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How does a Certified Financial Planner (CFP) compare with a Chartered Financial Analyst (CFA)?

If I'm looking for someone to help me with planning for retirement and giving me investment advice what value does a CFP financial advisor provide me as compared with a CFA advisor and vice versa?

Besides these are there any other certifications that should be taken seriously that I may not be aware of?

Jun 10, 2015 by Darren in  |  Flag
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Frank Reilly Level 20

The CFP would be more equipped to address the retirement planning needs as it covers a broader focus in all financial planning areas. The CFA would be more equipped to provide individual investment advice/management. There is some overlap between the two, but those would be the general themes. I believe they are the two most valuable designations in the advisory profession.

Comment   |  Flag   |  Jun 15, 2015 from La Mesa, CA

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The CFA designation is almost entirely focused on investment and portfolio management, and it is composed of 3 levels with a 6 hour exam for each level. The CFP, on the other hand, is more broadly focused on the subject areas that a comprehensive financial plan tends to cover, which include planning for investments, tax, employee benefits, insurance, retirement and estate. The CFP has one exam, and typically one can complete the program in 12 to 18 months versus the 30 to 36 months for the CFA.

As someone who is both a CFA Charterholder and a CFP, I'd say if you're an individual who wants a financial plan, you'd likely be better served by a CFP professional given the broader focus of that designation. As for investments, both the CFA and CFP programs provide sufficient focus on investments to provide helpful advice to most individual investors.

Comment   |  Flag   |  Jun 11, 2015 from Atlanta, GA

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While I have not completed the CFA program, as a former analyst, I did complete part of the program. The curriculum is focused on investment analysis and portfolio management. If you are specifically looking for assistance with retirement planning, you would be better off with a CFP. The CFP designation indicates that the individual has completed a comprehensive program in financial planning, including retirement planning. As it relates to other designations, the ChFC is also a comprehensive financial planning program. The CRPC is a designation for someone who has completed a program focused only on retirement planning (it is a piece of the overall CFP or ChFC programs).

Comment   |  Flag   |  Jun 11, 2015

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The CFP certification is about comprehensive planning where the focus is on exploring the various dimensions of your financial needs through an integrated process (the big picture), whereas the CFA charter concentrates on security valuations, portfolio construction and financial analysis of investments.

While there is some overlap between the two, they're really two different tracks of finance with two different goals; someone who is a CFP practitioner would look to work with consumers, whereas a CFA charterholder is likely to work at an investment company such as a mutual fund complex or investment bank.

The CFP marks and CFA charter represent the pinnacle of their respective tracks.

Comment   |  Flag   |  Jun 15, 2015

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Essentially it's the difference between the person who serves you in a restaurant, and the person in the back cooking. CFP deals with client interaction, the client expierence simular to a waitor. CFA's are more concerned with the financial products, cooking the food.

1 Comment   |  Flag   |  Jun 15, 2015
Eric Simonds CFP®

Interesting analogy

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Flag |  Jul 08, 2015 near Brunswick, ME

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Why not find someone who has both credentials instead of one or the other? As others have stated, the CFP is probably the best fit based on your described needs. The CFP program covers insurance, income taxes, retirement planning, estate planning, and investments. To cover so many areas, it must obviously not get particularly deep in any one area. For example, a CPA is going to be more knowledgeable in taxes and an estate planning attorney is going to be more knowledgeable in estate planning. A CFA Charterholder is going to have much more education in investments than your average CFP practitioner.

I tend to think of the CFP practitioner as similar to a family doctor. They have to have a wide body of knowledge, but they may need the help of a specialist depending on the complexity of the client. This would be a CPA, estate planning attorney, or CFA Charterholder for complex investment needs. I think the CFP designation pairs well with the CPA or CFA, so you might be able to find someone who is a works in a generalist role with specialist level knowledge in certain areas.

Comment   |  Flag   |  Jun 25, 2015 from Austin, TX

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Great question. As a CFA Charterholder and CFP, I can tell you that the programs compliment each other well. I do think there is a misconception that CFA Charterholders only work as analysts or at mutual funds or that the program only teaches people how to pick stocks. There are several of us that work directly with clients. Further, the CFA curriculum specifically covers working with individuals and families in addition to pension funds, retirement plans, corporations etc.

