If you’re a Certified Public Accountant (CPA), you may seek ways to diversify your current skill set and increase your value in the marketplace. One avenue you could take is to become a financial advisor. But can a CPA become a financial advisor?
After all, Certified Public Accountants are already well-versed in financial planning, business strategy, and tax law—all of which come in handy when helping clients manage their personal finances.
While CPAs have the knowledge they need to understand the complexities of financial advising, they must also gain additional certifications and licenses before they can legally offer financial services as an advisor.
In this blog post, we’ll cover various considerations CPAs should consider when evaluating whether becoming a Financial Advisor is right for them. Read on to learn more!
What’s the Difference Between a CPA and a Financial Advisor?
Whether you’re looking to expand your career prospects or considering a transition into the financial industry, you may wonder what the difference is between a Certified Public Accountant (CPA) and a Financial Advisor. The short answer? CPAs and Financial Advisors help individuals and businesses with their finances, but they serve different roles within the field.
CPAs are often thought of as scorekeepers. They are trained in accounting and prepare financial reports, such as tax returns, audits of financial statements, estate planning documents, and budget analysis. They advise their clients on tax-related matters, but their primary focus is preparing accurate records for companies or individuals.
On the other hand, financial advisors are more like navigators—they help you navigate the confusing world of investments and financial planning by guiding retirement plans, investments, insurance policies, taxes, estate planning strategies, and more. Unlike CPAs, who work mainly with numbers and records, Financial Advisors assess risk management strategies for their clients through detailed analysis and outline investment strategies that meet their individual needs.
Can a CPA Become a Financial Advisor?
Are you a CPA looking to transition into the world of financial advising? The good news is that it’s possible but will require additional education and experience.
First, CPAs must fulfill certain educational requirements to become certified financial advisors. This includes taking investments, insurance, estate planning, retirement planning, and more courses. Once these courses are completed, the CPA must pass a series of exams before officially being certified as a financial adviser.
Although this sounds quite daunting, the bright side is that with the knowledge and experience of being a CPA already under your belt, you are already well on your way to becoming a financial advisor. As a CPA, you have more than a foothold in finance and accounting—you have key insights into taxation and regulations that many non-CPAs don’t possess.
Ultimately, as long as you are willing to put in the time and effort to get certified and get up to speed on financial advising topics, becoming a financial advisor is an attainable goal for any CPA.
Qualifications Required to be a CPA?
Many people don’t know that becoming a CPA is no small feat. You’ll need to check with your state or local government for specific requirements, but some general qualifications you’ll need include:
- A four-year bachelor’s degree in accounting, finance, or a related field
- A minimum of at least one year of full-time professional accounting experience
- Passing score on the Uniform CPA Exam administered by the American Institute of Certified Public Accountants
- Continuing professional education (CPE) courses to remain certified
Most states also require CPAs to obtain additional licenses, such as a Series 7 license to practice as financial advisors. This requires even more coursework and an additional round of exams. Many states also require their CPAs to take additional ethics training or complete extra continuing education every year to stay certified.
So as you can see, becoming a CPA isn’t for the weak of heart– it’s a rigorous process involving lots of hard work and dedication, which shows that CPAs are serious about their craft and are more than qualified to handle your financial needs!
Qualifications Required to be a Financial Advisor Need?
You may have heard that you need specific qualifications, such as a degree or certification, to become a financial advisor. But what degrees and certifications do you actually need?
First, you need a Bachelor’s degree in accounting or a related field, like finance. This is essential if you want to become a CPA and be successful as a financial advisor. Besides this degree, other additional certifications may come in handy. These include:
- The Certified Financial Planner (CFP) designation is the most common additional certification for financial planners. It requires passing an exam and completing the coursework for investment planning, insurance, and estate planning.
- The Chartered Financial Analyst (CFA) designation is another certification that can give financial advisors more credibility. This requires completing three levels of exams covering topics such as investment analysis and portfolio management.
- The Accredited Investment Fiduciary (AIF) designation is another popular certification for financial advisors focusing on ethical practices when managing client investments.
What Other Steps or Requirements Are There for Becoming a Financial Advisor as a CPA?
Aside from the educational and licensing requirements mentioned, it would help if you considered a few other things when deciding whether to pursue this career path.
