Can Accountants Also Work as Financial Advisors?
Can Accountants Also Work as Financial Advisors?
CPAs and Financial Advisors are two varied career paths in different industries. While the accounting specialty focuses more on completing firm-side functions such as auditing, account analysis, and financial statement analysis, financial advisors focus more on client-side functions such as providing financial advice and assistance to clients in the estate planning, tax planning, and investment industries.
Putting all of these differences aside, Certified public accountants and financial advisors contain many intersections and similarities in their career paths and day-to-day responsibilities. Due to how diverse the accounting profession can be, Certified public accountants are well-equipped to take on the duties of a financial advisor. With various divisions making up an accounting firm, such as auditing, tax preparation, bookkeeping, and payroll services, among many other divisions, Certified public accountants have experience in a broad level of finances and can effectively advise clients on financial decisions in any sector. Accountants have similar education, necessary skills, and work experience needed to work as financial advisors.
Education
Both CPAs and financial advisors have a bachelor’s degree education in a related financial field, either in accounting, finance, or business. This education puts both CPAs and financial advisors on the same level in terms of broad financial knowledge.
Accountants must pass the Certified Public Accountant (CPA) designation. This challenging exam requires over 150 hours worth of post-secondary education and hours of preparation. This designation allows individuals to use the CPA title and become Certified Public Accountants . Individual firms may also set certain education requirements needed to pass in order to become a certified accountant for their firm. CPAs are able to obtain specialized knowledge by going through a rigorous education process that allows them to learn all of the rules and regulations surrounding finance and accounting.
While this level of accounting knowledge and experience is not entirely transferable to the financial advising profession, accountants can transfer to this career path, already knowing and understanding many of the concepts and regulations they would be seeing on a day-to-day basis. The skills and knowledge they are unfamiliar with or have yet to experience can be easily learned by using the expertise they already know. By tapping into the fast-absorbing educational framework, they have readily developed throughout their time studying for the CPA or throughout their working experience as an accountant, accountants can easily learn and pass tests needed to become a financial advisor.
In order to become a financial advisor, a CPA would need to pass the Series 65: Uniform Investment Adviser Law Examination, Series 7: General Securities Representative Examination (requires FINRA-member firm sponsorship), and Series 66: Uniform Combined State Law Examination. These exams are arguably as difficult as the CPA but contain transferable information that many accountants already have experience with or remember from their time studying for the CPA.
Skills
There are various traits, skills, and qualities that both accountants and financial advisors share. CPAs with good transferable skills in finance with numbers and metrics and are technologically knowledgeable, communicable, adaptable, problem-solving, and trustworthy contain all of the necessary qualities in order to succeed as a financial advisor.
Financial advisors are often considered to be financial salespeople. This means that having strong communication and people skills are just as important as the financial and accounting skills a financial advisor can have. Client networking and receiving client recommendations are both an around-the-clock job for financial advisors and a major means of receiving further work and responsibilities.
Certain technical skills can also be learned in order to provide an advantage in the transitioning and hiring process between a CPAs and a financial advisor. Skills such as organization, time management, critical thinking, active learning, analytical knowledge, mathematical analysis, and proficiency with Microsoft Office Suite and Applications could all be immensely useful to know as a financial advisor.
Work Experience
The work experience that certain accountants have, specifically bookkeeping accountants and tax-specialized accountants, is very similar to the role of a financial advisor. While clients may work for a public accounting firm, those who work for small businesses, or have their own individual practices, are the accountants with the most transferable experience and skills interchangeable with those of a financial advisor. An accountant who primarily assists clients with tax-related matters or an accountant who is responsible for the bookkeeping function or cash flow/expense management of an individual or business would be able to fit well into the financial advising role.
FAQs
Becoming a financial advisor or accountant typically requires at least a bachelor’s degree. An education in economics, finance, accounting, or business prepares professionals to pursue personal financial advisor jobs.
Accountants do financial forecasting, auditing work, and putting together financial statements, while financial planners help individuals with retirement planning and wealth management. Accountants are detail-oriented and good with numbers, while financial planners are better at networking and sales.
Advisers are primarily concerned with assisting with the growth of your business or personal finance, while accountants ensure all financing and investments are legal and sensible. There is a large degree of overlap between the two making it difficult to figure out which one you need.
Tax professionals can provide advice pertaining to tax regulations and potential tax consequences of certain investments; however, it is not in their legal or financial interest to provide investment advice as doing so falls outside of the scope of the services they provide.
A financial advisor can help an individual take advantage of new opportunities and help build a solid roadmap for an individual’s business or personal finances. However, it may be worth hiring an accountant if an individual is looking for help with tax compliance, tax filing, and other administrative tasks.
Accountants specializing in the laws, rules, and regulations required in the preparation and calculation of state, federal, and local taxes are typically known as tax accountants. Tax accountants provide a wide range of tax-related services to both businesses and individuals, which can include filing and preparing tax returns. Tax accountants are more concerned with making sure an individual’s taxes are compliant with tax laws and regulations and will give you advice about how to change or improve your tax status. An accountant, on the other hand, is your strategist. They assist in helping an individual or their business pay less tax.
- American Institute of CPAs. “Getting Started.” https://us.aicpa.org/becomeacpa/gettingstarted.html
- American Institute of CPAs. “150 Hour Requirement for Obtaining a CPA License.”. Accessible From: https://us.aicpa.org/becomeacpa/licensure/requirements
- CFP Board. “The Certification Process.”. Accessible From: https://www.cfp.net/get-certified/certification-process
- Payscale. “Average Financial Planner Salary.”. Accessible From: https://www.payscale.com/research/US/Job=Financial_Planner/Salary
- U.S. Bureau of Labor Statistics. “Accountants and Auditors.”. Accessible From: https://www.bls.gov/ooh/business-and-financial/accountants-and-auditors.htm
- U.S. Bureau of Labor Statistics. “Personal Financial Advisors.”. Accessible From: https://www.bls.gov/ooh/business-and-financial/personal-financial-advisors.htm
