What is the Difference between the CFA® Charter and CFP Mark?

What is the Difference between the CFA® Charter and CFP Mark?

Whether you are considering a career in finance or are a professional, you have probably heard about CFA and CFP designations. If you wonder what they mean and which designation is the right fit for you, we have the answers for you.

What is the CFP mark?

The certified financial planner mark is a credential for financial planners that the CFP Board administers. CFP certification is one of the most prominent designations in personal financial planning. CFP professionals work with clients and help them meet their long-term financial goals through creating comprehensive financial plans. Personal financial goals include retirement, purchasing a home, starting a business, saving for college tuition, among others.

What is CFA certification?

To become a Chartered Financial Analyst, you should complete the CFA curriculum from the CFA institute and gain the required experience in the investment industry. CFA is an internationally recognized qualification for financial analysts.

With a CFA designation, you will focus on understanding financial markets, analyzing various businesses, and advising companies and individuals to invest. CFA charter holders trade securities, manage funds on behalf of their clients to earn revenue. As a result, achieving a CFA designation will help you become an investment analyst, fund manager, portfolio manager, and financial advisor.

What are the requirements to enroll for CFA and CFP?

Requirements for earning a CFA charter are;

  1. To enroll in the CFA professional course, you should hold a bachelor’s degree or an equivalent or be in the final year of your undergraduate studies. You are also eligible to register for the CFA program if you have at least 4,000 hours of relevant work experience or 4,000 hours of the combined university and professional experience.
  2. Sit for and pass all three levels of the CFA exams.
  3. You should agree to abide by the CFA Institute Code of ethics and become a member of the institute by paying the fee.
  4. You should provide proof of 4,000 hours of full-time work experience in a position involving decision-making on investments or a product that contributes to the decision-making process. The work experience can be from before or after you did the CFA exam.

What are the CFP and CFA exam formats, topics, and pass rates?

The CFP exam is computer-based, multiple-choice, and consists of two three-hour sessions with a thirty-minute break. The CFP Board offers the exam in March, July, and November in almost fifty locations nationwide. The CFP exam topics are:

➢ Tax planning
➢ Education planning
➢ Retirement savings and income planning
➢ Investment planning
➢ General financial planning principles
➢ Estate planning
➢ Professional conduct and regulation
➢ Risk management and insurance planning

Although the CFP Board does not announce the passing score, the average pass rate in 2019 was 62% and 66% for candidates taking the exam for the first time.

The CFA charter curriculum has three levels and covers a broader range of topics on financial analysis. The core topics in CFA include; ethical and professional standards, quantitative methods, economics, financial reporting and analysis, corporate finance, equity investments, fixed income, derivatives, alternative investments, and portfolio management. The CFA Institute recommends putting in at least 300 hours of study on each level.

Due to the postponed 2020 exams, the CFA Institute announced that there would be additional exam windows for all levels in 2021. CFA level II will have four test windows, while level II and level III will have two exam windows. 2019 is the last year where complete data is available since the CFA Institute postponed the 2020 exams due to the global Covid-19 pandemic. The CFA Institute provided the following data for the exams carried out in 2019:

• Level I (June) – 41%
• Level I (December) – 42%
• Level II – 44%
• Level III – 56%

What are the differences between CFA Charter and CFP Mark?

The main similarity between the CFA charter and CFP mark is that both designations require you to put in a significant amount of hours of study. The CFA Institute recommends that candidates taking the CFA exam put in at least 300 hours of studying for each level. On the other hand, the CFP Board recommends spending a minimum of 250 hours preparing for the CFP exam. Additionally, you do not require to have completed your degree to enroll for either course.

The main difference between the CFA Charter and the CFP Mark is that the CFA curriculum has three levels while there is one CFP level. In addition, the CFA exam is focused on financial concepts and investments, while CFP professionals focus on financial planning.

However, you do not have to choose between the two designations; you can earn both. As a financial professional, earning a CFA charter and CFP mark will help you deal with high-net-worth individuals or set up an investment advisor company. In addition, the CFA Charter is CFP Board approved as a coursework requirement to earn CFP certification.

If you are considering earning a CFA charter, contact Analystprep.com and enroll in our study packages. You will gain access to a vast library of study materials to help you prepare for your exams. In addition, our online study notes and video lessons will help you assimilate the most complex concepts and pass on the first try.

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