CFA® Charter and CFP® Certification
Where Do the Paths Differ?

Although both the Chartered Financial Analyst® (CFA) and the Certified Financial Planner® (CFP) are popular financial credentials, they have distinct skills and roles. Their primary distinctions are their areas of expertise and the clients they serve. CFA charterholders can work in a variety of financial roles, such as investment analysis, portfolio management, and wealth management. CFPs, on the other hand, frequently work in the financial services industry as financial planners, advisors, consultants, and wealth managers, focusing on assisting individual clients in developing financial plans, managing investments, and providing tax, retirement, and estate planning advice.

To make informed career decisions, it is crucial to have a clear understanding of the unique day-to-day activities and responsibilities of both CFP and CFA charterholder. This article provides valuable insights that can help you discern the differences between the two.

CFA Charterholder vs CFP Certification

To begin with, both credentials require different qualifications, training, and skill sets. The CFA designation is often considered more rigorous and specialized, requiring candidates to complete a series of three comprehensive exams focused on investment analysis, portfolio management, and financial markets. In contrast, the CFP designation requires candidates to complete a single comprehensive exam covering a broader range of financial planning topics, such as retirement planning, tax planning, and estate planning.

An infographic listing out the differences between the CFA charter and the CFP certification

Due to these differences, CFA charterholders typically work with institutional investors, such as hedge funds, investment banks, and asset management firms, while CFPs often work with individual clients, helping them achieve their financial goals through personalized planning and advice. In terms of day-to-day activities, a CFA charterholder might spend their time analyzing investment opportunities, conducting research on financial markets, and managing investment portfolios. A CFP, on the other hand, might spend their time meeting with clients, creating financial plans tailored to their needs and goals, and providing ongoing support and advice to help them achieve their objectives.

Just embarking on your CFA charter journey? Find out exactly what you need to do to get started.
By immersing yourself in the fundamentals of the field from the start, you'll be better equipped to navigate the complexities of the CFA curriculum.
A potential CFA candidate is finding out what it takes to get started on the Level 1 exam.

Charter and Licensure

To obtain the CFA charter, individuals must pass all three levels of the CFA charter exam, meet the required work experience, and adhere to the CFA Institute's code of ethics and professional standards. This charter is granted solely by the CFA Institute. On the other hand, the CFP designation is a licensed credential granted by the Certified Financial Planner Board of Standards (CFP Board). Candidates seeking the CFP designation must meet specific education, examination, experience, and ethical requirements. This includes passing the CFP exam, holding a bachelor's degree, completing a CFP Board-registered education program, and having at least three years of relevant work experience.

Eligibility Requirements

To be eligible to sit for the CFA Level 1 exam, you must meet certain requirements. These include holding a bachelor's degree, having at least two years remaining in your undergraduate studies, or having an equivalent level of experience or higher-education. Lastly, everyone who plans to enroll in the CFA charter program and register for the exams for the first time must have an international travel passport. To become a CFA charterholder, a candidate must pass all 3 exams, fulfill the work requirements, submit letters of reference, and apply for membership. The CFP certification also demands extensive professional experience. This requires either 4,000 hours of CFP-compliant apprenticeship or 6,000 hours of professional financial planning experience. Prior to taking the CFP test, candidates must have completed the requisite hours of experience between five and ten years.

Exam Difficulty

The CFA charter exam is divided into three levels of difficulty: Level 1, Level 2, and Level 3. These exams are far more challenging than other high-stake professional exams, with an average pass rate of 46% as of November 2022. CFA charter exam topics are broadly categorized as financial concepts, portfolio management, financial analysis, and accounting.

CFA Exam Year Level 1 Level 2 Level 3
2013 41% 43% 49%
2014 43% 46% 54%
2015 43% 46% 53%
2016 43% 46% 54%
2017 43% 47% 54%
2018 44% 45% 56%
2019 42% 44% 56%
2020 49% 55% 56%
2021 31% 41% 42%
2022 37% 44% 49%
Average 41.10% 45.70% 52.30%

Comparatively, the CFP is easier to obtain than the CFA charter. The historical pass rate has been above 60% and looking as recent as 2022, it is around 46%.

Salary and Career Paths

The CFA Institute states that charterholders typically earn more than their peers in the financial industry. Those with a bachelor's degree can expect a median total income of $162,500, while those with a graduate degree can earn up to $237,357, giving them a competitive advantage in the job market.

In contrast, an entry-level CFP can expect to earn a median total compensation of $50,892 with less than a year of experience. With 5-19 years of experience, this can increase to an average of $71,864 to $86,360. For those with extensive experience in the field, typically 20 years or more, the median compensation is $102,297.

Given that the variation in CFA charterholder and CFP's salaries falls under a vast financial spectrum, a typical range of averages might not fully offer the whole picture. Here's a table mentioning the individual CFP vs. CFA charterholder salaries for some top-tier roles:

CFA Charterholder Career Path
Top 5 Roles Average Salary
Buy-side research $83,660
Consulting $87,660
Investment banking $115,000
Risk management $96,630
Corporate executive $197,840
CFP Certification Career Path
Top 5 Roles Average Salary
Lead adviser $163,000
Personal financial planner $127,000
Client services adviser $97,000
Associate adviser $68,000
Wealth management adviser $125,000

Pros and Cons

Both the Chartered Financial Analyst (CFA) and the Certified Financial Planner (CFP) designations are highly respected credentials in the financial industry, indicating a high level of expertise and professionalism. While both designations can provide significant benefits, there are also some drawbacks to consider. It's important to weigh the pros and cons carefully before deciding which certification to pursue.

Ultimately, the decision between the CFA® Charter and the CFP Certification will depend on your career goals, interests, and strengths. If you're interested in working in investment management or asset analysis, the CFA® Charter may be a better fit. If you're passionate about providing comprehensive financial planning services to clients, the CFP Certification may be the way to go.

Unlock Your Optimal Learning Style in Just 3 Minutes: Boost Retention, Enhance Focus, and Accelerate Success
Collage of images representing learning sources

Frequently Asked Questions

The cost of obtaining a CFA certification can vary depending on study materials and exam fees, but it can typically range from $3,000 to $5,000 or more. The cost of obtaining a CFP certification can also vary, but it generally ranges from $4,000 to $6,000 or more.
The CFA charter exam is considered harder than the CFP exam due to its rigorous curriculum and three-level exam series with low pass rates. According to CFAI’s historical data, covering 10 years, the average pass rate was just 44%. It covers topics such as ethics, investment tools, financial analysis, and portfolio management. The CFP exam on the other hand has had a pass rate ranging from 62 to 66%, and focuses on practical knowledge of financial planning and covers topics such as retirement planning, tax planning, and estate planning, tested in just one single exam.
Yes, it is possible to hold both a CFA charter and a CFP certification. However, the two designations are focused on different areas of expertise, so it is more common for individuals to pursue one or the other, depending on their career goals and interests.

Read more about CFA

Understanding CFA charterholder and CPA certification is important when choosing a career. Here’s all you need to know about the distinction between them.
Are you thinking about taking the CFA charter Exam? Learn all you need to know about the three Levels, including exam details, structure, registration, and scoring!
Are you considering the CFA program? Our data will show you the latest careers and job opportunities for CFA candidates and charterholders.
Want to compare CFA charterholder salaries throughout the globe and across other finance-related roles? Here is a list of different factors that determine your salary and compensation.
Scroll to Top