Careers as a CA/CPA, CFA, or CFP

What are the similarities and differences between professional financial accountants, Chartered Financial Analysts (CFA), and Certified Financial Planners (CFP)?

Being all three, this is a question I get asked a lot.

And right now as students begin to contemplate their career options, it is a topical issue.

So how do they compare? 

Investopedia offers a nice summary comparing the three designations from a U.S. perspective.

The CFA designation is global, so the Investopedia comments are appropriate for any reader. However, professional accounting and the CFP designations vary somewhat between jurisdictions. So there may be differences between what Investopedia tells you and reality in your home market.

I have written about these three career paths previously in some detail.

Professional Financial Accountant – CA/CPA

A professional financial accounting designation can be a good career choice. There are usually entry level jobs available for those starting out. Pay for new hires has improved over the years and you no longer need to live on popcorn and Kraft dinner to survive as an articling student.

While there are opportunities for long-term careers in public accounting, most professional accountants move to industry. As long as there are accounting regulations and corporate taxes, there will be room for accounting staff.

As well, becoming a financial accountant provides strong skills in analyzing investments and businesses. These are valuable tools should you ultimately desire a career in finance. This was the main driver in my going down the Canadian Chartered Accountant route.

To some extent, professional accounting designations are portable. General accounting principles apply in most countries and there is an increasing harmonization of more detailed accounting standards throughout the globe. This provides an opportunity for international mobility should you desire it. The notable exception relates to tax, an area that still is quite country specific.

Some countries allow professional accounting students to obtain their designations by working in industry rather than the traditional public accounting route. I suggest any aspiring accountants try to article in a public accounting firm. I believe you will learn more by auditing a variety of clients and performing both corporate and personal tax work.

Chartered Financial Analyst – CFA

I have previously compared the CFA and CFP designations.

Investopedia provides a nice Introduction to the CFA Designation as well.

Although the financial services job sector is tight at the moment, there still are some job opportunities for CFAs. I think the key for success is to be able to combine relevant practical experience with the designation. There are many individuals who possess the CFA letters but lack the financial or industry-specific experience to warrant a job offer.

I question the salary example proffered by Investopedia.

CFA Institute’s 2007 Member Compensation Survey reports that the median compensation for an equity portfolio manager with less than five years of experience is $495,000. With over 10 years experience, the median yearly salary went up to $555,000.

Yes, the data is correct. But there are not that many equity portfolio managers out there. If you factor in all CFA jobs, I expect that the mean salary for CFAs is much lower.

Certified Financial Planner – CFP

I have already discussed CFP careers for in Canada.

I disagree with Investopedia’s assertion that a CFP “is the only designation of the three focused on investing.”

In my opinion, the much stronger training for investing comes from the CFA program. And depending on one’s specific career path (e.g., equity portfolio manager), a CFA may do nothing but analyze and trade investments.

A CFP tends to be more involved in working with clients to develop comprehensive financial plans, address retirement needs, and so on. Creating an investment plan that meets the client’s needs is one component of the process. Other equally important aspects may include tax considerations, insurance needs, cash flow planning, estate planning, business succession planning, philanthropic opportunities, etc.

A CFP may need to be skilled in a variety of areas, not simply investing. Of course, one can focus on specific areas or work in a practice where multiple employees handle the differing client needs.

All are good career paths and I think that there will be an adequate supply of well-paying positions available over the coming years.

Good luck should you choose one of these routes.

2 Responses to “Careers as a CA/CPA, CFA, or CFP”

  1. Bjorn says:

    Hi there, I need your advice: I’m a recent MBA & Msc. International Business graduate, and have just started my career in the financial services industry. I work for one of the Big 5 Canadian banks as a financial advisor, have 4 years experience managing a portfolio of higher income clients in a different industry, am fluent in Brazilian Portuguese and communicable in Spanish as well. I’m interested in pursuing a career in wealth management, and am currently weighing the pros and cons of the CFA vs. the CFP – I read and loved your recent post.

    Do you think there is an obvious career path(s), based on my skills and qualifications, that I am overlooking? With your experience and expertise, in what area do you think I am the most marketable? I need advice!!

    Thank you!

  2. Jordan Wilson says:

    Hi.

    I think your career path should best relate to your personal interests. Within the CFP designation, there are a variety of areas one can focus – investing, insurance, estate planning, cash management, etc. If you have an interest or aptitude in one area, maybe you want to focus there and increase your skills and experience.

    Also, your personality factors in. Maybe you like to sell things. Then making commissions on investment product sales might make sense. Or maybe you prefer not to deal with clients. Then, investment analysis for a mutual fund might be the way to go.

    As wealth management and financial planning is heavily tax driven, strengthening your tax knowledge is always a good idea.

    And if you want to deal with South American clients, you could look at working for financial institutions with strong presence in South America. Maybe work directly down there or at least put yourself in a position for a transfer down the road.

    Again, if you want to focus on say Brazilian clients, then improving your knowledge of Brazilian tax issues, country specific investments, and general economics of the region is an asset.

    Hope that provides some food for thought.

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