| Nine Practice Areas of the PFS Body of Knowledge |
1. Personal Financial Planning Process and Fundamentals of Financial Planning
- Helping clients establish their financial goals
- Reviewing income and spending patterns; developing recommendations for cash flow management and budgeting
- Performing “time value of money” calculations for decisions such as refinancing a home or buying vs. leasing a motor vehicle
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2. Income Tax Planning
- Advising clients regarding federal and state income tax consequences of their financial decisions
- Helping clients split income among family members through use of family partnerships, employment arrangements, gifts and trusts, installment sales, etc.
- Advising clients on issues related to personal decisions, such as marriage or divorce (e.g., property settlements, retirement plan asset division, alimony, child support)
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3. Insurance Planning
- Analyzing client exposure to risks and recommending methods for managing risk
- Advising clients on various types and uses of life insurance
- Helping clients minimize their financial risks from disability, illness, property damage, and personal and professional liability
- Planning for long-term health care for clients and their families
- Reviewing proposed policies to ensure clients’ needs are satisfied
- Reviewing income and estate tax aspects of insurance coverage with clients
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4. Investment Planning
- Year-end capital gain/loss recognition planning; deferral of capital gain strategies
- Reviewing client investment preferences and risk tolerance to help them develop appropriate investment strategies
- Discussing available investment options with clients
- Monitoring the performance of invested assets
- Providing asset allocation recommendations
- Recommending investments or helping clients build portfolios
- Managing client assets
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5. Financial Independence (Retirement Planning)
- Helping clients develop or refine retirement planning goals; determining cash requirements to realize those goals
- Calculating savings needed to meet retirement cash requirements and analyzing available retirement plans
- Reviewing limits on and tax consequences of contributions to or distributions from retirement plans
- Establishing retirement plans
- Planning for retirement plan withdrawals
- Assisting clients with maximizing their Social Security benefits
- Planning for post-retirement succession of a closely held business
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6. Employee Benefits
- Evaluating or reviewing various benefits (equity, fringe, insurance) available to employees of public and private companies
- Evaluating the implications of strategies for timing exercise and sale of equity employee benefits
- Examining tax implications of benefits for employer and employees
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7. Performance Management
- Helping clients develop or refine their financial and personal estate planning goals
- Estimating liabilities for federal estate tax, state death taxes and other obligations; determining cash needs upon death
- Developing recommendations to meet financial obligations upon death
- Reviewing tax and probate considerations of various forms of property ownership; making recommendations on the titling of assets
- Developing strategies for minimizing estate and death taxes and achieving the clients’ other estate-planning goals
- Recommending or reviewing various instruments (e.g., wills, powers of attorney, trusts) for use in achieving goals
- Planning for post-mortem succession of a closely held business (e.g., buy-sell agreements, estate freeze techniques, valuation issues)
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8. Charitable Planning
- Evaluating clients assets to use for charitable giving
- Determining the advantages and disadvantages of charitable giving through different vehicles (e.g., conservation easements, charitable trusts, life insurance)
- Summarizing income tax consequences of various charitable giving options
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9. Special Needs
- Defining clients' housing goals
- Evaluating cost of education and educational options
- Planning income needs and evaluating division of assets during a divorce
- Recognizing business liability exposure for business owners
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