CFA vs CPA

• Obtaining a CFA requires four years of relative work experience, while the CPA only requires one.
• The CFA exam is a total of three tests and takes candidates an average of four to five years to complete; while the CPA exam is four sessions and typically takes 18 months to complete.
• Most CPA career path opportunities have a heavy emphasis on accounting, while CFA career paths focus on finance.
• Both designations offer substantial career advancement opportunities.
• CFA testing is often more costly than a CPA; however, the study materials are often more cost efficient.

A Certified Public Accountant (CPA) focuses primarily on accounting duties, with financial duties coming second. Alternatively, as a Chartered Financial Analyst (CFA), the main focus is the financial role, working with individuals and businesses to reach their financial goals.

Given that both designations have elements found within the financial sector, there may still be a bit of confusion regarding the different responsibilities each role serves.

A CPA is an individual who has:

• Met the 150 hours of educational experience
• Had at least one year of accounting-related work experience
• Successfully completed all four tests included within the CPA exam
• Passed the applicable ethics exam
• Maintained their CPA licensure through the completion of CPEs and annual license renewal

To complete the CFA Program, individuals must meet the requirements set out by the CFA Institute. This includes having a bachelor’s degree or a minimum of 4,000 hours of work experience in the investment industry (or a combination of the two).

Additionally, individuals must also complete the three-test series of the CFA examination to earn the designation. Furthermore, after designation, CFA charterholders are expected to maintain strict codes of conduct with high standards of ethics and integrity.

A CFA charterholder’s responsibilities pick up where a CPA leaves off. This means, receiving and analyzing the reports produced by the CPA or perhaps another accountant. An example of this would be the public reporting produced by a CPA for a publicly-traded company. A CFA charterholder’s responsibility is to review the data within the reports to make financial recommendations to clients for investment purposes.

Additionally, CFA charterholders are qualified to act as personal financial planners and wealth management advisors. CFA charterholders can advise clients on which investments are optimal for their individual situations by analyzing short and long-term goals and their risk tolerance.

Oftentimes, CFA charterholders are also hired by hedge funds, mutual funds, or private equity firms to analyze a variety of company factors including their growth and profitability, amount of carriable debts, and creditworthiness.

CFA Career Paths

The career path of a CFA offers a variety of opportunities. All of which are within the financial sector, but each offers its own benefits.

Learn more about finance career paths.

As a CFA, a few of the career opportunities include:

• Day trader
• Investment analyst
• Portfolio manager
• Wealth planning and management
• Personal or corporate finance
• Financial Strategist
• Financial advisor
• Vice President of Finance
• Chief Information Officer (CIO)
• Chief Financial Officer (CFO)

A Certified Public Accountant is responsible for creating reports that accurately reflect the business operations of the companies and individuals they are employed by. In addition, they are involved in tax reporting and filing for those clients. As a part of the tax preparation process, CPAs assist with choosing the best course of action to minimize taxes and maximize profitability.

CPA Career Paths

The career path of a CPA also offers a plethora of opportunities in the fields of account and finance.

As a CPA, a few of the career opportunities include:

• Accounting role in the government
• Public
• Private
• Non-profit sectors
• Comptroller
• Financial manager
• CFO
• Academia opportunities such as an accounting professor

For more information on CPA careers, visit our helpful resource on Alternative Careers for Accountants.

The average salary for a CFA charterholder ranges anywhere from $51,000 to over $274,000, while CPAs may earn an annual salary ranging from $50,000 to upwards of $240,000.

Of course, there will always be exceptions, but it is important for individuals to understand the driving forces behind those significant salary ranges. For instance, the organization type and size will play significant factors, as well as the geographical location of the business itself.

The timeline of these two career paths also affects typical salary expectations. The CPA is more definitive, where you can expect to work in auditing for a few years, then supervise and manage, and then make a decision to stay with the firm (and go for partner) or head off into the industry (normally for an auditing client who was smitten with your work).

On the CFA side, you have different paths you can follow. You could start as a bank teller and then work as a relationship manager. Or you could go higher and manage an entire branch or spread out into different areas such as risk management or portfolio management where the salaries are higher.

CFA Salary: Let’s Take a Closer Look

According to Payscale, CFA charterholders in the United States can earn annual salaries anywhere from $51,000 to well over $200,000. They also estimate the average CFA salary to be $97,000 a year. The broad salary range is a direct reflection of a variety of factors. Beyond the organization type, size, and location, other factors include the desired career path, as well as years of experience.

Below are the average salaries, provided by Payscale, of some of the most common positions for CFA charterholders:

• Financial Analyst – $ 66,464
• Quantitative Analyst $99,520
• Senior Portfolio Manager – $176,384
• Vice President of Finance – $ 144,596

CPA Salary: Let’s Take a Closer Look

Payscale reports the average salary for CPAs located in the United States is $89,000. However, the annual salary may range anywhere from $50,000 to over $240,000. Similar to the CFA charterholders, CPAs will see a wide range in salaries based on the organization type, location, size, the CPA’s years of experience, and desired career path.

Below are the average salaries for some of the most common positions for CPAs, provided by Payscale:

• Accounting Manager: $92,183
• Senior Tax Accountant: $85,729
• Finance Director: $124,283
• Vice President of Finance: $150,526

Read more about CPA salaries, perks offered, and top industries for CPAs in our CPA Salary and Career Guide.

