Best Accounting and Finance Certifications
Earning an accounting or finance certification to improve your employability and advance your career: CPA, ACCA, CMA, CFA, FRM, CAIA, CFP
Accounting Certifications
Certified Public Accountant (CPA) License
The Certified Public Accountant (CPA) is a license for one who wants to practice accounting in the United States. As the requirements of obtaining the license vary by state, the information provided in this article is just a general step for earning the CPA designation.
In general, a candidate needs to complete 150 hours of coursework from an accredited university or college first. As this is just recommended by the American Institute of Certified Public Accountants (AICPA), the education requirements will vary by state. Next, the candidate will need to pass the Uniform CPA Examination that is set by the AICPA. The exam consists of 4 parts with a pass rate of 49.7% for the Auditing and Attestation section, 62.84% for the Business Environment and Concepts section, 44.7% for the Financial Accounting and Reporting section, and 59.03% for the Regulation section. Last but not least, there is the work experience requirement which is varied by the state again. Typically, it is 1 to 2 years. After earning the licenses, the CPAs are required to complete 40 hours of continuing professional education (CPE) each year to renew their licenses.
Currently, the AICPA has 431,000 members, which is the largest CPA association in the United States. According to PayScale, the average salary for CPAs in the U.S.A. is $88,000 per year. Although the CPA is an accounting license and designation, many CPAs work in finance-related jobs. This shows the merit of CPA designation.
Association of Chartered Certified Accountant (ACCA) Certification
ACCA is recognized by UK Royal Charter since 1974. If you want to work in countries such as the United Kingdom and Singapore, you may want to consider earning the ACCA designation instead of the CPA license.
The ACCA certification consists of 13 exams in 3 categories, namely applied knowledge, applied skills, and strategic professional exams. The pass rates for exams are varied between 32% to 88%. For strategic professional exams, they are usually more difficult than the applied knowledge exams and applied skills exams. The low pass rates for some exams indicate the difficulty of completing the study for the ACCA certification. The exam fees are varied between countries. Based on estimation, the exam and annual subscription fees will cost around £3,220 to £5,710. In addition, the candidate will need to complete 3 years of work experience to earn the ACCA designation. Therefore, it will take 3 to 4 years for one to complete the ACCA certification. After earning the designation, the ACCA certification holders are required to renew their membership by paying a fee of £112 and completing 40 CPD units each year.
Currently, among 769,000 members across 178 countries, there are 233,000 members, who have attained their qualifications. The average salary for ACCA holders in the U.S.A. is about $79,000 per year based on the data provided by PayScale.
Certified Management Accountant (CMA®) Certification
The CMA certification is administered by the Institute of Management Accountants (IMA). Unlike CPA, the CMA certification is not mandatory for one to practice accounting in the United States. Thus, it has much fewer members as compared to the AICPA. However, some CPAs hold both CPA and CMA designations. According to the IMA website, there are about 70,000 CMA certification holders. In terms of the average salary, it is around $93,000 per year in the U.S.A. based on PayScale’s data.
In order to earn the CMA designation, one will need to fulfill its education, exam, and work experience requirements. If the candidate has a bachelor’s degree or professional accounting certification, he or she has fulfilled the education requirement. For CMA certification, it has only 1 exam with 2 parts. With a historical pass rate of 50%, this shows that it is not easy to pass the exam. The exam tests on areas such as financial statement analysis, financial planning, corporate finance, cost management, performance management, internal control, decision analysis, etc. The total study time is about 300 to 340 hours based on estimation. In addition, the candidate will need to have 2 years of work experience to earn the designation. Last but not least, the CMA certification holders are required to renew their membership by paying $245 and completing 30 CPE hours every year to keep their CMA designation.
Finance Certifications
Chartered Financial Analyst (CFA®) Certification
The CFA program has a high reputation in the finance industry. Many top-tier banks, asset management firms, and private equity firms require candidates to earn the CFA designation as a requirement for hiring or career advancement.