Most states require you to pass an ethics exam to become a financial advisor. This helps ensure that you understand the principles of financial planning and the code of ethics that CPAs require.
Continuing Education Requirements
It would be best to take classes regularly to keep your license up-to-date. This shows that you understand the most recent regulations and laws in finance and any changes in the industry itself.
Finally, many CPAs pursue professional designations such as Certified Financial Planner (CFP) or Certified Investment Management Analyst (CIMA) to stand out in financial advising. These designations require additional education and testing but can provide a great way to differentiate yourself from other advisors who have not taken this extra step.
It’s important for any CPA considering becoming a financial advisor to consider all these points before taking the plunge. The reality is that entering this field can be rewarding and challenging, so it’s important to be fully prepared for the journey ahead before embarking on it!
How Can CPAs Utilize Their Experience to Become Financial Advisors?
In short, yes—CPAs have a leg up when becoming a financial advisor. After all, accounting and finance go hand-in-hand, so CPAs already have experience in that field. But there’s more to the story than just having an accounting background. When considering becoming a financial advisor, CPAs can utilize their existing experience in the following ways:
CPAs are well-versed in the regulations that pertain to financial advisors and can use this knowledge to establish best practices and ethical standards when they advise clients.
Tax planning is one of the primary functions of a CPA, so they understand how to advise clients on how to maximize their returns and minimize payments due. This expertise is invaluable when helping clients decide on investments or retirement plans.
CPA backgrounds are perfect for analyzing and assessing risk regarding investments. This includes a basic understanding of financial instruments such as stocks, bonds, mutual funds, ETFs, and markets like forex and commodities. With this knowledge, advisors can help clients make informed decisions about their portfolio diversification and risk tolerance.
By leveraging their CPA backgrounds and the skills they’ve developed, CPAs can easily transition into becoming professional financial advisors. With the right resources, CPAs can confidently provide top-tier wealth management advice that keeps their client’s interests front and center.
How Can CPAs Maximize Careers as Financial Advisors?
If you’re a CPA and want to become a financial advisor, there are a few key things you need to know and do. Here are some tips on how to maximize your career potential as a financial advisor:
Learn the Language of Financial Planning
CPAs have an advantage when they transition into financial advising because they already understand the language of accounting. But if you want to take your expertise further, you’ll need to learn the language of financial planning. That means understanding investment products, retirement plans, and insurance policies—all things that CPAs wouldn’t typically come in contact with on the job.
It’s important for any professional seeking to transition careers to invest in networking opportunities. You’ll need to build relationships with other certified public accountants, financial professionals, and industry professionals who can offer insight or guidance. Many CPAs join organizations such as the Financial Planning Association or The National Association of Personal Financial Advisors for knowledge and network-building opportunities.
When it comes time to transition from CPA work into a full-time role as a financial planner or advisor, it’s smart to consider additional certifications. A Certified Financial Planner designation can help CPAs stand out from other applicants when applying for jobs in the new field—and could provide access to higher-paying positions than what they earned as CPAs alone.
By learning the language of financial planning, networking with other professionals, and acquiring additional certifications as needed, CPAs can transition easily into careers in financial advising and maximize their potential within this growing field.
How to Become a Certified Public Accountant
So, you might be wondering how to become a Certified Public Accountant (CPA). Well, there are some steps you’ll need to take to be eligible for the CPA Exam.
Becoming a CPA isn’t a piece of cake—there’s a lot of exploration and learning involved. So here’s what you’ll need:
- Earn a Bachelor’s Degree
Most states require aspiring CPAs to have completed 150 credit hours of college coursework, including specific required business-related classes before they can sit for the exam.
- Pass the Uniform CPA Exam
Once you’ve graduated with your degree and met any other educational requirements in your state, you can begin taking the exam. This rigorous exam covers four major areas: Auditing and Attestation (AUD), Business Environment and Concepts (BEC), Financial Accounting and Reporting (FAR), and Regulation (REG).
- Get Experience
Before becoming certified, many states will require one year or 2,000 hours — about one full-time year — of related experience in accounting or auditing under their supervision.
- Submit License Application
Once you pass the CPA Exam and complete the required amount of experience, you’ll need to apply for licensure in your state by paying a fee and submitting an application demonstrating that all requirements have been fulfilled.
