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 also include tax planning. Some financial advisors may also hold a CPA designation, but their primary role is helping clients grow and manage wealth. Choosing between a CPA and a financial advisor depends on the type of services that you need, and 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 sets 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 requiring 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 must pass all four parts of the exam within an 18-month period to earn the CPA designation. Additionally, CPAs have to complete 40 hours of continuing education requirements each year and 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 assist 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, meaning they are legally obligated 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, but those standards are separate from legal fiduciary obligations and do not carry the same regulatory enforcement.

Licensing for Financial Advisors

Financial advisors can only give investment advice or trade financial assets on an investor’s behalf if they are licensed and have passed the Series 7 and Series 63 exams. The Financial Industry Regulatory Authority (FINRA), a non-governmental organization that protects investors, oversees both of these exams.

The Series 7 license legally allows brokers to sell most types of securities, excluding real estate, commodities futures and life insurance. This is a necessary first step for many careers in the financial industry.

The Series 63, by comparison, is the individual state license for the state in which the advisor works. This is required to sell securities and conduct business within a specific state.

CPA vs. Financial Advisor: Which Do You Need?

A CPA is typically used 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 would rely on a CPA to manage filings and keep records aligned with tax law.

CPAs are also commonly used 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, timing of income recognition and compliance with IRS rules.

A financial advisor is typically used when decisions involve allocation of assets, savings strategy and long-term income planning. This includes 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, would usually work with a financial advisor.

Financial advisors also play a central role in ongoing planning rather than 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 how money is positioned and used 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, while a financial advisor evaluates 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 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 sale proceeds are invested, distributed or reserved 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 how those transfers are reported, 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, though 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, and you can have a free introductory call with your advisor matches to decide which one you feel 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.