CFA vs CPA salaries being compared on paper

Posted by: Kaplan Schweser
Published: August 20, 2020

Which has better earning potential—the CFA® charter or the CPA certification? The average salaries for a Chartered Financial Analyst® (CFA) and a Certified Public Accountant (CPA) fall in a broad range. But, even on the lower end of that range, the earning potential for both is solid. Interestingly, according to several sources, the CFA charter has the edge. This article breaks it down for you.

What’s the Difference Between a CFA® Charterholder and a CPA?

To understand the salary ranges for those with these credentials, it’s good to know the difference between the two. CFA charterholders and CPAs both review financial records, consult with clients, and use calculations in their roles. However, CFA charterholders focus on understanding market conditions, assessing businesses, and determining the best way for businesses or individual clients to invest their money. They use investments to produce revenue for their clients, and some charterholders buy or sell securities, funds, and more on behalf of their clients.

By contrast, CPAs produce financial records. They may calculate taxes owed or assess business practices to identify ways to save money. They must also ensure that applicable financial regulations are followed. Some CPAs use their accounting skills to identify evidence of fraud or other crimes.

Considering the CFA charter? Before you choose your CFA exam date, download this free Before You Decide to Sit for the CFA Exam eBook.

CFA Charter Salary

According to Payscale, in the United States, CFA charterholders can earn anywhere from $64,234 to $255,000 annually. Payscale also estimates the median CFA charterholder salary to be $88,436 a year. The reason for such a broad range is the fact that there is a lot you can do with the charter in jobs with varying degrees of responsibility. Bonuses and years of experience make a difference, too.

Here are the average salaries of some of the most common positions for CFA charterholders:

  • Research analyst: CFA charterholders who are research analysts earn, on average, $73,954 a year, according to Payscale.
  • Financial advisor: Financial advisors with the CFA charter earn a median base salary of $110,000 annually.
  • Relationship manager: CFA charterholders who help their company maintain business relationships with partners and clients average $120,000 a year.
  • Portfolio manager: The median base annual salary for a portfolio manager with the CFA charter is $132,500.
  • C-level executive: CFA Society Chicago says that chief investment officers with CFA charters have a median annual base salary of $227,500; for CFOs, Payscale says it’s $170,618.

You can find more salary information for these and other roles in this article.

CPA Salary

The jobsite indeed.com reports that the average salary for a CPA ranges from approximately $54,670 per year to $140,686 per year. Payscale says the median annual income for CPAs is $66,287. At minimum, CPAs have completed certification requirements after earning a bachelor’s degree in accounting and are qualified for better positions than regular accountants. If a CPA has a master’s degree, the median annual income increases to $91,000, according to accounting.com.

Here are the average salaries for some of the most common positions for CPAs:

  • Accountant and auditor: Accountants and auditors who are CPAs earn a median annual salary of $70,500.
  • Financial controller: Financial controllers oversee and direct a company’s accounting functions. The median annual salary for CPAs in this position is $81,813.
  • Corporate controller: CPAs in the executive role of corporate controller can expect a median salary of $96,728 a year.
  • Chief Financial Officer: The median annual salary for CPAs who are CFOs is $131,194.

Preparing for the Exams

Another similarity between the two designations is that the exams are nearly impossible to pass if all the candidate does is last-minute cramming. So, whether it’s the CFA exam or the CFP® exam, you should start studying early.

To prepare for the CFA exam, CFA Institute advises a minimum of 300 hours of study for each level. You should focus on the Learning Outcome Statements (LOS) from CFA Institute because they detail exactly what you are expected to do on exam day. CFA exam preparation classes can really help, as will immersing yourself in practice questions. In addition, you should plan to take as many mock exams as you can to get used to the whole exam process.

CFP Board recommends you spend at least 250 hours studying for the CFP® exam. You’ll need to pace yourself because the exam asks you to apply knowledge to case studies. So make sure you have the space in your life to dedicate the necessary hours to study. Most of the time, failing the exam is the result of not preparing properly. If you put together a stellar study plan and are willing to invest in exam preparation, you can increase your odds of passing.

Why CFA Charterholders Have Greater Earnings Potential

As we noted at the beginning of this article, both the CFA charter and the CPA certification have solid earnings potential. Both also offer great opportunities for advancement. So, why is the salary range for CFA charterholders higher? Much of that has to do with the work they do, where they work, and the clients they have.

Because they know the markets and have expertise in quantitative methods, economics, financial reporting, investments analysis, and portfolio management, CFA charterholders bring a great deal of value to their employers. These employers tend to be financial institutions and brokerages that offer a higher salary and commission to those with an investment analysis and management background. In addition, 7 percent of CFA charterholders make it to the C-suite of finance firms and banks, which drives the median salary even higher.

Ready to Take Advantage of the CFA Charter Earnings Potential?

Although being a CFA charterholder does not guarantee you the salaries discussed in this article, it can make a difference in your earnings potential. Find out what you need to do to earn the charter and how our CFA exam study packages can help.

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