CPA vs CFP: Which is The Best Career Choice?

The finance industry is booming with a lot of job opportunities and career avenues. If you’re keen on stepping into the finance industry, having a fair idea of two of the most popular certifications, that is, Certified Public Accountant (CPA) and Certified Financial Planner (CFP) is crucial.

Let’s analyse the major differences between CFP and CPA.

What is CPA?

A Certified Public Accountant (CPA) as the name suggests is a professional in accounts and finance. They can audit resorts, file and manage taxes, consult businesses on important issues of finance, and ensure that the company works within the legal framework.

The CPA is a prestigious certification that is awarded by the American Institute of Certified Public Accountants (AICPA). Thus, if you aspire to work with an American firm or work for US-based clients, this is a must-have certification.

Want to know more about The US CPA Course? 

What is a Certified Financial Planner (CFP)?

A CFP is a professional who specialises in financial planning, managing taxes, insurance, retirement planning, estate planning, etc., for individual clients. They may practise independently or work with financial planning companies, wealth management firms, banks, insurance companies, or even non-profit organisations.

The CFP Certification is a globally recognised certification that is awarded after a rigorous process of learning, evaluation and gauging the relevant experience of the candidate. The CFP Board in the US is the nodal agency overseeing the certification process and setting standards to ensure quality financial professionals in the domain. However, it has affiliates and partners across the globe that oversee the CFP certification process. For instance, in India, it is overseen by the Financial Planning Standards Board (FPSB).

Want to know more about The CFP Course? 

CPA vs CFP: Major Differences

Organising Body

As mentioned earlier, the CPA and CFP certification have their origins in the USA. While the former is overseen by the American Institute of Certified Public Accountants (AICPA), the latter is overseen by the CFP Board with its affiliates and partners spread across the globe.

Exam Eligibility

The eligibility criteria for both certifications differ. In the case of CFP, a person needs to have a bachelor’s degree preferably in the commerce discipline.

Moreover, they must have completed a course in CFP through accredited institutions. For instance, in India, IMS Proschool has officially partnered with the FPSB to offer comprehensive online and offline courses to help students clear the CFP examination and gain certification. At the same time, it must be noted that CFP Certification is granted to only those individuals who meet the eligibility criteria of work experience. That means, you must have either worked under a CFP for a year or you have 3 years (6,000 hours) of work experience in the finance field in general.

In the case of CPA, various states have their eligibility criteria for students but, a bird’s view of the CPA eligibility criteria in India is as follows: a candidate must have 120 accounting credits. In Indian education, this translates to 16 years of education. Moreover, you don’t need any work experience to clear the exams but for certification and licensing 1 or more than a year’s experience is necessary.

Exam Difficulty

The exam difficulty of both courses is moderate; however, the passing percentage differs. As of July 2024, the passing percentage for CFP exams is 65% of the total registered students. On the other hand, the overall passing rate of CPA is around 50%. That said, individual interests and competencies play a key role in determining whether the course content is manageable or difficult.

Syllabus

The syllabus of CFP courses covers the following four modules:

• Investment Planning Specialist
• Retirement and Tax Planning
• Specialisation in Risk and Estate Planning
• Integrated Financial Planning

To know more about the CFP course content, check out IMS Proschool’s CFP Course.

On the other hand, the syllabus of CPA consists of 3 core subjects and 1 discipline. The course content is as follows:

• Core Subjects:

1. 1. Auditing and Attestation (AUD)
   2. Financial Accounting and Reporting (FAR)
   3. Regulation (REG)

• Discipline (Choose Any 1 from 3):

1. 1. Business Analysis & Reporting (BAR)
   2. Information & Systems Controls (ISC)
   3. Tax Compliance & Planning (TCP)

Still Feeling Confused Between These 2 Courses? Want More Clarity?

Exam Pattern

The CFP examinations test your knowledge and ability to solve real-world challenges in the field of financial planning. It’s a six-hour long exam, with 2 sections of 3 hours each. Altogether, you’ll have to attempt 170 Multiple-choice questions based on which your final scoresheet will be prepared.

