CFA vs CPA: Differences and Similarities
Many finance professionals seeking to advance their careers pursue certifications and licenses recognized in their field. Two of the most recognized in the field of accounting and finance are the Certified Public Accountant and the Chartered Financial Analyst.
The choice to pursue a CPA or a CFA will decide your career path. Both careers can be rewarding, but each has different advantages and disadvantages. In this guide, we look at the CFA vs CPA and compare both designations to help you choose the right one for your personality and skills.
CFA vs CPA - Similarities
Both designations are considered the highest standard of their respective fields.
- A CFA is a crowning achievement in finance and investments that prepares you for a career in investment banking portfolio management, corporate finance, or financial research.
- The CPA is considered the highest standard in the accounting field, and prepares you for a management or leadership career in accounting, auditing, tax, or management consulting. An accountant filing a report with the Securities and Exchange Commission is legally required to be a CPA.
- At the 1,000 largest U.S. public companies, the portion of chief financial officers who have their CPA's is approximately 36%, according to the Wall Street Journal.
- Approximately 7% of all CFA charter holders have made it to the C-suite, according to CFA Institute.
Both designations provide a definite increase in average salary.
- CPAs earn an average of 10% more than their non-certified counterparts.
- A CFA designation can increase your salary by 15-20. For more information on salaries, check out our guide to CFA salaries.
Method of obtaining certification
Both the CFA and CPA designations require passing examinations and meeting work or educational requirements. For the CFA designation, you need to complete the CFA program administered by the CFA Institute with a passing score. For the CPA designation, you’ll need to pass the exam from the AICPA.
Difficulty of Exams
When looking at the CFA vs CPA it is important to remember that both exams are considered some of the most demanding professional credentialing exams.
- The national CPA Exam pass rate averages around 50%.
- The average pass rate last year for Level I was 42%. Of all candidates that register for the Level I exam, only 20% ultimately complete all three levels.
If you are looking for help for either exam, check out one of the following resources:
CFA vs CPA - Differences
Barriers to entry
To obtain a license and certification as a CPA, you must have already completed a Bachelor’s Degree in accounting or finance. Each state has their own requirements as well. For more information, check out our resource on CPA requirements by state.
Job Functions - Accountants
Accountants that work in the private sector post accounting transactions, generate financial statements and reports for management, or complete tax returns.
Auditors and tax accountants work in public accounting.
Auditing: auditors test client’s financial statements for validity and accuracy and give a written audit opinion. They spend a lot of time at client’s headquarters, warehouse, or manufacturing facility performing audit work.
• Tax: tax accountants spend most their time in the office and are known to work the most significant amount of hours in the public accounting field.
• Management Consulting: consultants help companies solve a particular business problem and spend a great deal of time traveling.
If you like technical work but want to work with people, a career as a CPA may be your best bet.
JOB FUNCTIONS - CFA's
A CFA’s work can encompass many things, but it usually consists of one of the two following roles:
- Investment management: CFAs are often referred to as “money managers” because they manage portfolios of stocks, bonds, funds, and other investments. These professionals consider the investor’s goals and the prospects of the investments they manage. They choose the right portfolio for the client and closely monitor the investment performance of the securities.
- Research analysts: Research analysts assess the value of investments and businesses using financial and economic tools. They typically goes into a lot of detail on a small number of investments to evaluate their appropriateness for inclusion in investment portfolios.
CPAs have many career paths from which to choose. CPAs often can take their pick of accounting jobs, from independent management consulting to comprehensive auditing. Accounting jobs are not only found in private firms, but are in demand in quasi-governmental organizations and government offices.
The CFA designation can open doors to several career paths in the investment community. Positions range from corporate or research analysts to financial risk or portfolio managers. At the executive level, CFA’s are often considered for chief investment officer (COO), chief financial officer (CFO), or chief executive officer (CEO).
If you enjoy digging into detail and have great focus, a CFA career may be the way to go. Most CFAs spend their day working on their own.