Though it might seem intimidating at first glance, if you’re motivated enough to make it through these steps, then becoming a CPA is an incredibly valuable career goal—and ultimately sets you up for success as a financial advisor down the line.
How to Become a Financial Advisor
Have you ever considered becoming a financial advisor? You might think it’s only open to people with a finance degree, but CPAs can also become financial advisors!
Financial advisors provide advice on investments and help individuals and businesses manage their money. Becoming a financial advisor allows CPAs to combine their tax and accounting knowledge with financial planning to provide clients with holistic advice. So while the job will involve some of the same skills as being a CPA, it will also require new skills to offer comprehensive financial advice.
Here’s how you can become a financial advisor:
- Start by obtaining your securities license—you’ll likely need the Series 7 (General Securities Representative) or Series 6 (Investment Company Products/Variable Contracts Representative) license. You can take these exams online, and you’ll need to follow the guidelines for your home state and any other states where you wish to do business.
- Find an employer who offers training opportunities and is willing to help you get the necessary licenses needed for practice as a financial advisor; this could be either an independent firm or a larger brokerage house.
- Get certified as a Chartered Financial Analyst (CFA), Certified Public Accountant (CPA), or Certified Financial Planner (CFP). One of these certifications will give you even more credibility when providing comprehensive advice on investments and taxes tailored to your client’s needs.
Combining your CPA experience with additional training, such as obtaining securities licenses or certifications, is an excellent way to make yourself even more marketable as a professional financial advisor. It can open up an array of new opportunities.
Benefits of Being a CPA Financial Planner
A CPA financial planner is a financial specialist who has acquired a Certified Public Accountant (CPA) license and provides financial planning services to clients. Being a CPA financial planner comes with numerous benefits. Firstly, a CPA license is a valuable asset in the financial industry. It indicates that the CPA financial planner has undergone rigorous training and is qualified to provide clients with a broad range of financial services. Additionally, being a member of the American Institute of CPAs (AICPA) and other professional organizations, such as the Financial Planning Association (FPA), can provide access to a broad network of professionals, resources, and tools.
CPA financial planners are also well-equipped to provide their clients with comprehensive financial planning and investment advice. They deeply understand the tax implications of various financial decisions, which is vital when creating a financial plan that aligns with clients’ financial goals. CPA financial planners can help clients plan their finances, set realistic financial goals, and create a strategy to achieve them. They can also help with tax preparation and guide investment decisions.
In addition, CPA financial planners are also subject to regulation by the Financial Industry Regulatory Authority (FINRA) and other regulatory bodies. This ensures they adhere to their practice’s high ethical and professional standards. Moreover, they can become Certified Financial Planners (CFPs) by obtaining certification from the Certified Financial Planner Board of Standards (CFP Board). This certification adds to their credibility and demonstrates their expertise in the financial planning process. Overall, being a CPA financial planner provides the opportunity to offer a wide range of accounting services, business financial planning, and various financial planning and investment advice while providing clients with a clear financial picture.
You might be wondering: can a CPA become a financial advisor? Great question! Let’s have a closer look.
What is a CPA?
A Certified Public Accountant (CPA) is an accountant who has passed the CPA exam and holds a state license. CPAs can audit, do tax filing, and provide tax advice.
What is a Financial Advisor?
Financial advisors advise on investments, such as equities, bonds, and money markets. They also suggest strategies to save for retirement or college, manage debt and taxes, and other financial needs.
You may also be wondering: do CPAs make good financial advisors? In short, yes! A CPA’s overall understanding of finances, including taxes and investments, means that they are well-positioned to help clients strategize for their financial future.
Are Financial Advisor Fees Tax Deductible?
Check out our guide here to learn if your financial advisor fees are tax deductible for clients.
Ultimately, the decision about whether or not to become a financial advisor comes down to the individual—no hard and fast rules dictate who can or cannot do it. Becoming a financial advisor could be a lucrative, fulfilling career path for those CPAs with the perfect blend of patience and passion for helping people.
While there are definitely challenges if you have the qualifications and are willing to work hard, becoming a financial advisor could take your career to the next level. With the right skills, knowledge, and experience, a CPA can become a financial advisor and make a real difference in the lives of their clients.