Which is Harder – the CFA or CFP® Exam?

Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.

I was awarded the right to use the Chartered Financial Analyst (CFA) designation in 2006. I am now awaiting similar news from the CFP Board regarding the CERTIFIED FINANCIAL PLANNER™ (CFP®) certification. I completed the education requirement, passed the test, and submitted my work experience and ethics pledge. Once the program administrators email my old boss and look me up on IAPD, I expect to pass inspection and be awarded the use of the CFP® marks.

Why the heck did I do both? Am I just collecting letters after my name to look fancy? Did I need an excuse to ignore my family and stay indoors in the beautiful weather? Perhaps I want all the financial calculator manuals. (Okay that last one, maybe.) But the real answer is, I enjoyed learning the material and wanted to increase my competence in the relevant fields.

What’s the difference?

The two programs are very different. Both are extremely valuable for improving and demonstrating competence in their respective fields, which overlap a bit. The Chartered Financial Analyst program involves a series of three tests covering material specific to investing and financial analysis, such as accounting, statistics, portfolio management, economics, and ethics. It is graduate-level work – much of it included material I studied while earning an MA in economics with a business and finance concentration. (That totally gave me a head start on the stats and econ portions!) The CERTIFIED FINANCIAL PLANNER(TM) certification is designed for financial planners, rather than investment specialists. (Well-named, both of them, eh?) It covers topics including but not limited to investments, taxes, retirement planning, estate planning, and ethics. It is also graduate-level work, and I did little of it in my master’s program; much was new to me.

When I started looking into CFP® certification, a surprising number of colleagues said something to the effect, “Oh well you passed the CFA exams, so that will be easy for you.” And foolishly, I believed them. Hello, hubris, my old friend! I got it in my head that I could just whip this out in six months and get on with my life. No such luck. This was *theoretically* possible. Because of previously earning the CFA designation, I was permitted to bypass most of the educational component of the CFP® certification, complete a capstone course or project, and then sit for the exam. I looked up what would be on the exam. Here was the first hint that my expectations were absurd. I was confident in the investment topics.