CFP vs CPA: Which Should You Choose for Financial Advice?

When weighing up a CFP vs CPA for financial advice, which should you choose? We explain what each means to help you decide.

Only 36% of Americans think they have a good retirement plan and it’s on track. Unfortunately, the vast majority of people live paycheck to paycheck with a little set aside for a rainy day.

You’re going to want to retire someday, and you can’t depend on Social Security to take care of your retirement. You need good financial advice to get your retirement on track and build wealth.

Should you see a CFP or CPA? Both work on financial issues, but they have two very distinct roles in your finances. How can you compare a CFP vs CPA?

Keep reading to discover the difference between the two and where you should turn for financial advice.

CFP vs CPA: Who Does What?

A CPA is a Certified Public Accountant. These are highly skilled people who work with taxes, financial audits, and accounting.

A CPA goes to school to obtain a four-year degree in accounting or business. They also have to have a certain amount of experience and pass an exam.

CPAs register with their state’s board of accountancy. They also have to take continuing education to maintain their standing.

They might work with homeowners to prepare their tax returns, represent a small business facing an IRS audit, or help a taxpayer resolve back taxes.

A CFP is a Certified Financial Planner. Financial planners are also called financial advisors and wealth planners. They create long-term and short-term investment strategies based on your financial goals.

These professionals also have to have a degree and pass an exam. To get the CFP designation, a person has to have several thousand hours of experience as a financial planner.

Your Financial Goals

As you can see, a lot of your decision depends on your financial goals. If you have tax planning questions or want to know how investments impact your tax bill, you can use a CPA for financial advice.

Keep in mind that CPAs will not recommend an investment or tell you that you shouldn’t invest. It’s outside of their scope of practice.

They’ll only tell you the tax implications and let you decide.

There are CPAs that are also CFPs. That’s the only way you’ll get financial and tax advice at the same time. For CPAs and CFPs that don’t hold both designations, they often refer business to one another.

If you want to grow your wealth, received an inheritance, or want to start a retirement plan, you’ll want to visit a CFP.

Most financial planners get paid from commissions. Keep this in mind when you invest based on their recommendations.

A fee only financial advisor gets paid by clients. They charge a flat or hourly rate for their services.

Where to Get Financial Advice

Where should you turn for financial advice? It depends on what your goals are. There shouldn’t be a debate between CFP vs CPA. Both work on different aspects of your finances.

A CPA provides advice regarding taxes, while a CFP creates strategies to reach your financial goals.

Do you want more personal finance tips? Check out the other articles on the blog today!

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