holders to work in the financial department of large corporations. More commonly, CFP certification holders work for investment and brokerage firms or operate their own investment service company.

These professionals must also meet intensive education and work experience requirements and complete two 3-hour exams administered by the Certified Financial Planner Board of Standards as well as 30 hours of continuing education during the reporting period. CFPs focus on individual financial planning services, such as savings, investments, insurance and estate planning. They help individuals and families develop financial planning strategies to meet both short-term and long-term goals. For instance, a CFP certification holder may help clients develop an investment plan to minimize their tax burden, buy a home, save for their children’s college fund or prepare for retirement.

Main differences between CFP vs. CFA

It can be easy to confuse the titles CFP vs CFA, but there are a few major differences that can help you understand the role of each professional. Here’s a look at the three prime differences between a CFA and CFP.

Type of clients

CFA certification holders typically work with high-level corporate clients or high-net-worth individuals. Their primary roles are portfolio and wealth management, with the goal of helping their clients grow wealth over time. CFP certification holders, on the other hand, often work with individual clients or couples. They help clients make sound investments for meeting short- and long-term goals. When comparing CFP vs. CFA salary bases, CFAs tend to earn significantly more than CFPs. Therefore, their service fees may be higher too, but this depends on experience and expertise.

Exam topics

While both the CFA and CFP exams are quite difficult, the CFA exam is known to be one of the most, if not the most, challenging certification exams in the financial industry. It consists of three 6-hour exams that must be completed and passed in sequential order. This exam is so difficult that nearly 50% of test takers fail the first time. The CFP exams cover topics such as investments, asset valuation, portfolio management, risk analysis, qualitative methods, derivatives, economics and wealth management.

The CFP exam is also a multistep test that consists of two 3-hour sessions. It includes 170 multiple choice questions that cover everything from risk management to financial planning topics, including tax, estate, retirement, insurance and education planning. While still difficult, the CFP exam has a 60% passage rate.  

What are the requirements for becoming a CFA?

The CFA Institute grants CFA certifications and administers the CFA exam. Before taking the CFA examination, one must complete a bachelor’s degree in finance or a related field or have the equivalent in educational credits plus relevant work experience. Test takers must also have at least 4 years of professional work experience in a financial role. Since this is a globally recognized certification, the CFA Institute also requires test takers to have an international passport prior to registration.

Once these requirements are met, the next step is to complete all three CFA examinations. To earn a CFA certification, the test taker must take and pass these exams in sequential order. Individuals can only take the first exam in June or December, and the second and third exams are only available in June, so it takes a minimum of 2 to 3 years to finish all three exams.

Exam 1 covers basic financial investment topics, while Exam 2 and Exam 3 focus on more specific areas of wealth management, such as asset valuation, risk analysis and portfolio management. The CFA Institute states that test takers spend an average of 300 hours per test studying. All CFAs must also adhere to a strict code of ethics.

What are the requirements for becoming a CFP?

To become a CFP, one must first complete the educational and experience requirements set by the CFP Board. This includes obtaining a bachelor’s degree in finance or a related field as well as completing specific financial planning courses. Test takers also need to have documented at least 6,000 hours of financial planning work experience and 4,000 hours working in an apprenticeship or similar role.

Once these requirements are complete, a prospective CFP certificant may sit for the CFP exam. This exam consists of two separate 3-hour sessions with a 45-minute break between. The combined exam includes 170 multiple choice questions that cover a range of individual financial planning topics, including tax accounting, insurance planning, estate planning, risk analysis and personal finance.

CFP certificants must also complete a specific set of continuing education requirements annually. Additionally, they must adhere to a strict code of conduct, which, like all fiduciaries, requires them to always put their clients' interests first.

Other types of financial professional credentials

CFA and CFP certificants are just two out of numerous professionals in the financial industry. In fact, the Financial Industry Regulatory Authority (FINRA) lists more than 200 titles and designations in the financial sector.

While you don’t have to know what every single one of these professionals has to offer, you should have knowledge of the most common types of financial advisors. Below is a closer look at four of the most common types of professionals in the financial industry.

Certified public accountant (CPA®)

Certified Public Accountants (CPA) are most well-known for their role in tax planning and preparation. Depending on their specific role, they offer these services to individuals, families, small business owners, companies and corporations. But that’s not all CPAs do. They also provide financial consulting services, handle professional financial audits, compile financial statements for clients and complete other similar duties. To become a CPA, a person must hold a bachelor’s degree in the financial field and successfully pass the CPA examination.

Chartered Financial Consultant (ChFC®)

Chartered Financial Consultants (ChFC) provide professional advice and services regarding financial planning and wealth management. To obtain this certification, a person must have worked in the business field at least 3 out of the last 5 years or have the required combination of work and experience. They must also complete an eight-course program of study and successfully pass all eight exams within the program. These courses cover a range of topics, including personal finance, investments, income taxation and tax, estate and insurance planning.

Chartered Alternative Investment Analyst (CAIA)

As the name suggests, Chartered Alternative Investment Analysts (CAIA) assist clients with managing alternative investment options, such as real estate, venture capital, commodities, derivatives, infrastructure and private equity. Before taking the CAIA exam, the person must have at least a bachelor’s degree and 1 year of experience. They must also pass both the Level 1 and Level 2 examination, which consist of 200 and 100 multiple choice questions, respectively.

Chartered Retirement Planning Counselor (CRPC)

Chartered Retirement Planning Counselors (CRPC) primarily focus on helping clients financially plan for retirement. They help clients develop long-term investment strategies, including tax planning, insurance planning and estate planning, to build wealth for retirement. While there are no prerequisites for obtaining a CRPC designation, they must complete a comprehensive program and pass the final exam. The course covers topics such as Social Security planning, healthcare options, tax planning and estate planning.

Our take

When looking to hire a financial advisor, it’s important to know the difference between these common types of financial certifications. This understanding can help you determine which advisor is right for you. When it comes to CFA vs. CFP certificants, a CFA helps high net-worth clients and corporations grow their wealth, while a CFP helps individual clients prepare for their future and meet their financial goals.




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Certified Financial Planner Board of Standards Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design), and CFP® (with flame design) in the U.S., which it authorizes use of by individuals who successfully complete CFP Board's initial and ongoing certification requirements.