Right from leading organizations like Amazon, and Alphabet to the common household, there is a constant need to manage finances. Organizations seek expert financial guidance for further expansion of the business or some internal endeavour, same is the case with households when it comes to scenarios like buying a new property or investments in education. But we often get confused about whether a CFA or a CFP will solve our purpose the best. Both CFA and CFP are trained financial advisors that guide people in possessing better financial stability. If both are financial advisors, do you know what makes one different from the other? Let us go through the blog and have a look at the prominent differences between CFP vs CFA.
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What is CFP?
Certified Financial Planners (CFP) are trained professionals who guide people regarding how they can manage their finances. CFPs, specifically work for clients and help them secure a better financial future. Their professional duty is to advise and assist the clients in achieving a set financial goal such as buying a property, saving for retirement, children’s higher education, etc. They also keep a track of the customer’s monetary status, building up a budgetary arrangement and executing it for the customer’s advantage.
What is CFA?
On the other hand, Chartered Financial Analyst (CFA) is a term given to the professionals who investigate the finances of large organizations or setups. Unlike the CFP, CFAs are associated with big companies or both buying and selling sides of a business set-up and internally analyze all the financial workings of the organizations. The CFAs overlook all the financial activities of the company, on the basis of which they also guide the firm in its upcoming endeavours. Along with this, CFAs also work for the wealth management of organizations.
As we are clear with the basic difference between CFP vs CFA, let us go through some important categories which will help us understand the difference in detail.
CFP vs CFA: What’s the Difference?
Although, both CFA and CFP are closely related, both courses possess various distinct elements. From course structure to career opportunities, both CFA and CFP possess a great number of variations. Tabulated below are the major differences between CFP vs CFA.
|Full Form||Certified Financial Planner||Certified Financial Analyst|
|Official Body||CFP Board||CFA Institute|
|Course Objective||CFP is designed around holistic financial planning||The CFA focuses on investment management|
|Eligibility||10+2 (preferably in the commerce stream)||Bachelor’s degree|
|Duration of Exam||10 Hours||18 Hours|
|Subjects Taught||Quantitative Methods, Economics, Financial Reporting and Analysis, Corporate Finance, etc||General Financial Planning, Education Planning, Risk Management and Insurance Planning, Retirement Savings and Income Planning.|
|Course Fee||Early Bird fee is $700 (INR 51,000)
On-Time Registration $1000 (INR 73,000)
Late Registration is $1450 (INR 1,60,000) along with first-time registration charges of $450 (32,000).
|$750- 850 (INR 55,000 – 64,000)|
|Job Profiles||Portfolio Manager, Investment Banker, Risk Analyst, Strategist, etc.||Financial Manager, Research Associate, Estate Planner, etc.|
|Employment Areas||Credentialed individuals may work for a bank or trading firm||CFA charter holders may engage in financial advising or run an advisory practice|
General Requirements for Becoming a CFA
- The CFA certification programme is managed by the CFA Institute. You must join the CFA Society and pay the annual membership dues in order to get certified.
- You need a bachelor’s degree (or an equivalent) and four years of professional job experience in an investment decision-making process to complete the CFA programme. Candidates must also pass exams at each of the three levels. Each level has a distinct focus and is made up of several components.
General Requirments for Becoming a CFP
- The CFP credential is regulated by the Certified Financial Planner Board of Standards. Similar to the CFA programme, candidates must fulfil certain educational and professional prerequisites. You require a bachelor’s degree plus financial planning coursework at the college level to become a certified financial planner (CFP). Candidates must have 6,000 hours of financial planning expertise (or 4,000 hours through an apprenticeship program).
- The last step is an exam that is conducted across two, three-hour sessions on a single day. The multiple-choice test gauges a candidate’s capacity to apply a wide understanding of financial planning to real-world scenarios.
CFP vs CFA: Which is Easier?
Now that you are aware of the basic similarities and differences between CFP vs CFA, it is now time to explore some more features regarding both courses. Each course has its own fundamentals, objectives, requisites as well as curriculum. Let us go through the below-mentioned points and decide which course is easier than the other:
Let’s first begin with CFP vs CFA difficulty. The CFA is considered to be a harder test than CFP. The reason why CFP is easier is that CFA has only one level you need to clear while CFP is constituted of 3 levels.
When it comes to CFP vs CFA salary, the CFP professionals in India can earn around 2 Lakhs to 9 Lakhs INR p.a. in India and their average salary is around 4,00,000 INR per year. The CFAs in India have a starting salary of 3 Lakhs to 20 Lakhs p.a. and their average salary is 6 Lakhs INR.
The next important point you need to consider is CFA vs CFP requirements. If you are a graduate with a commerce degree and want to pursue a finance certification then you must choose CFA from CFP vs CFA while CFP is ideal for high school graduates who are planning to pursue an undergraduate degree alongside a CFP certificate course.
CFA vs CFP In India
CFA is more popular as a finance certification course in India but recently CFP is also becoming a preferred program and has been recently authorized under the U.S.-based Financial Planning Standards Board Ltd. (FPSB Ltd.).
Can You do Both CFA and CFP?
Yes, anyone can pursue both CFA and CFP together given that they are a graduate preferably in the commerce stream.
To sum up this section, we would like to say that CFA is generally considered to be more difficult than CFP courses. But if with a strong determination and proper guidance, you easily crack even one of the most difficult courses in the world.
CFP vs CFA: Which One to Choose?
Choosing between CFP vs CFA is difficult since both are popular options for financial analyst credentials. Both the courses offer a great set of job profiles provided you are able to crack the tricky examinations of the desired course. For selecting the right course for you, we would suggest you get in touch with our experts at Leverage Edu and they will help you choose the right based on your choices, qualifications and future goals.
Hope this blog on CFP vs CFA was helpful in resolving your dilemma regarding which certification test is a better option for you. Looking forward to getting yourself admitted in any of the two courses abroad? Our experts at Leverage Edu can help you in choosing the best courses according to your requirement and interests in the top universities abroad. Sign up for a free session with our mentors today!