Difference Between CFA® and CFP
The key difference between CFA and CFP is the skills and career outlook. CFA focusses on enhancing investment management skills, including investment analysis, portfolio strategy, asset allocation, and corporate finance. In comparison, CFP enables you to learn all about wealth management and financial planning. CFA is one of the hardest financial credentials you can get in the world. It has three levels to get through before you are considered as CFA whereas, CFP is significantly easier if you talk about levels. It has only one level to clear.
There are many finance certifications available these days. These certifications help students get through the hurdles of knowing specifically one particular topic. However, most students do get confused about what to pick and what to let go of as on the surface, everything looks pretty similar.
In this article, we will simply outline CFP and CFA® so that after going through these, you have an idea about what to pick and what not to. This article is especially for students who evaluate CFA® and CFP and don’t have much idea about what to choose from the two.
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The article will flow in this order:
- What is Chartered Financial Analyst (CFA® )?
- What is a Certified Financial Planner (CFP)?
- Why pursue CFA®?
- Why pursue CFP?
Without much ado, let’s get started.
What is the Chartered Financial Analyst® (CFA®) charter?
The CFA® program focuses on investment management. The top employers of shareholders include the most respected financial corporations globally, e.g., JPMorgan, Citigroup, Bank of America, Credit Suisse, Deutsche Bank, HSBC, UBS, and Wells Fargo, to name a few.
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Many of these are investment banking firms, but the CFA® Program focuses on the knowledge and skills most relevant to the global investment management profession from the standpoint of a practitioner.
Investment professionals who hold the CFA® designation (or CFA® charter) meet rigorous educational, work experience, and ethical conduct requirements.
Only those who complete three graduate-level examinations, four years of work experience, and annual membership renewal (including ethics and code of professional conduct attestation) are permitted to use the CFA® designation. Complementary codes and standards (such as the Global Investment Performance Standards and Asset Manager Code) help enhance this professional distinction. Do check out the CFA Exam dates and schedules for further information.
What is a Certified Financial Planner (CFP)?
Once you become a CFP, you will be a trusted advisor for people who need help in financial planning. You will not only be able to help them in their finances, but you will also help them save taxes and create personal savings.
- It’s a great career option as people are looking for experts who have authority in budgeting, retirement planning, insurance coverage planning, and taxation. Financial corporations are looking for experts like CFP everywhere, but very few certifications can offer benefits that only CFP can.
- There are many financial planners in the market, but very few can trust them on the grounds of ethical responsibility. But CFPs are different as the CFP board takes particular care to train the students with rigorous and strict ethical standards.
CFA vs CFP Infographics
|Certification Organised by||CFA is organized by CFA Institute. CFA Institutes has offices in US, Europe and Asia-Pacific region and has more than 500 employees all over the world.||CFP is being organized by CFP Board. CFP Board is a non-profit organization and serving its students since 1985.|
|Number of levels||CFA is one of the hardest financial credentials you can get in the world. It has 3 levels to get through before you will be considered as CFA.||CFP is significantly easier if you talk about levels. It has only one level to clear.|
|Mode/Duration of exam||As CFA has three levels to complete the duration of the exam is significantly shorter. Every exam is of 6 hours duration.||CFP format during an 8-day testing window, one day during two 3-hour testing sessions, separated by a scheduled 40-minute break.
The appointment includes time for check-in, securing personal belongings in provided lockers, verification of ID, fingerprint capture and security procedures.
|Exam Window||CFA Part I, II & III level exams are conducted on the first Saturday of June every year, Part I exam can also be taken in December||EXAM WINDOW:- Mar.14–21,2017, Registration Open:- Nov.22,2016, Education Verification Deadline:- Feb.14,2017, Registration Deadline:- Feb.28,2017.
EXAM WINDOW:- July 11-18,2017, Registration Open:- Mar.23,2017, Education Verification Deadline:- June 13,2017, Registration Deadline:- June 27,2017.
EXAM WINDOW:- Nov.7-14,2017, Registration Open:- July 20,2017, Education Verification Deadline:- Oct.11,2017, Registration Deadline:- Oct.24,2017
|Subjects||The subjects for CFAs are as follows. Remember, the focus of these subjects in each level is different.|
-Ethical and Professional Standards
-Financial Reporting and Analysis
|Let’s look at the subjects of CFP
-Risk Analysis & Insurance Planning
-Retirement planning & Employee benefits
-Tax Planning & Estate Planning
-Advance Financial Planning
|Pass Percentage||In 2015, the first percentage for CFA level-1, level-2 and level-3 are 42.5%, 46% and 58% respectively|
The 14-year average pass rate for all three levels of CFA (from 2003 to 2016) was 52%
|In 2015, the pass percentages for CFP students are as follows – 68.8% in March, 2015; 70.3% in July, 2015 and 64.9% in November, 2015.
In 2016, the overall pass rate was 64 percent, and the pass rate for first-time exam takers was approximately 69 percent.
|Fees||CFA fee is approximately $1350 including registration and examination.||Exam Only:- Early fees $750, Regular fees $850
Exam & Practice Exam:- Early fees $925, Regular fees $1025
|Job opportunities/Job titles||For CFA, there are many opportunities. According to a study conducted by CFA institute it’s being seen that after the completion of CFA, the top 5 job titles are Portfolio Manager (22%), Research Analyst (16%), Chief Executive (7%), Consultant (6%) and Corporate Financial Analyst (5%).||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.|
Why Pursue the CFA® Designation?
The differentiating benefits of earning the CFA® designation include:
- Real-world expertise
- Career recognition
- Ethical grounding
- Global community
- Employer demand
The sheer demand for the CFA® charter speaks to the difference it makes.
For more information, refer to- CFA® Program.
- You can also read the Complete Beginners Guide to CFA Exam for detailed understanding.
Why Pursue CFP?
Pursuing CFP has many benefits –
- Suppose you don’t need to incur any costs for being a CFP professional. It’s within the range of US $400 and will be valid for 1 year.
- CFP allows you to help a lot of people, along with getting a career that will only increase in potential over time. Thus, organizations are only looking for CFPs when they want to recruit someone as a financial planner or financial advisor.
- CFP takes care of your education, examination, training, and ethical standards. Even if you are a novice, you can learn everything only from this one course.
CFA vs. CFP, whatever your end choice may be, let it be an informed one. This decision is for your career and hence keep in mind all these pros and cons. I hope I could help in whatever little I could. All the very best :-)
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This has been a guide to CFA vs. CFP. Here we discuss the top difference between CFA and CFP careers, examination pattern, pass rates, fees, and job opportunities. If you wish to evaluate other financial certifications, you can also checkout –