The Chartered Financial Analyst (CFA®) and Certified Financial Planner (CFP®) designations are two distinct certifications in the finance industry, each with its own unique focus. Understanding their differences can help you decide which certification to pursue based on your career aspirations.
Both certifications are highly valued in the financial services industry, but each caters to different sectors. Those who pass the CFA® exam become CFA® charterholders, who might engage more in corporate environments, while CFP®s often work directly with individual clients. Both certifications have stringent ethical requirements, emphasizing the importance of integrity and professionalism in financial dealings. The bachelor’s degree in finance from University of Maryland Global Campus (UMGC) includes a registered CFP® program that is the required education eligibility for the certification examination. In addition, the master’s in management with a specialization in financial management from UMGC can help you prepare for relevant industry certifications including the CFA® exam.
CFA® (Chartered Financial Analyst)
Focus and Scope: The CFA® program primarily focuses on investment analysis and portfolio management. It is globally recognized and regarded as a leading credential in investment management. The program includes alternative investments, economics, derivatives, financial statement analysis, statistics, portfolio management, investment analysis, and security valuation.
Earning a CFA® is often a prerequisite 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. To become a CFA® charterholder, students must pass the three levels of the CFA® exam, with each level of the curriculum building on the previous level and becoming more complex.
Career Paths and Opportunities: According to the CFA® Institute, charterholders often find opportunities in investment banking, portfolio management, risk management, and research analysis. CFA® charterholders occupy a range of investment decision-making roles, including buy-side, sell-side, corporate, and advisory positions. Many CFA® charterholders are portfolio managers (including hedge fund managers), private wealth managers, equity research analysts, manager-of-managers (MoM), and brokers.
Salary Potential: According to Salary.com, the average salary for the position of senior chartered financial analyst in the U.S. is $99,000. Those who hold the CFA® certification could expect an average salary ranging from $78,000 to $120,000 per year. Keep in mind that salary ranges can vary widely depending on many important factors, including role, location, education, certifications, additional skills, and the number of years spent in the profession.
Duration and Requirements: Obtaining a CFA® typically takes two to four years and requires candidates to pass three levels of exams, with each taking 400-500 hours of study in preparation. In addition, candidates must hold a bachelor’s degree (or be an undergraduate student within 11 months of graduation), accumulate three years of relevant work experience, and adhere to the CFA® Institute’s professional and ethical standards. The CFA® is often considered more challenging due to its comprehensive examination process and the depth of topics covered.
Pricing of CFA ® Program: For those who wish to take the CFA® exam, there is a $350 enrollment fee when you sign up for the exam provided by the CFA® Institute. Early registration for an examination is $940, while standard registration is $1,250 for each level of the CFA® examination (Level I, Level II, and Level III).
CFP® (Certified Financial Planner)
Focus and Scope: The CFP® certification is a standard of excellence in comprehensive financial planning. It encompasses a range of topics, including insurance, investments, retirement, tax planning, and estate planning.
Career Paths and Opportunities: For those interested in personal financial planning and working with individual clients on broader topics such as insurance, investments, retirement, and estate planning, the CFP® is a great choice. CFP® professionals typically focus on financial planning, wealth management, and personal finance consulting. They often serve as financial advisors, estate planners, or retirement specialists.
Salary Potential: According to the CFP Board, Inc. who provides the CFP® certification, a CFP® professional can expect an average salary of $145,000 for one to eight years of experience. For a CFP professional with nine to 14 years of experience, the average salary is $217,000, and $297,000 for a CFP professional with over 15 years of experience.
Duration and Requirements: The CFP® certification by the CFP® Board generally takes one to two years to complete, depending on one’s background and study pace. Once you pass the CFP® exam, you must complete 30 hours of continuing education every two years to maintain the certification. CFP® candidates have to complete 4,000 to 6,000 hours of work experience related to the financial planning process as either a professional or apprentice. In addition, they must have 12 to 18 months of coursework and hold a bachelor's degree or higher from an accredited college or university. CFP®s are held to a strict code of ethics and professional standards that must be continually maintained. For example, they must complete 30 hours of continuing education every two years. It is important to fully review the requirements provided by the CFP® Board before deciding to take the CFP® certification exam.
Pricing of CFP® Program: There is only one CFP® Certification Examination. Early registration for the exam is $825, standard registration is $925, and late enrollment (with permission) is $1,025.
How UMGC Can Help You Stand Out
UMGC is one of 340 educational institutions that include a registered CFP® program. Candidates who have fulfilled the CFP® Board's certification coursework requirement are eligible to sit for the CFP® exam. At University of Maryland Global Campus (UMGC), the required registered CFP® courses are:
Federal Income Tax I (3 Credits, ACCT 323)
Fundamentals of Building Wealth (3 Credits, FINC 321)
Investments (3 Credits, FINC 340)
Life and Health Insurance (3 Credits, FINC 352)
Retirement and Estate Planning (3 Credits, FINC 355)
Financial Plan Development (3 Credits, FINC 490)
These courses are all completed when you earn your bachelor’s degree in finance at UMGC. The bachelor’s program gives students a foundation in the principles of business, economics, and accounting with an in-depth focus on the details of finance and financial management. It can also serve as an important first step toward earning whichever certification best fits your career aspirations.
To qualify for the CFP® certification, UMGC must verify your education eligibility, and the UMGC Finance and Economics Department must upload your academic information (but not your grades) to the CFP® Board of Standards. For CFP® education eligibility verification, send your UMGC CFP® Student Data Form to kathleen.sindell@umgc.edu.
Reference on this webpage to any third-party entity or product does not constitute or imply endorsement by UMGC nor does it constitute or imply endorsement of UMGC by the third party.
Reference on this webpage to any third-party entity or product does not constitute or imply endorsement by UMGC nor does it constitute or imply endorsement of UMGC by the third party.
/blog-masters-accounting-financial-management-linklist-shutterstock-1666851595.jpg)
Share This