PFS vs CFP – Which Financial Planning Designation is For You? – You don’t need to get confused about CFP and PFS. Because if you could CFP exam and CPA exam, you would meet the requirements of PFS already, then you don’t need to sit for PFS exam.
In this article, we will go deep and see what you need to do to earn CFP and PFS designations. But if you ever feel you don’t need CFP, simply enrol yourself for CPA and study hard. As you can’t sit for PFS without qualifying for CPA first, it’s wiser to study well.
So let’s look at both of these certifications in detail and then make an informed decision at the end of this article.
Let’s get started right away.
- CFP vs PFS Infographics
- What is CFP?
- What is PFS?
- CFP vs PFS key differences
- Why pursue CFP?
- Why pursue PFS?
CFP vs PFS Infographics
Reading time : 90 seconds
Lets understand the difference between these two streams with the help of this CFP vs PFS Infographics.
PFS vs CFP Summary
|Certifications organized by||Personal Financial Specialist is a designation given to the CPAs by The American Institute of Certified Public Accountants (AICPA). But to get PFS designation all CPAs must pass PFS exam. If you’re a CPA and you’ve cleared CFP or ChFC (Chartered Financial Consultants) exam, you don’t need to sit for PFS exam; you would be then deemed to have met the requirement of PFS exam.||On the other hand, CFP is being organized by CFP Board. CFP Board is a non-profit organization and serving its students since 1985.|
|Number of levels||To sit for PFS exam, you first need to choose 6 CPE (Continuing Professional Education) courses covering all areas of financial planning with 131 hours of self-study text.||On the other hand CFP also has only one level to clear.|
|Mode/Duration of Exam||PFS exam is a non-disclosed exam. No material (question and answer) is being published and candidates are also not allowed to remove anything from the examination hall. The duration of PFS exam is 5 hours including a 30-minute break. But the break is optional. PFS is a computer based exam and total 160 questions are being asked. Half of these are multiple-choice questions and half are case studies accompanying multiple-choice questions.||To get CFP certification, you need to sit for total 10 hours exam. One four hour session is being organized in Friday afternoon and another two, three hour session is taken on Saturday.|
|Exam Window||July 1-31,2017, Exam Registration Deadline- June 26,2017 ,Early Registration Deadline- May 24,2017|
November 15 - December 15, 2017, Exam Registration Deadline - November 8, 2017, Early Registration Deadline- October 18, 2017
If you’re interested to sit for PFS exam, you have two exam windows in a year. You can sit for exam in the summer, i.e. in July-August or in fall, i.e. in December-January.
|Held thrice in a year in Mar. 14–21, 2017
July 11-18, 2017 and Nov. 7-14, 2017
|Subjects||These are the subjects you need to study if you would like to clear PFS exam.|
-Professional Responsibilities (12%)
-Personal Financial Planning Process (8%)
-Fundamentals of Financial Planning (6%)
-Income Tax Planning (12%)
-Insurance Planning (10%)
-Investment Planning (12%)
-Financial Independence (Retirement Planning) (12%)
-Employee Benefits (6%)
-Estate Planning (12%)
-Charitable Planning (6%)
-Other Personal Financial Planning Issues (4%)
|Let’s look at the subjects (topics) of CFP
-Professional conduct and regulation (7%)
-General Financial Planning Principles (17%)
-Education Planning (6%)
-Risk Management and Insurance Planning (12%)
-Investment Planning (17%)
-Tax Planning (12%)
-Retirement Savings and Income Planning (17%)
-Estate Planning (12%)
|Pass Percentages||As PFS is a continuing professional education (CPE), the pass percentage is not taken into account.||In 2016, the overall pass rate was 70 percent|
|Fees||To sit for PFS exam, you need to pay US $500, if you’re a non-member. If you’re an AICPA member, you need to pay US $400. And if you’re PFP Section Member, you need to pay US $300.||The actual CFP exam cost is $695.However, you can apply up to six weeks before the date. If you do that, your cost would be $595.|
|Job opportunities/ job titles||PFS provides a variety of services to his customers, thus the job opportunities are huge. For example, a PFS can get job in Taxation Planning, Personal Financial Planning, Estate Planning & Retirement Planning. Have a look at the chart below to have an idea about the job opportunity of a PFS.||Job opportunities for a CFP are many. You will work as a Financial Planner in many settings. From tax savings to retirement planning, everything can be done by you. Thus, the potential for a successful career after CFP is amazing. You can get employed as retirement planner, estate planner, financial manager, risk manager and many more.|
What is Certified Financial Planner (CFP)?
- CFP is a designation which is one of its kinds because very few designations create so much value in finance domain. Once you clear your CFP certification, you would be treated as expert in budgeting, retirement planning, insurance coverage planning and taxation. Many organizations are looking for experts like CFP everywhere. All you need to do is to clear the exam.