Also Read – Course Duration of Certified Financial Planning (CFP)

On the other hand, the CPA examination consists of 4 sections (3 core subjects and 1 discipline). Each section is assessed separately and candidates must score at least 75 marks in each paper to qualify for the CPA Certification. The papers are majorly MCQ-based with an additional component of test-based simulations wherein candidates’ problem-solving ability is tested. Each paper would be of 4 hours (i.e., 16 hours altogether).

Cost

If we compare the tuition fees, the examination and licensing fees, CPA is costlier than CFP. Here’s a breakdown:

• CFP Registration fee: To undertake CFP exams, a candidate first needs to register with the FPSB India and then apply for CFP Examination. Typically, the registration fees range is INR 18,000.
• CFP Course fees: IMS Proschool offers CFP Courses in both online and offline modes. The fee for the former is INR 40,000 and INR 50,000 for the latter. By enrolling for this course, you’ll get a chance to learn from industry experts and access one-on-interactive classes, comprehensive study material, mock tests and placement support.
• CFP Examination fee: CFP consists of 4 papers. The fees for the specialist module exam is INR 6,750 per module and the fees for the integrated financial planning module is INR 13,000 per module.
• CFP Certification Fee: After clearing all the examinations, a candidate needs to apply for CFP Certification which costs between 10-14k. Moreover, the certification has to be renewed every year with a small renewal fee set by FPSB. The renewal fee is 10.5K per year.
• On the other hand, the CPA Exams are conducted by AICPA, with costs in USD. The average cost of US CPA in India is around 3.5-4 lakhs. This cost includes course fees, exam fees, study materials, and other related expenses.

Duration

If we talk in terms of the time required to become a CPA or a CFP, the CFP is more intense than the CPA.

On average, to become a certified financial planner you would need to spend 12-15 months, including the course duration, exams and work experience. On the other hand, to become a certified public accountant, you would spend around 18-24 months (including the time taken for preparation and exams).

Salaries

The scope for CFP is ever-expanding. From self-employment to working in various firms, they can earn a handsome salary and advance their career. As per the CEO of FPSB India, the average salary of a certified financial planner in India is between 5-6 lakhs per annum while those with 3-4 years of experience can easily get 10-15 lakhs.

Also Read – What CFP’s Earn In India In Different Job Roles

On the other hand, a CPA can earn anywhere between 6-10 lakhs per annum in India. This may increase based on the years of experience a person has. However, in the USA, a CPA can earn between $100,000 to $150,000 depending on the state they’re working in.

Also Read – How Much Does a CPA Earn in the US, India & Big 4?

Exam Date

FPSB conducts the CFP specialist exam in the third week of every month and the Integrated Financial Planning exam every alternate month.

On the other hand, the CPA examinations are conducted in an 18-month testing window that begins in February. The CPA examinations are conducted 4 times a year.

Code of Ethics

For CFPs, the code of ethics is set by the CFP Board US; however, regional variations can be found (as in the case of India (FPSB)). In general, the broad principles that CFPs must adhere to are honesty, integrity, professionalism, competition, confidentiality, and so on. These principles are put in place to ensure that CFP professionals uphold the highest standard and that public trust is maintained in them and the licensing authority.

Similarly, the AICPA’s Code of Professional Conduct guides the CPAs’ conduct in the real world.

Here’s A Summary Of The Differences Between CPA vs CFP

CFP vs CPA – Which Is Right For You?

If you’re keen on acting as a planner, manager, or consultant for individual clients, CFP is for you.

On the other hand, if you excel in bookkeeping, auditing, managing taxes, and planning to step onto the corporate ladder and help businesses tap into their hidden potential, CPA is the way forward.

Again, if you’re still having second thoughts, it’s better to talk to a career counsellor. In case you’re stuck, you can talk to a Career Counsellor at IMS Proschool for free.

FAQs

CPA vs CFP: Which one is better?

CPA and CFP both have their pros and cons. However, if you’re keen on working in the US as a public accountant, a CPA can open a lot of doors for you. On the other hand, CFP can give you increased mobility as the CFP Certification is recognised by 27 countries throughout the world.

Can one pursue both CPA and CFP?

Yes, you can pursue both. It will give you an added advantage in the industry, allowing you to easily hop jobs for better remuneration and perks.