CPA vs. Financial Advisor: Which Do You Need?

A certified public accountant (CPA) focuses on taxes, offering services like preparation, filing and tax strategy guidance. A financial advisor, by comparison, typically specializes in financial planning and investment management, which can include tax planning as well. Some financial advisors may also hold a CPA designation, but their primary role is helping clients grow and manage wealth. Ultimately, choosing between a CPA and a financial advisor depends on the type of services you need. In some cases, working with both can provide comprehensive support for your overall financial life.

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What Is a Certified Public Accountant (CPA)?

CPAs are accounting professionals who have earned the designation of certified public accountant through a combination of expanded education, experience and state licensing. They often provide tax services along with advanced accounting and some financial planning specific to taxation.

CPAs have attestation powers and can perform auditing functions, with the ability to represent you in front of the IRS if you are audited. For businesses, CPAs provide bookkeeping, financial reporting, payroll, expanded taxation and auditing services. They can help companies manage their money, taxes and investments in accordance with laws and regulations.

Qualifications for the CPA Designation

The Association of International Certified Public Accountants (AICPA) sets the standards and qualifications for the CPA professional designation. Each state has a Board of Accountancy that determines the specific standards for the state.

In general, you must have 150 extra hours of either undergraduate or graduate education to become a CPA. Six months to two years of experience working in public accounting, depending on the state you live in, is also necessary

After gaining the requisite education and experience, you must sit for a four-part exam. Each part requires four hours to complete. The four parts of the CPA exam are attestation and auditing, financial accounting and reporting, regulation and business environment and concepts. You typically must pass all four parts of the exam within a 30-month period to earn the CPA designation.

Additionally, CPAs have to complete 40 hours of continuing education requirements each year. They also must conform to strict ethics requirements as stated by the AICPA.

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What Is a Financial Advisor?

Financial advisors assist individuals with investment planning and management. Many of them can also help with financial planning and wealth management. Financial planning tasks can include debt payoff, saving and investing, retirement planning and estate planning.

It’s possible for financial advisors to have a number of different specialties, or they can be generalists. Some financial advisors have apprenticed at investment firms and gained their education and experience in that way. Usually, a financial advisor will have a degree in finance or a related subject from a four-year college or university.

In addition, advisors may have one of the professional certifications for financial advisors. These range from a more general certification, like the professional certification of Certified Financial Planner™ (CFP®), to more specific certifications focusing on a particular area of financial planning or investing.

Some, but not all, financial advisors are legally required to act as fiduciaries. Advisors who are registered investment advisers (RIAs) must follow a fiduciary standard. Under this standard, they have a legal obligation to put their clients’ interests ahead of their own.

Advisors who receive commissions from product sales are typically not held to a fiduciary standard under federal law, even if they claim to act in a client’s best interest. Additionally, advisors who hold professional designations may be subject to ethical codes set by the organizations that issue those credentials. Those standards are separate from legal fiduciary obligations and do not carry the same regulatory enforcement.

Licensing for Financial Advisors

The specific license a financial advisor needs depends on which of the two business models above they operate under: commission-based brokerage or fee-based advisory.

Advisors who work as brokers, selling securities for a commission at a broker-dealer, typically need the Series 7 license. This license allows them to sell most types of securities. They’ll also need the Series 63, the state-level license required to conduct securities business in a specific state. The Financial Industry Regulatory Authority (FINRA), a non-governmental organization that protects investors, oversees both of these exams.

Advisors who instead operate as fee-based fiduciaries, providing investment advice for a fee rather than selling products for commission, typically need the Series 65 license instead. Administered by FINRA but developed by the North American Securities Administrators Association (NASAA), the Series 65 qualifies someone as an Investment Adviser Representative (IAR). It requires no co-requisite exams or firm sponsorship.

Some advisors who want the ability to both sell securities and provide fee-based advice pursue the Series 66. This license combines the state-law content of the Series 63 with the advisory content of the Series 65, but it requires the Series 7 as well.

This distinction matters directly for the fiduciary question raised above. An advisor with only Series 7 and Series 63 licenses is generally operating as a commission-based broker. They are not held to a fiduciary standard. Meanwhile, an advisor holding a Series 65 (or Series 66 paired with a Series 7) is typically a fiduciary investment advisor representative.

CPA vs. Financial Advisor: Which Do You Need?

A CPA typically makes sense when the primary issue involves tax reporting, compliance or accounting mechanics. This includes preparing individual or business tax returns, responding to IRS notices, handling audits, calculating estimated payments or managing multi-state filings. For example, a small business owner with employees, depreciation schedules and quarterly payroll filings may turn to a CPA to manage filings and keep records aligned with tax law.

People also commonly use CPAs during discrete financial events that trigger complex tax consequences. Selling a rental property, receiving partnership income, exercising incentive stock options or inheriting assets with mixed cost bases often requires tax calculations and reporting decisions. In these cases, the CPA’s role centers on filing accuracy, the timing of income recognition and compliance with IRS rules.

A financial advisor, on the other hand, is helpful when decisions involve allocation of assets, savings strategies and long-term income planning. This can include portfolio construction, retirement contribution strategy, withdrawal sequencing and coordination of multiple accounts. For example, a household deciding how much to save in a 401(k) versus a Roth IRA, or how to invest a lump sum from a bonus or inheritance, could benefit from working with a financial advisor.

Financial advisors also play a central role in ongoing planning, as opposed to event-based work. A client approaching retirement may need projections for future income, modeling of market scenarios and coordination between taxable and tax-advantaged accounts. These services extend beyond tax filing and focus on the client holds and uses their money over time.

CPA vs. Financial Advisor: When Can You Use Both?

Many financial decisions create both tax consequences and long-term planning effects, which is where CPAs and financial advisors often overlap. Retirement planning is a common example. A CPA may calculate the tax impact of required minimum distributions or a Roth conversion in a given year. Meanwhile, a financial advisor could evaluate how those choices affect future income and portfolio balance.

Consider a couple in their early 60s planning to retire within five years. A CPA can project how claiming Social Security at different ages affects taxable income and Medicare premium thresholds. A financial advisor can then integrate that information into a broader plan that coordinates portfolio withdrawals, cash reserves and investment risk.

Business owners also frequently benefit from using both types of professionals. When selling a closely held business, a CPA may structure the transaction to allocate proceeds between ordinary income and capital gains. A financial advisor can then help determine how to invest, distribute or set aside the sale proceeds for future income needs.

Estate and legacy planning often involves both roles as well. A financial advisor may outline how assets are titled, which accounts pass to beneficiaries and how trusts fit into a broader plan. A CPA can then confirm the reporting requirements for those transfers, whether gift or estate taxes apply and how beneficiaries report inherited income. Used together, each professional addresses a separate part of the same financial decision without duplicating responsibilities.

Bottom Line

A man deciding which services he needs from a CPA and an advisor.

Financial advisors and CPAs serve different purposes when managing your finances. A CPA is a certified professional specializing in tax-related services, such as preparation, filing and strategy. A financial advisors, comparatively, focuses on investment management and broader financial planning. Deciding between them depends on your specific needs. Working with both can provide complementary expertise to help you manage taxes, investments and overall financial strategy.

Tips For Handling Your Money

Financial planning isn’t easy on your own, and a financial advisor may be able to help. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area. From there, you can have a free introductory call with your advisor matches to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Investing is a key part of properly handling your money, and SmartAsset wants to make sure you have the right resources at your disposal to answer your questions. Are you worried about capital gains taxes on your stocks if you need to sell? Try using SmartAsset’s capital gains calculator to see what impact taxation in your area will have.