- CFP is not only a globally recognized, reputed certification, but also people will treat CFP as their trusted advisors because CFP can not only help them in personal finances, but also in tax and personal savings.
- The most important part of a CFP is the ethical standards this certification sets for others. There are many financial planners in the market, but very few take time and pay heed to the ethical grounds of the transactions. In case of CFP, ethical standards are of utmost importance and CFP Board takes special care to train and educate its students in rigorous and strict ethical standards so that they never miss out on the trust of their clients.
- Even if it seems that CFP is hard, the results don’t prove it so. Almost on an average 65-70% have passed this exam in 2015. So there’s no reason for which you can’t clear it if you study hard and prepare well for the exam.
What is Personal Financial Specialist (PFS)?
- PFS is a complete course on financial planning. If you have not done CFP, this is the thing you shouldn’t miss. And as the main pre-requisite is CPA certification, if you do PFS, you will be doubly qualified for financially planning.
- PFS certification is something you should do if you’re interested in financial planning. Why? Because PFS is a comprehensive financial planning exam that includes tax, estate, retirement, investments and insurance planning as well as employee benefits, elder planning and educational planning. There are total 11 subjects you need to cover to be able to clear PFS exam, thus you can’t take it lightly.
- PFS is not a designation that would end once you clear the exam and get the certificate. Every three years you need to complete 60 hours of Continuing Professional Education (CPE) and pay a lump-sum amount to be able to hold the designation.
CFP vs PFS – Key differences
- Exam format: CFP and PFS both are comprehensive exams. But both are different in nature. CFP is a 10 hour mammoth exam whereas in case of PFS, you need to sit for 5 hours. In both the exam, you need to answer 170 (CFP) and 160 (PFS) questions respectively.
- Exam Window: In case of CFP, there are three exam windows – in March, July and November. Whereas in case of PFS, there are two exam windows – July-August and December-January.
- Eligibility: There are mainly two educational requirements for CFP certification. The first requirement is to complete college or university level coursework through a program registered with CFP board, addressing the major personal financial planning areas. The second is to verify that you hold a regionally accredited college or university’s bachelor’s degree or higher certification. The coursework should be completed before you even sit for CFP certification examination. In case of PFS, you need to complete CPA.
- Job Opportunities: If you complete one of these certifications, you don’t need to worry about job opportunities. Moreover, if you complete your CFP first, you don’t need to sit for PFS at all as you would fulfil the requirement of PFS. In case of job opportunities, you would get multiple profiles to choose from – retirement planning, personal financial planning, estate planning, tax planning etc.
- Fees: In case of CFP, you need to pay maximum US $795 (late registration fees). But in regards to PFS, it’s not only a onetime payment of US $300-$500 as you need to complete 60 hours of CPE every 3 years and you need to pay a hefty amount for that.
Why pursue CFP?
- If you’re still wondering why should you pursue CFP, we will ask you why not? You’re getting a world-class course under US $600 and also if you complete this course, you wouldn’t need to worry about job opportunities. Who wouldn’t do this course? Only those who are not passionate about financial planning. If you feel that you’ve slightest inclination toward financial planning, CFP is the right option for you.
- CFP is a course which is very well-planned. Nothing has been added to the course to show off. Rather in designing the CFP course, CFP board has taken care of four pillars, each starting with E – education, examination, experience and ethics.
- CFP is a profession which has been growing multi-fold in every year. It’s expected that financial planning career path would grow by 41% in 2016. If you join now think about what will happen. Your chances of success will increase drastically.
- CFP is a great profession. If you have ever gone through any financial hardship, you would know how it feels. It feels terrible. Once you complete your CFP, you would be able to prevent people from financial hardships. They may not completely avoid mishaps, but they can get prepared for them with your guidance and forecasting.
Why pursue PFS?
- Apparently PFS may seem not so valuable, but the most important reason of pursuing PFS is not only job opportunities or great credentials. But you should do PFS because of on-going educational opportunities. Of course it will cost you money, any education does. But it will give you an opportunity to update you every three years and get ahead of the curve.
- The combination of CPA and PFS are lethal. Once you do PFS after CPA, your expertise in the subjects would be unparalleled. Most companies would love to have you in their boards to seek your expert opinion and receive guidance. And most clients will also prefer you over anyone who has just done CPA.
- If you want to serve multiple clients and want to get expertise in multiple fields, then certainly you should go for PFS. PFS is not easy, but why go for easy when you can separate yourself from the crowd?
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In the final analysis
There are two things. If you want to be a financial planner, go for CFP. But if you want unparalleled knowledge, do your CPA and get qualified as PFS without any extra effort. The advantage of doing PFS is an opportunity to pursue continuous education. Of course, it’s your call. You need to decide what works for you and what doesn’t. But we think after reading this thorough article, you would be able to decide which path to take with confidence. Isn’t it.