The average salary for a CPA in the US is $71,550, but it varies depending on years of experience, the firm’s size, and the industry. Senior CPAs typically have 4-6 years of work experience and have a significant amount of experience in their area of expertise. As a Senior-Level CPA salary, you can expect to $66,000 to $110,000 depending on your job description and firm size.
|Position||Non-Certified Accountant Salary||Licensed CPA Salary|
|Entry-Level||$50,000 - $60,000||$52,000 - $68,000|
|Junior||$59,000 - $76,000||$62,000 - $87,000|
|Senior||$75,000 - $96,000||$79,000 - $110,000|
|Manager||$93,000 - $128,000||$110,000 - $133,000|
The median base salary for CFA charter holders is approximately $180,000. The median base pay for a financial analyst is $85,660.
There is a wide range for CFA® salary, depending on the specific job title.
Below is a breakdown of median total compensation by job type:
- Financial Analyst (corporate) $85,660
- Portfolio Manager (fixed income) $253,250
- Chief Investment Officer $316,600
- Portfolio Manager (equities) $344,500
When considering a CFA vs CPS, you will be excited to know that both designations provide great job prospects. Accountants and auditors’ employment will grow faster than average at a rate of 11% through 2024, according to Department of Labor and Statistics reports. Accounting and auditing regulations are getting stricter, and the economy will continue to expand around the globe.
Financial Analyst positions, which includes CFAs, are projected to grow by 6% through 2028, according to U.S. Bureau of Labor Statistics reports.
CPAs state licensing requirements vary but typically include:
- A Bachelor’s degree
- 150 hours of higher education
- At least one year of accounting experience
- Achieving a passing score on the CPA Examination
You can find your state specific CPA requirements here.
The Chartered Financial Analyst (CFA) Program is a professional certification offered by the CFA Institute. To become a CFA, candidates must have:
- A bachelor’s degree
- Four years of Qualified work experience
- Completed the CFA Program, which includes passing three six-hour exams in consecutive order.
- Membership in the CFA Institute
The CPA Exam consists of four sections. The test will require 16 hours to complete, with test-takers being allotted four hours per section. The four sections are:
- Auditing and Attestation (AUD)
- Financial Accounting and Reporting (FAR)
- Regulation (REG)
- Business Environment and Concepts (BEC)
You can find free CPA practice questions here.
The CFA Exam Level I has a total of 240 multiple-choice questions. The test is given in two separate 3-hour sessions. Test questions cover ten different sections. These are:
- Ethical and Professional Standards
- Quantitative Methods
- Financial Reporting and Analysis
- Corporate Finance
- Equity Investments
- Fixed Income
- Derivative Investments
- Alternative Investments
- Portfolio Management and Wealth Management
You can find free CFA practice tests here.
Cost to obtain certification
Registration fees, exam prep courses, and study materials, and other costs differ depending on the CPA review course or CFA review course provider you choose and the state in which you live. The actual Program fees are significantly different between the CPA and CFA.
- CPA application fees are paid to your state board and can range from $10 to $245; however, the average is $150. Exam fees are determined by the NASBA and are $208.40 for each of the four sections. Licensing fees are determined by the state board and vary between $50-$500. CPA Program fees total $1034 to $1,483.60
- CFA enrollment fees are charged by the CFA Institute and are $450. Exam fees vary depending on when you register for the exam. Early registration exam fee is $700. The Regular Application fee is $1,000. The late registration fee is $1,450. Total CFA program fees total $2,550 to $4,800.
Time to Complete Certification
- CPA certification takes less than a year to complete.
- According to the CFA Institute, completing the entire CFA program takes most candidates between two and five years.
- CPAs are required to complete varying levels of continuing professional education to keep their state licensure.
- While most CFAs take continuing education courses to stay current, there is no requirement to complete continuing education.
In the end, the choice between obtaining a CPA or a CFA depends on your personal preference in career paths.
Do you think you would enjoy work in public accounting, management accounting, auditing, or helping to prepare, evaluate, and confirm financial information? If so, the CPA designation should be your choice.
If you are more interested in portfolio management, financial analysis, being a consultant, or someday becoming CEO of a company, it would be a much better option to get your CFA designation.