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  • Writer's pictureMarcus P. Miller, CFP®

Understanding the Difference between a CPA and a CFP

When it comes to managing your finances, it can be confusing to navigate the various fields of financial professionals, including Certified Public Accountants (CPAs) and Certified Financial Planners (CFPs). Both play critical roles in managing your financial wellbeing with distinct yet sometimes overlapping responsibilities. Understanding these differences is crucial. In this blog post, we explore the unique roles of a CPA and a CFP and how they collaboratively serve families.

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Certified Public Accountants (CPAs) are licensed professionals specializing in accounting and tax-related matters. They handle tasks such as financial record-keeping, tax return preparation, and financial advice to individuals and businesses. Conversely, Certified Financial Planners (CFPs) focus more extensively on investment and financial planning. Their specialization includes retirement planning, estate planning, risk management, insurance, investment management, and to some extent, tax planning.

What does a CPA do?

CPAs offer a broad scope of financial services, including bookkeeping, financial statement preparation, tax preparation, financial planning, and business advisory services. They adhere to specific ethical standards and must pass a stringent exam covering a wide range of accounting aspects such as auditing, financial accounting, and tax planning.

What does a CFP do?

CFPs focus on the comprehensive financial planning process, encompassing the analysis of assets and liabilities, setting financial goals, and developing and implementing a plan to reach these goals. They complete a series of courses covering financial planning topics such as risk management, investment planning, tax planning, and estate planning. So, while CPAs primarily handle tax matters, CFPs also possess knowledge in tax planning as part of a broader financial plan.

How do CPAs and CFPs work together to serve families?

While CPAs and CFPs have different specializations, they can collaborate to provide families with holistic financial services. For instance, a CPA can assist with tax planning and preparation, while a CFP can create a tailored investment strategy that aligns with the client's financial goals. By working together, these professionals can build a comprehensive financial plan addressing all aspects of a family's financial well-being.

Choosing the right professional for your needs

Choosing the right financial professional relies on your specific financial needs. If you require help with tax planning or preparation, a CPA would be the appropriate choice. For comprehensive financial planning services, including investment management, estate planning, insurance, and tax planning within the wider context of your financial plan, a CFP would be a better fit. In some cases, consulting both professionals can provide a holistic plan that meets your financial goals.

When it comes to understanding the differences and similarities between a CPA and a CFP, it's really important. It helps you find the right person to approach for financial guidance. By working with both professionals, you can ensure that all aspects of your financial well-being are taken care of, giving you peace of mind and setting you up for a successful financial future.

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The opinions expressed in this website are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security. We cannot provide financial advice if we do not know your specific financial situation. Please talk to your financial advisor or do your own research before making financial decisions. The views reflected in the commentary are subject to change at any time without notice. Nothing on this website constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Any indices referenced for comparison are unmanaged and cannot be invested into directly. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.

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