CFA vs CPA: Which Is Best For You?

There is understandably a lot of comparison and confusion between different financial qualifications. CFA vs CPA is no exception – they even sound similar!

We have had chartered accountants share their CFA experiences before, but in this article we will specifically compare the CPA and CFA charter in all aspects: career paths, exam formats, exam difficulty, salary differences.

This analysis has been a long time in the making, and we think we’ve come up with a definitive comparison. Let’s dive in!

CFA vs CPA: Career path differences

The CPA is fundamentally a qualification for those on an accountancy-focused career path, with job roles such as accountants, comptrollers, financial managers, CFOs, etc.

The CFA charter is for investment management and advisory, such as investment analysts, portfolio managers, investment strategists, consultants, wealth managers, etc.

CPA = compulsory, CFA = not compulsory: An important difference is that CPA is often compulsory, or at the very least heavily-encouraged in relevant roles, whereas the CFA charter, while encouraged in the investment industry, is not compulsory.

CFA vs CPA exams: key differences

Differences in curriculum focus

The CFA curriculum focuses on investment management and valuation – aspects that help investors make investment decisions.

The CPA curriculum focuses on auditing, financial accounting, regulation – ensuring companies accurately reflect their business performance and financial health.

This anecdote about CPA vs CFA might help: 

Certified Public Accountants prepare and audit financial statements, while Chartered Financial Analysts read and analyze the financial statements.

Depth and breadth of material

The difference between CPA and CFA in terms of depth of material is about the same, when comparing similar topics such as pension accounting and FRA topics.

Generally speaking when comparing similar topics, neither one would be harder than the other.

I would say that the material goes into similar depth, but CFA exams have the trickier and more confusing questions.

However, the CFA exam is considered a lot tougher overall because it covers a much wider range of material compared to the CPA exams.

This not only means there’s more areas and studying to do, but makes the exams harder, as you have to remember a lot more material at the same time.

CFA exam = 3 levels, CPA = 1 level

Each CFA level also builds on the curriculum from the previous level, i.e. CFA Level 2 will require a strong knowledge of CFA Level 1, and CFA Level 3 will require a good understanding of CFA Levels 1 and 2.

The CPA exams are comprised of 4 exams but arguably this is just 4 parts of one ‘level’. The material for each exam is exclusive to its own, which means you can study for each exam without having to remember material from another exam. You don’t even have to take them in order, and finish all 4 exams in 18 months.

CFA exams likely involve learning more new material

One important thing especially if you’re considering CFA from CPA, is that when you’re eligible to take the CPA exam, you’re likely to have learned 90% of the information needed to pass the exam already (from your current accounting job) – you just need to revise and review.

The CFA exam is likely to involve a lot more learning of new material and concepts.

CFA vs CPA: study time needed

Because the breadth of material is not as wide, and candidates are likely to be reviewing concepts they learnt at work already, the CPA exam requires significantly less time to prepare for than the CFA exam.

The AICPA recommends that candidates spend between 300-400 hours to study for the entire CPA exam.

The CFA exam usually involves 300-400 hours of study per level, so 900-1,200 hours in total, assuming you pass all levels the first time!

So the CFA exam requires approximately 3x more study time than the CPA exam.

CFA vs CPA difficulty

Are the CFA exams harder than the CPA exams? Or are the CPA exams harder than the CFA exams?

As we’ve established when looking at the differences between the CFA and CPA exams, the breadth, depth and length of the CFA exams combined make the CFA exams a lot more challenging to undertake and pass than the CPA exams.

But how much more difficult? No one has quantified this in a comparable manner… until now.

Reasons why CFA exams are harder than CPA exams

Based on the points made above, here are the existing factors why the CFA exams are significantly harder than the CPA exams:

1. CFA exams requires typically 3x more study time than the CPA exams
2. CFA exam involves learning new concepts rather than reviewing material you already use at work
3. CFA exam material covers a lot more than the CPA exams
4. Every CFA exam level requires knowledge from the previous exam, whereas the CPA exams do not

Does the pass rate data back this up?

Here’s where it gets confusing for a lot of candidates – pass rates across different exams are not comparable as there can be huge differences in retake eligibility, exam formats and other circumstances.

Why CPA exam pass rates cannot be compared to CFA exam pass rates

CPA exams historically average about 50-60% for each exam.

But the 4 CPA exams are not interdependent: you can pass them separately. This is different from the CFA exams where you need to pass each exam level before progressing to the next. You’ll find that usually the same well-prepared candidates are passing most of the 4 exams, and the less-well-prepared candidates are the ones in the failing bucket for most of the 4 exams.

