CPA Vs CFP: Make the Right Choice! (2024)

Stand out to recruiters and jumpstart your accounting career with this foolproof guide to success.

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When deciding on an accounting vs finance professional route, it’s critical to understand the distinctions between CPA and CFP. A CPA is a certified public accountant who performs audits or prepares complex tax returns for an organization. A Certified Financial Planner (CFP) has expertise in the areas of financial planning, taxes, insurance, estate planning, and so forth.

If you intend to settle in the United States and pursue a career in public accounting, becoming a CPA is your best option. If you want to become a financial advisor and help people with financial planning, choose a CFP career.

Certification and License - CPA vs CFP

To obtain the CPA or CFP license, you must pass the respective exams. But, the first step to preparing for the exams is understanding the certification requirements for each. Here’s a look at what you can expect:

CPA Exam and License

The CPA Exam consists of four sections that are each four hours in length, requiring a total of 16 hours of test-taking time. The four single sections of the exam are:

• Auditing and Attestation (AUD)
• Business Environment and Concepts (BEC)
• Financial Accounting and Reporting (FAR)
• Regulation (REG)

All four sections must be passed within a 18-month window with a score of 75 or higher in each section. CPA state licensure requirements vary but typically require 150 hours of schooling (30 hours more than the standard 120-hour accounting bachelor's degree). In addition to verifiable experience and a passing score on the Uniform CPA Examination, the qualifications for obtaining a license are always a passing grade on the Uniform CPA Examination.

A CPA might take up to three years to complete. This includes a year to complete your additional credit hour requirements and one to two years of relevant work experience.

CFP Certification and License

The CFP certification can take anywhere between 18 to 24 months. The CFP exam is developed, managed, and scored by The Certified Financial Planner Board (CFP Board) of Standards, Inc., in the United States. It is a substantially less time-consuming program than the CPA because only one comprehensive exam must be passed.

Before you qualify for the CFP designation, you must have substantial professional experience. This requires either 4,000 hours of CFP-compliant apprenticeship or 6,000 hours of financial planning-related professional experience. Candidates must complete the required hours of experience between five and ten years prior to taking the CFP examination.

Exam Fees - CPA vs CFP

CPA Exam costs vary depending on your jurisdiction – when and where you take the exam, and which CPA Review course you decide to use, the total cost of obtaining licensure can range anywhere from $2000- $6000 (including applicable taxes).

Depending on when you sign up for the class, the total cost of the complete CFP program will range anywhere from $825 to $1,025 (including applicable taxes). The fees for early registration are $825, the regular registration charge is $925, and the late registration fee is $1,025 accordingly.

Exam Difficulty - CPA vs CFP

The CPA Exam is regarded as one of the most difficult professional examinations. It is considered challenging because of the complexity of topics covered in the four sections of the exam. Each section of the exam has several question types and topics that cover a variety of accounting concepts. Answering the questions correctly requires critical thinking and higher-order skills -- tasks that are now expected from newly-licensed CPAs (nlCPAs).

The CPA Exam pass rate is indicative of the difficulty of passing the examination. In order to excel on the exam, extensive study, regular practice, and the utmost dedication are essential. In 2022, the cumulative pass rate for all four sections of the CPA Exam ranged between 45-61%. The pass rate for the CPA Exam was 54% overall.

Comparatively, CFP is easier than CPA. The historical pass rate has been above 60%, which indicates that the tests are of a difficulty level that is considered to be moderate. The overall pass rate for the examinations that were carried out in 2022 was 64%.

Job Opportunities - CPA vs CFP

A Certified Public Accountant (CPA) is a highly valuable certificate for accountants seeking to progress in their careers. It also opens the door to a vast array of job prospects. In addition, the certification demonstrates to employers that they have the confidence and skills needed to achieve challenging objectives. The overall job of a CPA consists of helping companies, individuals, and organizations make sense of financial data. Many CPAs aspire to work for one of the world's four largest professional services firms - PwC, Deloitte, EY, and KPMG.

Chartered Financial Planners (CFP) help individuals and families on a regular basis. Their work is predominantly educational. CFPs often assist customers in achieving retirement-related financial objectives and advising consumers on their insurance needs. CFPs can work for firms, but they typically operate their own enterprises. While a CFP’s advice is essential in the final decision-making process for individual and family investments, their work is ultimately more beneficial if they can transition from making financial decisions to empowering their clients to "take the wheel".

Salary and Career Path - CPA vs CFP

According to the Bureau of Labor Statistics (BLS), an accountant with a bachelor's degree can earn more than $70,000 on average, but a CPA can earn around $119,000. Certified Financial Planner (CFP) salaries in the United States range from $39,300 to $187,200.

However, numbers do not always reveal the entire picture. Identifying the optimal career path in any sector can be challenging. Since entrepreneurs, top executives, and entry-level professionals contribute to the "average" pay, the average is skewed. Check out local labor and employment statistics for more insight so you can make an informed decision about your future career.

Top 5 Careers for CPA and CFP

If you intend to settle in the United States and pursue a career in public accounting, becoming a CPA is your best option. If you want global mobility, however, choose CFP. Here’s a list of the top 5 careers in CPA and CFP:

Watch the video to learn the 3 rules for getting an increased salary as a certified accountant.

The Bottom Line

When it comes to providing financial advice, CFPs, and CPAs share some similarities. Both professionals are assisting people with financial management.

A certified public accountant's primary concentration is on clients' tax needs. CPAs are experts in handling matters that are significantly more complicated. Businesses, affluent individuals, and people with complicated financial situations can all benefit from the assistance of certified public accountants.

On the other hand, financial planners provide clients with guidance on a wider range of financial topics, including savings and investments. Customers frequently want simple general guidance or assistance in getting out of debt, or a solid plan to save for retirement. CFP’s are accountable for any concerns that pertain to your finances in a manner that is easy for you to comprehend. A CFP will help you evaluate the potential downsides of those investments before you make any.