“The main difference between a CFA and certified financial planner is that a certified financial planner works with individual clients to achieve personal financial goals in the short- and long-term,” says Rodriguez. While both titles tread the same wealth management turf, a chartered financial analyst plays a very different role than a certified financial planner, and in most cases offers a very different skill set.
The designations for certified financial planner (CFP) and CFA may seem somewhat similar at first glance. CFA vs CFP: Different Skills for Different Needs “In educational terms, holding a CFA is equivalent to achieving a master’s degree in one’s field,” says Rodriguez. They need to pay annual dues and certify they remain in good standing with the CFA principles. “The pass rate for each section of the three exams is less than 40%.” After all of the exams, that works out to a rate of less than one in five candidates receiving their CFA, according to the CFA Institute.Įven after the exams and the prerequisites to take the exam are met, CFA’s still have some work to do.
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“The exams assess the person’s knowledge of economics, personal and professional ethical situations, money management scenarios, as well as other topics relating to money management and finance that must be expressed, depending on which test, either quantifiable or qualitatively, or both,” says Rodriguez. Most CFA applicants don’t make the cut, for a variety of reasons. The tests are famously rigorous and may require 900 hours or more of study in 10 topic areas to prepare for. Be able to travel worldwide, be fluent in English and reside in a country that recognizes CFAs.Have 4,000 hours of relevant work experience acquired over at least three sequential years.Have a bachelor’s degree or a degree from an equivalent academic program or 11 months or fewer to graduation if they are still studying.To become a CFA charter holder, candidates must:
“The requirements of becoming a CFA are rigorous and retain a type of elite status, which is another reason why CFAs can be expensive for the financial consumer who hires them,” says Daniel Rodriguez, director of operations at Hill Wealth Strategies, in Richmond, Va. It’s considered very tough to run the gauntlet of training and testing required to achieve CFA status.
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“Most work for institutions managing million-dollar-plus portfolios and don’t work directly with regular financial consumers.” How to Earn a CFAīecoming a chartered financial analyst is a complicated proposition, by design. The only downside to hiring a CFA? “They are tough to find,” Keil says.
“They are trained in deep investment analysis, well beyond the knowledge of a typical financial advisor.” “A CFA charter holder is someone who has attained one of the highest distinctions in the investment management profession,” says Jeremy Keil, a CFA and financial planner at Keil Financial Partners in New Berlin, Wisc. The CFA Institute awards the certification, which is widely considered the apex for professional development in investment management. To earn the title of CFA, charter holders must demonstrate expertise in financial research, portfolio management, investment consulting, risk analysis and risk management.Įarning a CFA is often a requirement for becoming a chief investment officer at an investment firm or public company engaging in credit analysis, corporate accounting and auditing or doing financial planning for high net-worth individuals. When you see CFA as part of someone’s title, that means they are a professional with in-depth training in the core skills of investment strategy and high-level money management.
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