The Difference Between the CFP® and CFA Certifications
The CERTIFIED FINANCIAL PLANNER® (CFP) and the Chartered Financial Analyst (CFA) are two of the most widely recognized and sought-after certifications among financial professionals; however, there are some key differences between the two.
The CFP® certification is mainly for financial advisors and wealth managers who work directly with clients on holistic financial planning or retirement planning. These advisors are typically entrepreneurs with their own independent wealth management firms, or they work for larger financial institutions with a national or regional footprint.
The CFA certification is primarily designed for financial professionals who specialize in investment analysis, portfolio management, asset valuation, and financial market research. These professionals are typically employed by institutional financial firms like investment banks, hedge funds, and asset management firms.
CERTIFIED FINANCIAL PLANNER® (CFP)
The CFP® certification is widely recognized as the gold standard for financial advisors who focus on helping individuals and families with comprehensive financial planning to achieve their financial goals. This certification encompasses many aspects of a client’s life, including:
- Retirement and investment planning
- Cash flow and debt payoff strategies
- Estate planning
- Tax planning
- Education planning
- Risk Management
- Insurance
As the industry continues to shift from commission-based products to comprehensive fee-based advice, one of the first questions prospective clients will ask you when evaluating potential financial advisors is, “Are you a CFP® professional?” Many clients prefer to work with a CFP® because they must adhere to the fiduciary standard—meaning the advisor is required by law to act in the best interest of their clients.
Most CFPs are fee-only or fee-based. Fee-only CFPs do not earn commissions on the investment or insurance products they sell to clients. They are compensated in the form of hourly fees, flat fees for specific services, or a percentage of assets under management (AUM).
Fee-based CFPs are compensated in the form of fees, but they can also earn commissions on certain financial products they sell to clients, such as life insurance, annuities, or mutual funds. The CFP Board describes this compensation structure as ‘fee and commission.’
If you’re considering pursuing the CFP® certification, it will take a few years, and you must meet the following requirements:
- Bachelor’s degree or higher from an accredited college or university
- Completion of the CFP Board-registered education program
- Pass the CFP® Exam
- Accumulate 6,000 hours of professional experience related to financial planning or 4,000 hours of an apprenticeship - You can complete the experience before or after you take the exam
- Adhere to the CFP® Ethical Standards
- Complete the ongoing continuing education requirements to maintain the certification
Chartered Financial Analyst (CFA)
The CFA certification is regarded as the premier certification for professionals specializing in financial and investment analysis. Globally, there are only 200,000 professionals with this certification, and becoming one can be extremely challenging, as you must pass a series of three exams, all of which have a historical pass rate in the 40-55% range. In addition to passing the three exams, you must also:
- Complete 4,000 hours of relevant work experience over at least 36 months (you can complete your work hours while completing the modules and exams)
- Apply for membership with the CFA Institute, which requires two to three professional references
- Pay your annual membership fee
Which Certification Is Right for You?
When selecting which of these certifications to pursue, consider your career goals, aspirations, and what you plan to specialize in. If you are or want to be an independent financial advisor who helps clients with financial and retirement planning, the CFP® certification will likely have the greatest impact on your career. On the other hand, the CFA designation would be the better choice if you plan to work at a large financial institution focusing on investment analysis or portfolio management.
Copyright © 2025. Kestra Financial, Inc. is the parent company of Kestra Private Wealth Services, LLC (Kestra PWS), Kestra Advisory Services, LLC (Kestra AS) and Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Securities offered through registered representatives of Kestra IS. Investment advisory services may be offered through appropriately licensed representatives of Kestra AS or Kestra PWS. Except for the referenced Kestra companies, Kestra IS is not affiliated with other entities referenced on this document. Kestra Financial, Inc. is a subsidiary of Kestra Holdings.