Candidates can retake any CPA exam within 24 hours. Additionally, with the CPA exam, failing candidates are allowed to apply to retake their exam 24 hours after receiving their results. You can now even retake this within the same exam window, meaning you can retake the exam pretty much immediately.

CFA exams pass rates, on the other hand, are about 22-56% for each exam level.

This is where the confusion of CPA vs CFA pass rates comes from. 22-56% CFA pass rate is only slightly less than 50-60% CPA pass rate, right? Wrong.

You have to pass one CFA level to take the next. Every failed CFA Level 2 candidate has previously passed CFA Level 1. Similarly, every failed CFA Level 3 candidate has previously passed CFA Levels 2 AND 1. And even with the recent changes, it still takes a heck of a lot longer to retake a CFA exam (6 months) compared to a CPA exam (a few days).

That why we’ve derived our 300Hours Pass Ratio metric.

Our Pass Ratio allows candidates to reliably compare exam difficulty across different qualifications.

300Hours Pass Ratio shows CFA exams 2-3x more challenging than CPA exams

The 300Hours Pass Ratio formula: You can deduce an ‘overall’ and more comparable Pass Ratio by dividing the average number people obtaining the full qualification by the number of new candidates:

300 \space Hours \space Pass \space Ratio \space over \space period \space t = \frac{Newly \space qualified  \space candidates_t}{Newly \space registered \space candidates_t}

Calculating the CPA Pass Ratio: Using data from the AICPA Trends report across the most recently available 3 years’ data, this gives an average / overall / blended pass rate of about 62%:

\small CPA \space Exam \space Pass \space Ratio_{\space 2016-2018}=\frac{27,889+25,514+23,941}{48,004+39,630+36,827}=62\%

This Pass Ratio means that based on the last 3 years’ data, about 62% of CPA candidates go on to become CPAs.

You can also calculate a pass ratio by dividing the average annual number of new CFA charterholders by the average annual number of CFA candidates. When you look at the data, you see that crucially only about 24% people that register for the CFA Program end up passing CFA Level 3:

\small CFA \space Exam \space Pass \space Ratio_{\space 2017-2019}=\frac{21,380+19,920+17,173}{157,344+156,752+131,369}=24\%

• Comparing 300Hours’ pass ratios:
  • CPA pass ratio: ~62%
  • CFA pass ratio: ~24%
• If you compare both pass ratios, the conclusion is that a typical CPA candidate is 2-3 times more likely to go on to become a CPA than a typical CFA candidate is to become a CFA charterholder.
• This implies that factoring in everything, and assuming you’re a ‘typical’ candidate for both qualifications, becoming a CFA charterholder is 2-3x more difficult than becoming a CPA.

CFA vs CPA Salary Differences

For salary data, we’ve referred to our own CFA Salary database, as well as data from PayScale. We restricted our analysis to the US market to maintain good comparability between CFA and CPA salaries.

Here’s what we found.

CFA Charterholder salary overview: by job title, companies, gender, experience

From our own databases and PayScales, we’ve deduced that the average CFA charterholder in the US is estimated to earn $95,023. This sweeping average includes all job types, industries and experience levels, so it isn’t particularly useful to a candidate with specific circumstances. But we can use this to compare with an equivalent number in the CPA industry.

CPA salary overview: by job title, companies, gender, experience

Using the same methodology that we used to calculate the CFA average salary, we deduced that the average US CPA is estimated to earn $87,979. This implies that the average CPA earns 7.5% less than the average CFA charterholder.

But is that really true? If you compare the experience levels of the CFA and CPA samples, you’ll see that in our analysis, the average CFA charterholder is more experienced than the average CPA. So you would expect the CFA charterholder to earn more, since they are likely to be in a more senior and higher-paid position.

So who really gets paid more, CFA charterholders or CPAs? Given both factors, I’d say that it’s a tie: CFA charterholders and CPAs show similar salary levels on average.

Which is Better, CFA or CPA?

So which is better, CFA or CPA? There isn’t really an answer that will fit all situations – each person will have a different best fit for them.

The important thing is to assess your desired career path carefully. Do you want to help prepare financial statements, or analyze financial statements for investment? If it’s the former, the CPA might be suitable, and if it’s the latter, you might want to check out the CFA charter.

Hope the above helps when deciding between the 2 finance qualifications. What are you leaning towards currently? Leave a comment below!

Meanwhile, here are some related articles that may be of interest:

• What is the CFA Exam? Our Beginner’s Guide
• CFA Salary: How Much Does Your CFA Charter Increase Your Pay By?
• CFA Career Path: What do CFA Charterholders Typically Do?
• Best Finance Certifications: Our Top List