Each designation is difficult in its own way. The CPA has a harder entry barrier, given the work experience sign off requirements and the confirmation of 150 accredited hours. Additionally, there is a timeline set for successful CPA completion. This may create undue stress for an applicant, increasing the level of difficulty.

From a job role perspective, CPAs focus primarily on accounting duties, with finance being secondary. If the individual’s strengths lie within the financial analysis side of things, it may make a CPA career path more difficult.

The CFA exam entry barrier is lower, although far more work experience is required to earn a CFA charter. Additionally, the pass rates for the CFA exam are significantly lower than that of the CPA. However, again, if the individual’s personal strengths are on the financial side of business, a CFA is a better fit than an accounting career path they would find possessing a CPA.

Both the CFA and CPA require a significant amount of commitment. Applicants must be willing to spend several hours reviewing course materials to study and invest in practice testing to properly prepare for the exams. In addition to the study preparations, applicants are also required to meet experience requirements in order to achieve the CPA and CFA designations.

From a pass rate perspective, the CFA success rates have been dropping for each level of the exam since 2020. As of November 2021, the pass rate for the Level I CFA exam was 27%, Level II was 46%, and Level III was 43%. While pass rates for CPA certification range from 53% to 68%, depending on the test.

It is important to recognize the level of success the applicant has directly correlates to having the proper study materials and the time spent preparing.

The CFA exam format varies greatly from the CPA exam. First, there are three levels of the exam that must be completed in consecutive order.

The three levels of the exam are:

• Level I CFA Exam
• Level II CFA Exam
• Level III CFA Exam

The emphasis of these tests is on alternative investments, derivatives, equity investments, fixed-income, portfolio management (Level III exam), and other financial information instead of regulations and auditing. There is some accounting overlap between the two exams.

Learn more about the CFA topic weights.

The testing window for the CFA is also far shorter for each level. Level I is offered four times a year, and Level II and Level III have two exam dates per year. Therefore, the time it takes for the average applicant to pass the CFA exam is typically four years.

CFA: How Long Does It Take to Become Qualified?

Beyond the exam time, individuals must have four years of relevant work experience and a bachelor’s degree to qualify for the CFA Program. It should be noted, the individual signing off on the years of work experience does not have to be a CFA themselves.

Learn more about how to become a CFA.

CPA Exam Content and Format

The Uniform CPA Examination consists of four different tests:

• Financial Accounting and Reporting
• Audit and Attestation
• Business Environment and Concepts
• Regulation

Applicants must complete the testing at a Prometric Center and once the first CPA test is passed, applicants have 18 months to pass the final three.

There are three varieties of questions found on the exam: multiple choice, task-based simulations, and written communication.

Learn more about all four CPA exam sections.

CPA: How Long Does It Take to Become Qualified?

Prior to sitting for the CPA exam, candidates must have 150 credit hours and one year of accounting experience. Additionally, they must have one year of work-related experience, which must be signed off on by a licensed CPA. After passing the exam, some state boards may require an ethics exam before CPA certification is awarded.

Learn more about how to become a CPA.

Ultimately, it is entirely up to the individual’s career goals and professional strengths. If a career primarily focused on finance falls into their strengths, desires, and career growth, a CFA designation would be the better choice.

Alternatively, if they want to explore career advancement opportunities that revolve around accounting duties, they should be looking at a CPA certification.

An individual can also consider their preferences when it comes to structure, risk-taking, and tolerance for different types of stress. The CPA would be a good fit for someone who likes structure, and the CFA charter would be a good fit for someone who likes the unknown.

CFA charterholders may be involved in forecasting future cash flows (for an individual or a firm) and that takes guts and creativity, so it’s not for the faint of heart.

When it comes to stress, accounting can be stressful because those professionals work overtime periodically (monthly, quarterly, annually), whereas finance professionals face stress due to the desire to forecast accurately—if they’re right, they get rewarded (with a bigger bonus) and vice versa.

That being said, there will always be pros and cons to each.

What Are the Pros of Becoming a CFA?

• On average the salary is higher than a CPA
• On average there are more career paths than a CPA
• There are fewer tests to pass for the CFA than the CPA (though that doesn’t mean it’s easier)
• There is a lower entry barrier for a CFA charterholder than a CPA
• The CFA is a global designation with no requirement to take a local “reciprocity” exam (as is the case with the CPA)
• Fewer professionals earn a CFA than a CPA, making the credential more coveted
• The review course materials are more cost efficient for the CFA than the CPA

What Are the Cons of Becoming a CFA?

• There are more years of experience needed before sitting for the exam (4,000–6,000 hours of work experience)
• The course is slightly more expensive
• There is a substantial time commitment required to properly prepare for the CFA exams
• It takes longer to finish the exams (most candidates take four years to complete the exams)

What Are the Pros of Becoming a CPA?

• There are opportunities for career advancement after earning a CPA
• With more career paths by earning a CPA, one experiences higher job security
• Earning a CPA is often quicker to complete than a CFA
• CPA pass rates are higher than the CFA

What Are the Cons of Becoming a CPA?

• • The testing and review course materials are expensive
  • It requires a significant time commitment to prepare for the exams
  • The CPA has stricter experience and educational requirements than the CFA