Difference Between CIMA and CFP
CIMA stands for Chartered Institute of Management Accountants and this course emphasizes more on business ethics, asset allocation, investment policy, performance assessment, and risk analysis whereas CFP stands for Certified Financial Planner and this course focuses on offering strategic advice on various topics that falls under the purview of taxes and investment.
Choosing between CIMA (Certified Investment Management Analyst) and CFP (Certified Financial Planner) is a tough choice because both the options are equally good in their own right. They can help give your career the desired boost. However, the course must fit into your career ambition. So to help you choose the right course for your bright career aspirations, we analyze the courses in detail, highlighting the scope of both the courses. Below is the structure of what we are going to understand in this post.
CIMA vs. CFP Infographics
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Let’s understand the difference between these two streams with the help of this CIMA vs. CFP Infographics.
What is the CIMA (Certified Investment Management Analyst)?
CIMA is known to be the most prestigious course when global business is taken into context. This course is offered by The Investment Management Consultants Association (IMCA). Being CIMA certified gives you the knowledge to undertake critical strategic decisions in any business. Those who want to reach up to the level of advanced investment consultants pursue CIMA. Their major role is to provide sound guidance to international investors. CIMA certification ensures that you have undergone 3 years of extensive practice as an Investment Consultant. The administering committee IMCA also keeps a close eye on the record of ethical conduct of the candidates appearing for CIMA. Continuing education of 40 hours is required to be obtained every two years so as to maintain the certificate.
What is a Certified Financial Planner (CFP)?
The certification exam of Certified Financial Planner (CFP) is organized by the Certified Financial Planner Board of Students, Inc. This certification involves all-around studies of financial planning and tends to cover a range of topics like stocks, bonds, taxes, insurance, retirement planning, and estate planning. Certified Financial Planners work closely with individuals to help them in assessing their financial decisions to achieve maximum profits. Educational qualifications required for CFP are a bachelor’s degree from an accredited college or university and three years’ experience as a full-time financial planner or equivalent part-time experience. This certification requires continuing education of thirty hours every two years.
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CIMA vs. CFP
In order to draw a comparison between both the courses we must, first understand the scope of both the courses. While CIMA focuses more on asset allocation, business ethics, risk analysis, investment policy, and performance assessment CFP course revolves around providing strategic advice on the topics that fall under the category of tax and investments. Pursuing a CFP certification also opens the option of leading a career in various sectors, including banking, wealth management, advisory services, stockbroking, etc. Thus it can be said that for a more holistic approach towards a career in business, CFP is the course that will help you achieve it.
Why pursue CIMA?
CIMA is an important certificate considering today’s client demands sophisticated solutions for their business prospects to maximize their profits. CIMA certification is organized by IMCA, which is all about business ethics; hence CIMA ensures that you have undergone a rigorous ethical code of conduct, and if found guilty, then you will be handled by a professional review committee of peers. CIMA certification enhances your professional stature and opens up the opportunity to work with imminent clients and depicts that you are committed to increasing your knowledge by studying further.
Why pursue CFP?
There is an adverse need for quality financial planners in today’s world. Being a CFP, it broadens your thinking skills and helps you in achieving the financial goals of your clients in a better way. Becoming a CFP can make your financial planning career to grow exponentially. According to a survey, CFP Professionals 26 percent more in compensation than other financial advisors. CFP certification creates a positive impact on clients and strengthens their trust, and they are relying more on your technical abilities. Along with increased financial prospects, one also experiences satisfaction in their career.
To obtain a CIMA certificate, one has to clear the qualification examination and certification examination, which are conducted online and are proctored. Qualification exams can be taken at any qualified testing center, and you have to clear this exam in one go; otherwise, you’ll have to wait for another 30 days to pay the retake fee. After clearing the qualification examination, you have to register for a registered education component, and then you are eligible to appear for the certification examination. A certificate examination for CIMA is a four-hour exam that is hosted by AMP testing centers. Subjects that are covered under this certification are Fundamentals of management accounting, fundamentals of financial accounting, fundamentals of business mathematics, fundamentals of business economics and fundamentals of ethics, corporate governance, and business law.
For CFP certification, you have to complete a CFP Board registered program. The CFP certification exam is administered in computer-based testing (CBT) during a 5-day testing window each year, with one testing window available each March, July, and November. The exam comprises of 170 multiple choice questions, including scenario-based questions along with standalone questions. The exam comprises of two three hour sessions separated by a scheduled 40 minutes break. Major domains that are covered under CFP examination are establishing and defining the client-partner relationship, gathering information necessary for fulfilling engagement, analyzing and evaluating the client’s current financial status, developing the recommendations, communicating the recommendations., implementing the recommendations, monitoring the recommendations, and practicing within professional and regulatory standards.
Both courses have individual benefits and scope in the business industry and can be pursued for prospering career options. If you don’t want to limit yourself to a few finance-related sectors, then you should go for CFP, and if you want to specialize in sectors such as investment policy and asset allocation, then you should pursue the CIMA certification.
This has been a guide to CIMA vs. CFP. Here we discuss the differences between CIMA and CFP along with infographics and a comparative table. You may also have a look at the following articles –