When it comes to managing your money, many people choose to seek the services of a professional. That being said, there are many different roles that various professionals play when it comes to money management. Some help you earn it on the front end, while others help you account for it on the back end. Two of the main types of money managers are a CPA and CFA. Here is the difference between a CPA and CFA and how to determine which one is right for you.
A CFA or Chartered Financial Analyst is someone who has the training and certification to advise you on a wide range of investment strategies. The ways in which you can invest money are almost limitless but they all come with both some benefits and limitations. A CFA can help you choose the right blend of short term and long term strategies as well as a safe mixture of high-risk or low-risk options. Some investments need more careful management than others, so a CFA can help you find the right investments for your desired level of involvement. A CFA will also work with a CPA if you have one to analyze your current financial position and how you currently handle and manage your current cash flow and income.
A CPA or Certified Public Accountant is a professional accountant that has been certified through the American Institute of Certified Public Accountants (AICPA). CPA’s are required to be tested both through the AICPA as well as through whatever state they practice. Much like attorneys, every state has a different set of standards and requirements they need to meet to qualify. A CPA can not only manage your finances, but they can also act on your behalf in certain legal matters such as filing your taxes or auditing financial statements.
In short, a CPA helps you track and manage incoming money, while a CFA can help you determine how to invest any profits or excess funds once your immediate financial needs have been met. CPA’s can also work for both individuals or businesses or can help individuals who own businesses keep their personal and business assets separated.