Accountant vs. Financial Planner: Key Differences in Careers

Accountant vs. Financial Planning: An Overview

Accounting and financial planning provide rewarding and lucrative long-term career options. Accountants do audit work and financial forecasting, and they put together financial statements. Financial planners help individuals with wealth management and retirement planning. Both positions require educational credentials: CPA for accountants and CFP for financial planners. Both offer strong job growth and median incomes that are higher than the average across all fields. 

The accountant and financial planning profession are filled with individuals who are bright and motivated while being good with numbers. Interested parties should understand that they are quite different, however, despite both involving heavy doses of numbers and math.

What Does an Accountant Do?

An accountant records, summarizes, analyzes, and creates reports of financial transactions. Public accountants work for third-party firms auditing financial statements—a legal requirement for any publicly traded company. Internal accountants work for private companies and perform duties such as auditing, inventory accounting, and financial forecasting. Sales is not a part of the job, other than the process of selling oneself and services to potential clients.

What Are the Responsibilities of a Financial Planner?

A financial planner is a type of financial advisor who specializes in certain aspects of wealth management, such as tax planning, portfolio management, and retirement planning. While a financial planner must be good with numbers and possess a keen understanding of how the markets work, it is arguably more important to have strong sales and networking skills. Coming into the profession, one’s employer is not likely to hand over clients to manage. Financial planners are tasked with building a book of business on their own.

Key Differences Between Accountants and Financial Planners

Educational Requirements for Accountants and Financial Planners

Although neither career imposes specific academic requirements, most successful accountants and financial planners have at least a bachelor’s degree. For accountants, the only time a licensing board requires a certain level of education is when pursuing the certified public accountant (CPA) certification.

Becoming a CPA requires 150 hours of post-secondary education, which is more than a bachelor’s degree but does not necessarily entail completing a master’s degree. Otherwise, individual firms doing the hiring, not state or federal boards, set education requirements for accountants.

Individuals can become a financial planner without a bachelor’s degree, as long as they pass the requisite securities exams. However, financial planners often hold specific licenses and designations, the most common being that of a certified financial planner (CFP). A CFP must pass rigorous exams in multiple areas of wealth management and finances. Gaining the CFP designation requires completion of a bachelor’s degree from an accredited school.

Essential Skills for Success in Accounting and Financial Planning

Key accountant skills include being focused, detail-oriented, and adept with numbers. The work hours are long for the first few years of a public accountant’s career. Financial planners are first and foremost salespeople. Networking is an around-the-clock job for financial planners. Financial planners also tend to enjoy following the markets.

Comparing Starting Salaries in Accounting vs. Financial Planning

Pay structure marks a huge difference between accounting and financial planning. Accountants receive a straight salary. Bonuses, when applicable, are usually determined by the performance of the firm as a whole. Financial planners, by contrast, receive either a straight commission, charge flat or hourly fees, or receive a mix of commission and fees. It is very much a pay-for-performance career.

For accountants, the Big Four accounting firms—Ernst & Young, Deloitte, KPMG, and PricewaterhouseCoopers—typically pay entry-level CPA candidates between $56,000 and $67,000 the first year. Beyond the Big Four, starting salary varies greatly depending on the size of the firm, the scope of the job and the region of the country. First-year financial planners are usually offered a small salary or draw, usually between $44,000 and $65,000, as they built their business.

Job Outlook for Accountants and Financial Planners

While the Great Recession battered the financial industry, accounting and financial planning have strong job outlooks for 2019 and beyond. The Bureau of Labor Statistics forecasts a 7% growth for accountants and auditors between 2020 and 2030. The projected growth rate for personal financial advisors is 5% in the same period.

Work-Life Balance in Accounting and Financial Planning Careers

Expect a lot of hours your first few years, either as an accountant or financial planner. As an accountant, the busiest months are from January to April, with weekly work hours during those months being upwards of 60. For the remainder of the year, accounting offers a decent work-life balance, with 40-hour work weeks being the standard.

Most financial planners dedicate a lot of hours their first few years to finding and selling clients. This duty alone can push weekly hours worked to above 40. Developing strong word-of-mouth marketing can ease the hours worked significantly.

The Bottom Line

The choice between accounting and financial planning depends largely on personality. Both careers require mathematical proficiency and a strong work ethic. Financial planning probably isn’t a great career choice for those who hate sales, however. Accounting will likely come up short as a fulfilling career for those who aren’t keen on crunching numbers, preferring to interact with people instead.