Know The Difference: CFP vs CPA

June 14, 2023

At a glance

  • The main takeaway: CFPs and CPAs both play different roles, CPAs typically offer services related to accounting and taxes. CFPs help you achieve personal financial goals by providing budgeting and investment strategies and other services.
  • Impact: Combining the advice of a CFP and CPA can help you make more money and keep more of the money you make to build personal wealth more efficiently.
  • Next steps: If you are looking for a CFP, CPA or both Aprio provides an integrated approach that coordinates financial planning, investment advisory and tax and accounting services. Our experienced CFPs, CPAs and dual licensed advisors collaborate with your advisors to help maximize financial outcomes.
Schedule a consultation with an Aprio advisor today.

The full story

There are many designations when it comes to financial planners. For those who are unfamiliar, each role might seem very similar. However, each designation represents a very specific area of expertise.

There are two certifications that are a common cause of confusion – CFP and CPA. Here’s a breakdown of what makes these two financial roles different and who you should hire to support your financial goals.

What is a Certified Financial Planner (CFP)?

Certified Financial Planners (or CFPs) are individuals who specialize in helping clients achieve their financial goals and build wealth. From basic budgeting to investment advice, there are a lot of financial services that CFPs can offer.

Some CFPs offer holistic financial planning, while others will focus on specific areas. You’ll see CFPs offer services from retirement planning, estate planning, tax planning, divorce planning, and much more.

The biggest difference between someone holding a CFP certification versus a non-certified financial advisor is that they have a fiduciary duty to you. In order to keep their designation, they must commit to keeping your best interests in mind.

Requirements for a CFP designation

The requirements for a CFP certification are quite rigorous. Here is the breakdown of how CFPs get their certification.

  • Education – CFPs must hold a bachelor’s degree in addition to completing education that is specific to financial planning.
  • Examination – There is a standardized exam that must be passed.
  • Experience –  CFP applicants must complete 6,000 financial planning experience hours or 4,000 hours of apprenticeship.
  • Ethical standards –CFPs have to sign a declaration that commits them to a fiduciary duty to their clients.

What is a Certified Public Accountant (CPA)?

Certified Public Accountants (or CPAs) typically offer services related to accounting and taxes. These are two very important things to help you reach your financial goals, but CPAs typically don’t advise on your overall financial picture. Most CPAs are simply referred to as “accountants”

CPAs can help support individuals with their own tax needs or can work with companies to manage their financial accounts. You’ll typically see CPAs over services like preparing tax returns, managing your books, or auditing financial statements.

Requirements for a CPA license

The requirements to obtain a CPA license vary between states as the process is managed by each jurisdiction. However, here is the general breakdown of what you can expect from a CPA

  • Education – CPA applicants must hold a bachelor’s degree and complete the relevant coursework required in their state.
  • Examination – There is a standardized exam that must be passed prior to licensing.
  • Experience – Most states require a few years of experience working in public accounting after passing the prior to issuing your license.
  • Ethics – Most states require applicants to take an ethics exam.

Are there similarities between a CFP and a CPA?

CFPs and CPAs both play different roles in your financial journey, but there are many situations where they overlap or need to work together.

CFPs and CPAs are both highly regulated designations. The work that they’ve completed signals not only a commitment to their careers but also a deeper level of continued knowledge in the financial space. The continuous education helps to assure clients that these professionals are ‘up to date’ with current tax law, estate planning strategies, RMD rules, etc. This means that you can feel confident trusting these professionals with your financial journeys.

Ultimately, both roles exist to help you maximize your wealth and income and meet your individualized goals. They just do so in different ways.

What are the differences between a CFP and a CPA?

CFPs and CPAs each have very distinct areas of focus and expertise. As a result, they take different approaches when it comes to supporting your finances.

CFPs typically work with individuals or families to support their financial goals. Whether it’s investing or retirement planning, they can look at a broad range of opportunities and strategies to help you build your wealth.

On the other hand, a CPA will often work for corporations or business owners. However, this isn’t always the case – especially when it comes to individuals who have complex financial situations. They typically look at your finances from a tax lens and explore ways to reduce your tax liability.

You’ll also find that CFP certifications are typically more common. Simply because it covers a wide range of potential practice areas. The process to obtain a CFP certificate is a little more accessible.

However, neither license is better. In fact, many financial experts will hold both CFP and CPA designations so that they can offer more services to better assist their clients.

Should I choose a CFP or a CPA?

Choosing a CFP vs CPA ultimately depends on your needs. If you’re looking for help with tax planning, a CPA may be the way to go. On the other hand, if you’re looking for support with your overall personal financial goals, a CFP might be the better choice

That being said, many people need professionals who can cover both areas. It’s usually best to have a trusted advisor for both tax and financial planning – especially as a business owner or a high-net-worth individual. This way, you know you are covered in all facets of your financial situation.

When choosing your financial team, keep in mind that one of the biggest challenges is connecting the dots between advisors. This can make it difficult to ensure that your entire financial picture is considered. So make sure to choose advisors that are willing to work closely together. It can make a huge difference when it comes to achieving your financial goals.

Where possible, it’s ideal to get all your financial advisory services under one roof. This makes managing your finances a more seamless experience. However, choosing a financial team that has completed the required training and education is key to getting the individualized financial advice that you need.

In many situations, it can be beneficial to work with a CPA firm that can provide coordinated investment advisory, financial planning, and tax services. They have a team of experts in all areas of finance who can give you strategies and advice that take your entire financial life into consideration.

Instead of being the messenger between all your advisors, you get one team that aligns your tax planning, bookkeeping, company retirement plan administration, investments, and retirement strategies. Not only can this save you time, but it can be critical in optimizing your results.

Reach your financial goals with Aprio

Aprio is a premier business advisory and CPA firm in the US. Our team includes dual licensed CPAs and CFPs who can provide expert financial advice to simplify your financial life.

Our unique team approach allows us to share information and provide coordinated tax and financial management services for clients. From wealth management to business advisory, Aprio offers a wide range of top-tier services under one roof. By working together as a team, our integrated approach can improve efficiency and help you achieve optimal financial results.

Enjoy a ‘one-stop shop’ for all your financial needs so you feel supported by advisors that you can trust.

Whether you’re looking for a CFP, CPA, or both, Aprio can help. Contact us today to learn more about our services.

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About the Author

Caroline Galbraith

Caroline Galbraith is a director and wealth advisor for Aprio Wealth Management and Dental Wealth Management where she helps high-net-worth individuals, families, and executives and business owners implement sophisticated and personalized wealth strategies to achieve their goals. She specializes in estate planning, wealth transfers, tax management, risk analysis and investment strategy.