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CMA vs CPA: A Guide to Financial Planning and Wealth Management Acronyms

CMA vs CPA: A Guide to Financial Planning and Wealth Management Acronyms

When you start looking into what certifications finance professionals have, you will inevitably run into a lot of acronyms, and it can get confusing. It’s hard sometimes to know what to look for or what makes one title different than the next. You may worry that you could miss out on something crucial if you are uncertain of the distinctions between terms. You may also ask yourself, do I have an advantage by picking a wealth advisor with one title over the next for my financial planning needs?

Finance professionals fill all sorts of job roles for different sets of tasks and responsibilities. This post will help break down what can seem like an alphabet soup of acronyms and describe what it means to look for a CMA vs a CPA vs a CFA, and will help you figure out which type of financial advisor will suit you best.

How do CMAs, CPAs, and CFAs differ?

CMAs

CMA means Certified Management Accountant. CMAs gain their certification after completing a set of requirements set forth by the IMA (Institute of Managerial Accountants). CMAs must:

  • Hold an active IMA membership
  • Complete and pass Parts 1 and 2 of the CMA Exam
  • Hold a bachelor’s degree from an accredited college/university
  • Abide by the IMA’s Statement of Ethical Professional Practice
  • Have two continuous years of professional experience in management accounting or financial management

The work doesn’t stop there. To keep the certification current, CMAs need to complete 30 hours of continuing education each year and pay annual dues. CMAs, as the name implies, prepare for a career in not only accounting but also in business management. The certification prepares CMAs to take on leadership roles in companies of all sizes and types. CMAs often become successful CFOs. CMAs usually want to fill account management roles in organizational oversight. With this certification, a person is well prepared to become a controller, treasurer, or board member.

CPAs

CPA means Certified Public Accountant. CPAs gain their certification after completing a set of requirements by the American Institute of Certified Public Accountants (AICPA) and the state in which they will practice accounting. They include:

  • 150 semester hours of college
  • Hold a bachelor’s degree from an accredited college/university
    • Some states require a degree in accounting, business, or finance in addition to some graduate-level coursework
  • Two years of working experience under the guidance of a CPA
  • Pass the 4-part CPA exam
  • Continuing education is required to renew your license

CPAs have training that enables them to fulfill specific regulatory tasks. However, CPAs also study financial accounting and are viewed as having the versatility needed to work in companies of all sizes and types. With professional experience, a CPA can crossover into many of the roles that CMAs hold. Professional auditors, tax attorneys, compliance officers, and CFOs all benefit from being CPA certified.

CFAs

CFA means Chartered Financial Analyst. CFAs gain their charter after having completed a set of requirements by the CFA Institute. These requirements  include:

  • Enrolling in the CFA Program and registering for an exam
  • Passing the Level 1 exam
  • Passing the Level 2 exam
  • Passing the Level 3 exam
  • Having four years of professional work experience in the investment decision-making process
  • Candidates must become members in order to obtain their charter

CFAs are different than the other two certifications mentioned here because of the 3-tiered approach to obtaining the CFA Charter. CFAs work in world investments. That can cover a wide range of roles in investment research, wealth management, and fund management.

Choosing the best type of financial planner for you

The CFA charter is a more challenging designation to obtain because of the 3-level exam program and, working directly in investment and market analysis, you must also have a strong grasp of accounting. CPAs and CMAs aren’t required to know securities and portfolio management at the level that CFAs must, though many are very competent in these matters nonetheless. Fund managers hire CFAs to develop new investment strategies, securities products, manage portfolios, and research financial markets. Once someone earns a CFA, they are well-suited to work in and advise on a wide range of domestic and global markets.

While each of these certifications makes for qualified financial planners and wealth advisors, experience is key to choosing between a CMA vs CPA. Pay attention to how long they have continuously worked in the industry and for a single company. If they are newer to the field, they must have a finance or accounting degree. Also, think about the scope of what you will need them to do. If you have a business or need auditing and tax work done, CPAs are perfect. In some cases, you may need a tax accountant, which should be a consideration. Other times, families are looking for a wealth advisor who can address multiple needs at once as a comprehensive plan. A reputable firm will be able to assess your specific needs and get you connected to a finance professional with expertise in the areas that you need.

SD Mayer knows that people need finance professionals with varying areas of expertise. Whatever your specific needs, we can help you connect with a wealth manager or advisor who has just the right combination of skills, certifications, and experience to help you meet all of your financial goals. Contact us today to get started.

Image Credit | PhuShutter | Shutterstock

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