The reason for having such a high reputation is mainly due to its exam difficulty and low pass rates with 42% for the Level 1 exam, 45% for the Level 2 exam, and 54% for the Level 3 exam. Another reason is due to its exams have covered a wide range of topics which include quantitative methods, economics, financial reporting and analysis, corporate finance, equity investment, fixed income, derivatives, alternative investment, portfolio management, and wealth planning. As a wide range of financial instruments and investment knowledge will be tested, a candidate will typically need to spend 900 hours to study the CFA program and pay a minimum of $2,550 as enrollment and examination fees. Furthermore, it requires candidates to complete 4,000 hours of work experience in at least 3 years to earn the CFA charter designation. After earning the designation, candidates are required to renew their membership by paying $275 annually to maintain their CFA charter designation.
Although it is so difficult to earn the CFA charter designation, there are still many enrollments every year. As the result, it has 178,000 members. It is not hard to guess the reason, which the CFA program provides candidates an opportunity to land a high-paying finance role such as investment analyst, research analyst, and portfolio manager. Based on PayScale’s data, the CFA designation holder earns an average of $96,000 per year in the U.S.A.
Financial Risk Manager (FRM®) Certification
If you want to pursue a financial risk-related career, you may want to consider earning the FRM designation. The FRM certification is provided by the Global Association of Risk Professionals (GARP). Its curriculum focuses on topics such as quantitative analysis, valuation, market risk, credit risk, treasury risk, and operational risk. This can be translated into an average study time of 240 hours.
The FRM registrations are increasing every year, which shows that it is gaining popularity among professionals and employers. Based on the registration statistics, it is more popular in Asia followed by America and Europe. However, it is not easy to earn the FRM designation, which is proved by its low pass rate of 45% for the Part 1 exam and 59% for the Part 2 exam. The enrollment and exam fees cost a total of $1,500 to $1,900 depending on the registration period. Moreover, candidates need to demonstrate that they have 2 years of financial risk-related professional experience to obtain the FRM designation. If candidates want to maintain their designation, they will need to complete 40 CPD credits every 2 years.
By completing the FRM certification, candidates have a higher chance of landing the risk manager role. According to PayScale, the average salary for people in the U.S.A., who have completed the FRM certification is around $102,000 per year. Lastly, there are about 62,243 certified FRMs among 263,000 GARP members in the world.
Chartered Alternative Investment Analyst (CAIA®) Certification
Private equity and hedge fund are being considered high-paying finance jobs. You can demonstrate your knowledge and expertise in these areas by completing the CAIA certification, which is administered by the Chartered Alternative Investment Analyst Association.
For the CAIA certification, its curriculum covers topics such as structured products, hedge funds, private equity, real estate, commodity, modeling, valuation, risk management, and due diligence. Regarding the exams, there are 2 levels with a total exam cost of $2,700 which includes the enrollment fee. According to an article published on the eFinancialCareers website, the Level 1 exam has a pass rate of 54%, whereas the Level 2 exam has 69%. It is estimated that a candidate needs to spend 200 hours studying for each exam of the CAIA certification. Although there is no continuing education requirement, an annual membership is needed by paying $350 to gain and maintain the CAIA designation.
After earning the CAIA designation, the possible job opportunities include, but are not limited to, the analyst, portfolio manager, asset allocator, and trader. However, there are only 12,000 CAIA charterholders, which means their professional network is much smaller than other finance certification programs. Based on the data provided by PayScale, the average salary for one in the U.S.A., who has completed the CAIA certification is around $101,000 per year.
Certified Financial Planner (CFP®) Certification
The CFP certification from the United States is managed by the Certified Financial Planner Board of Standards (CFP Board). For the CFP certification from outside of the United States, it is managed by Financial Planning Standards Board Ltd. (FPSB). The information provided in this article is about the CFP certification that is managed by CFP Board.
For the CFP certification, its content focuses on personal financial planning. This includes, but is not limited to, tax, retirement, insurance, estate, and investment planning. The CFP certification has only 1 exam with a historical pass rate of 67%. For the exam fee, it is $825 for early bird registration and $925 for standard registration. Besides meeting the education requirement, candidates are required to have 6,000 hours of financial planning-related work experience to obtain the CFP designation. If a candidate chooses the apprenticeship route, only 4,000 hours of experience is required. After earning the designation, the CFP professionals are required to renew their certification once every 2 years. The renewal requirements include completing 30 hours of continuing education and paying an annual certification fee.
The typical career paths for CFP professionals are financial planners, client service consultants, and wealth management consultants. In the United States, the number of CFP professionals is 90,733. In terms of the average salary for CFP professionals in the U.S.A., it is about $71,000 per year according to PayScale.
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