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Infographic: CFP vs CFA

By Fred Banbury 30 May, 2023 3 mins read

When choosing between a CFP and a CFA, it's helpful to think of the differences between the two designations and how they can help you succeed in the job market. The designations they confer are based on the degree they grant and their goals. There is a major difference between the two designations in that they differ in their ability to perform mathematics. CFPs are generalists. CFAs concentrate on a specific industry or investment category. This exam and the jobs will require more specialized knowledge and skills.

CFP

There are differences between the CFP or the CFA. A CFP must have at least a bachelor's degree in finance. Some colleges and universities offer courses on financial planning. If they complete the CFP requirements, they can earn more by getting a Master's level in finance. It will also improve their chances of getting a job. You can read more about the differences in the credentials by reading the following.

To differentiate between these two professions, IMCA (Investment Management Consultants Association), defines the terms “financial Planning” and “wealth Management". The list of topics covered by CFPs is based on job task analysis. This association considers the primary distinction between financial planning and wealth management to be based on net worth and other relevant issues. While both are useful, there are some important differences.

CFA

There are some key differences between CFP and CFA certifications. CFP exams require a lower score. CFA exams require three levels of difficulty. While both exams require intense study, the CFA takes more time. Each of the three sections takes six hours each to pass. Two CFA exams are offered each year, one in June and one in August. Each month has a six- to ten day window.

Both certifications require that you have some experience in investment decision making and general finance knowledge. While the CFP exam tends to be more rigorous than CFA, they are both valuable for different types and job roles. You should choose a CFA over a CFP if your goal is to work in corporate finance. Both are rewarding but you should match your interests to your goals.

CPA

Without looking at the credentials each credential carries, it will be difficult to compare the education requirements for CPA and CFP. Both certifications are accepted widely, but there are differences. CPAs need to have a bachelor's degree of at least four years and additional accounting coursework. CFP is a multiple-choice exam. Candidates should have an extensive understanding of financial planning practices in order to sit for the exam.

CFP is a shorter exam than the CPA, which requires a more thorough exam. The applicants must have a degree either in financial planning, or actuarial sciences. The CFP exam lasts 10 hours while the PFS takes only five hours. Each exam contains 160 questions. The number of questions on each exam is the same, but the CFP is easier to pass. CFPs are generally better for most people.

MBA

CFP and MBA are great options if your goal is to make more money in financial planning. Although both degrees offer similar training, they each have their own areas of expertise. Don't be afraid to ask questions about which degree you should choose. This infographic can help you choose between them. Both degrees give you an advantage in today’s job markets, but the CFP could be more lucrative.

MBA students have an advantage even though both programs require a high level of expertise. They will be able to gain a deeper understanding of the corporate environment, which is critical in today's business world. The MBA program is more challenging, as it requires more hours of classroom work to complete. MBA students have to follow strict attendance rules. The program also includes case studies and group project. Despite the demands of the job, there's still plenty of time for socializing and other leisure activities. MBA graduates earn similar salaries as CFAs and can expect to make an average of Rs 6,50,000, or even more.

FAQ

Where to start your search for a wealth management service

The following criteria should be considered when looking for a wealth manager service.

A proven track record
Locally located
Offers free initial consultations
Provides ongoing support
Has a clear fee structure
Reputation is excellent
It is simple to contact
Offers 24/7 customer care
Offers a wide range of products
Low fees
There are no hidden fees
Doesn't require large upfront deposits
Make sure you have a clear plan in place for your finances
Transparent approach to managing money
Allows you to easily ask questions
You have a deep understanding of your current situation
Understand your goals & objectives
Would you be open to working with me regularly?
Work within your budget
A good knowledge of the local market
Are you willing to give advice about how to improve your portfolio?
Is available to assist you in setting realistic expectations

What are the best strategies to build wealth?

It is essential to create an environment that allows you to succeed. It's not a good idea to be forced to find the money. You'll be spending your time looking for ways of making money and not creating wealth if you're not careful.

Additionally, it is important not to get into debt. Although it can be tempting to borrow cash, it is important to pay off what you owe promptly.

You are setting yourself up for failure if your income isn't enough to pay for your living expenses. Failure will mean that you won't have enough money to save for retirement.

Before you begin saving money, ensure that you have enough money to support your family.

What is retirement planning exactly?

Financial planning includes retirement planning. It helps you prepare for the future by creating a plan that allows you to live comfortably during retirement.

Retirement planning includes looking at various options such as saving money for retirement and investing in stocks or bonds. You can also use life insurance to help you plan and take advantage of tax-advantaged account.

Why it is important that you manage your wealth

To achieve financial freedom, the first step is to get control of your finances. Understanding how much you have and what it costs is key to financial freedom.

You should also know how much you're saving for retirement and what your emergency fund is.

If you do not follow this advice, you might end up spending all your savings for unplanned expenses such unexpected medical bills and car repair costs.

How to Beat the Inflation with Savings

Inflation is the rise in prices of goods and services due to increases in demand and decreases in supply. Since the Industrial Revolution, when people started saving money, inflation was a problem. The government regulates inflation by increasing interest rates, printing new currency (inflation). However, you can beat inflation without needing to save your money.

For example, you could invest in foreign countries where inflation isn’t as high. You can also invest in precious metals. Because their prices rise despite the dollar falling, gold and silver are examples of real investments. Investors who are concerned about inflation are also able to benefit from precious metals.

Statistics

These rates generally reside somewhere around 1% of AUM annually, though rates usually drop as you invest more with the firm. (yahoo.com)
As of 2020, it is estimated that the wealth management industry had an AUM of upwards of $112 trillion globally. (investopedia.com)
According to Indeed, the average salary for a wealth manager in the United States in 2022 was $79,395.6 (investopedia.com)
A recent survey of financial advisors finds the median advisory fee (up to $1 million AUM) is just around 1%.1 (investopedia.com)