My personal opinion of the two designations are: CFP - The perception of the CFP in the investing world is overrated (does not cover investment in as much depth as people think it does, its sufficient to help 99.9% of the public and their needs its just not as rigorous as I think the perception is). However, the holistic, broad, complete picture financial planning is dramatically underrated. The CFP programs provides excellent tools to provide tremendous value for a client through an integrated plan with investments and the rest of their financial picture. If an advisor is providing investment advice AND financial planning, I think the CFP can bring more to the table than a CFA Charterholder that only provides investment advice.

CFA Charter - No doubt it goes into a great deal on investments and I think most people understand that. I think many people think the program is just about how to value a stock, its much more broad than that. The behavioral finance, investment policy statement (the investment policy statements for individuals in the curriculum is some of the best out there), corporate finance and wealth management topics are very valuable and most people that have not been through the program don't realize how in depth the program goes into those topics. The curriculum used in the CFA program is the top research being put in the world of finance. Prior to starting the program, I thought it was only for that want to run a mutual fund but I find it very valuable and use things I have learned on a daily basis (in particular the behavior finance and investment policy statement portions).

Basically, both programs are excellent programs and if you are working with someone who has either or both designations you are in great shape!

1 Comment   |  Flag   |  Jul 07, 2015
Jason W. Self, CFA, CFP®

Great answer Stephen. I agree that the program compliment each other.

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Flag |  Jul 07, 2015 near Austin, TX

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As a CFP Professional, I might be a little biased, though it is not my intention.

A CFP Professional should be expected to deal with the broader financial plan, such as retirement along with insurance, investing, your personal spending/budgeting, determining the most tax efficient way to use your retirement assets, deal with issues regarding trusts, and on and on, pretty much any financial issue for which you would have questions as a client. If it is not an area in which they have knowledge, they can refer you to such a professional, perhaps an attorney that focuses on that area, or a CPA in which they have confidence.

A CFA's focus is more on the investments themselves, I think. I would invite a current CFA to expand on that if possible.

Comment   |  Flag   |  Jun 10, 2015 from El Paso, TX

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I agree with the previous explanations. CFP designation deals with planning your financial future. CFA designation deals with investment analysis. The CFA designation ignores for the most part the emotional decision making of most investors.

1 Comment   |  Flag   |  Jun 11, 2015 from Green Bay, WI
Jason W. Self, CFA, CFP®

Tony, the CFA program actually has a lot of good material on behavioral finance.

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Flag |  Jun 25, 2015 near Austin, TX

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Those before me have done a great job drawing the line between the two... the only thing that I think I can add to the discussion is that the CFP® Board does provide a clearer path for recourse if a client is dissatisfied. They are very responsive to the American investing public where as simply by the nature of the CFA designation, the compliance portion has a slightly different focus.

3 Comments   |  Flag   |  Jun 26, 2015 from Brunswick, ME
Stephen Reh MBA, CFA®, CFP®

While I agree that the CFP Board takes Ethics seriosly, I am not sure I agree with the assessment of the CFA designation not emphasizing ethics and responsibility with the public. Both programs have a public disciplinary process. http://www.cfainstitute.org/ethics/conduct/process/Pages/index.aspx You can submit a complaint right on the website. http://www.cfainstitute.org/ethics/conduct/sanctions/Pages/index.aspx Here is the "wall of shame" that is publised in the magazine and on the website. http://www.cfainstitute.org/ethics/conduct/sanctions/Pages/current_industry_related_sanctions.aspx

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Flag |  Jul 13, 2015
Jason W. Self, CFA, CFP®

Agreed. Ethics is a big part of the CFA program. It's usually at least 10% of the test at each level. We just have a lot of non-CFA people talking about a designation that they know little about. It would be like several non-CFP people responding to questions about the CFP program. It doesn't make much sense.

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Flag |  Jul 13, 2015 near Austin, TX
Eric Simonds CFP®

I apologize Gentlemen... I was simply stating which path I though was most straightforward on that single action (client complaints). It was in no way an indictment of the CFA program (which I highly respect) and its global prestige. I was trying to fill in the one area (in my personal opinion) that I did not see addressed to my satisfaction. I would like to politely withdraw the opinion expressed.

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Flag |  Jul 13, 2015 near Brunswick, ME

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