Adding credentials is generally a great career move. Those letters after your name prove expertise in a given area without you having to say a word and offer greater career mobility and earning potential. But before you go adding credentials all willy-nilly, it's important to make sure you're choosing the right option based on your career goals. If you're a financial advisor or planner wanting to highlight expertise in retirement plans, the Certified Plan Fiduciary Advisor designation may look good, but it may not be the right option, depending on your goals. To help you weigh the best next step, we're looking at the CPFA vs CFP® certification, including what each one covers and the pros and cons.
First, let's look at what each credential is and who they are for.
CPFA stands for Certified Plan Fiduciary Advisor. It's a retirement plan-focused credential for advisors who work as fiduciaries to employer-sponsored plans like 401(k)s, showing expertise in fiduciary duties, ERISA rules, and day-to-day management of workplace retirement plans. This designation is issued by the National Association of Plan Advisors (NAPA), which is part of the American Retirement Association (ARA) umbrella.
Let's get a little more specific, though. This certifies that an advisor can step into an ERISA §3(21) co-fiduciary or §3(38) discretionary role for employer-sponsored retirement plans—primarily 401(k)s and 403(b)s. In plain English, a CPFA can tell a plan committee what to do (co-fiduciary) or actually do it for them (discretionary manager) while wearing the legal liability that comes with the job. Think of it as the retirement-plan cousin to a CFA®’s portfolio-management depth or a CPA’s audit sign-off: narrow scope, very high accountability. Having a CPFA credential has become table-stakes for many Registered Investment Advisor (RIA) and record-keeper consulting teams because plan sponsors increasingly want proof that their advisor knows the Employee Retirement Income Security Act (ERISA) inside-out.
The CPFA opens up the 401(k) channel, but it doesn't replace broad-based planning credentials, like having a CFP® certification.
The CFP® certification is awarded by CFP Board to those individuals who show expertise in all areas in financial planning after meeting strict requirements in education and experience and passing the comprehensive exam. Earning your marks shows that you do more than crunch numbers. You work closely with your clients to create personalized financial strategies for their investments, taxes, retirement, insurance, and estate management.
More specifically, the certification signals that anindividual can deliver holistic, fiduciary advice across the entirepersonal balance sheet—cash-flow, tax, investments, insurance, retirement andestate—using the Board’s seven-step financial-planning process. Unlike the CPFA(Certified Plan Fiduciary Adviser), which is scoped narrowly toemployer-sponsored DC plans, CFP® is positioned as a comprehensiveconsumer credential that spans both retail and small-business owner needs.
Where the CPFA is narrow in scope, the CFP® certification is broad in what it encompasses.
Learn more: Everything You Need to Know About CFP® Certification
Okay, now that you know what each credential is, how do you earn them? Both require education and passing an exam, but even in these two areas, they're pretty different.
The CPFA has a low bar of entry, with no prior license, degree, or experience required, so once you decide to go for this certification, you will need to complete the following:
Once you earn your credential you need to renew it annually and complete 10 continuing education hours each year.
To earn your marks, you need to pass the CFP® requirements, known as "the 4 E's:"
When you're weighing between CPFA vs CFP® certifications, consider that while the requirements to become a CFP® Professional are more challenging, it's because you learn so much more information and have a greater fiduciary duty beyond retirement accounts.
Advisors already servicing—or aiming to service—qualified plans (401(k), 403(b), 457) and pooled employer plans (PEPs)
CFP® professionals who make rollover recommendations and therefore trigger a fiduciary comparison between the plan and an IRA
Career-changers with institutional sales backgrounds moving into RIA retirement-plan consulting
Entry-level analysts at record-keepers or TPA firms who want a credential without any experience prerequisite
If you're on the fence between CPFA vs CFP®, a theme repeats: broad competency is the prerequisite to specialized credibility. As a practicing CFP® professional, you'll have the broader context to better evaluate retirement options and provide more personalized solutions that fit into a financial plan as a whole, rather than a separate piece. Plus, you'll have greater insight into all areas of financial planning, making this a more versatile credential that is highly respected and sought-after in the financial services profession by employers and clients alike!
The final recommendation: Get the broad certification first, then layer niches through more specialized credentials.
Download our FREE ebook, Become a CFP® Professional with BIF, and get an in-depth look at how to earn your marks, the benefits of doing so, and how BIF can help you reach your goals in less than a year!