This issue’s CPA/PFS Profile focuses on Dan Thomas, CPA/PFS, a partner at Thomas and Thomas in Newport Beach, California. As chair of the AICPA’s PFS Credential Committee, Dan sat down with Planner to talk about how the CPA/PFS helps influence the CPA financial planner’s work, how to reach more CPAs who want to hold the PFS credential, his investment philosophy and several other topics.
Planner: What kinds of focuses do you have in your firm with regard to financial and estate planning?
Dan Thomas: The core of my practice is offering holistic tax and financial and estate planning services to corporate executives and high net worth individuals and their families. Having been in practice for about 30 years, I have found that I enjoy service to these market segments the most, and over time, have steered my workload into these areas.
Planner: What is your investment philosophy?
Dan Thomas: A long-term perspective with prudence and protection of principal are fundamental values. I have always been a believer in the low cost, asset class investing approach espoused by investment managers such as Vanguard and Dimensional Funds. Low cost and asset diversification makes sense to me and can be backed up by academic research to support this approach.
I have seen many clients who are always chasing returns or making outsized bets on single stocks, either following a hunch or holding significant positions in their employer’s stock. In these situations, I always try to get the clients to keep their goals and objectives in focus and point out the risk assumed by such a position and the potential benefit derived from reducing that risk. They don’t always listen, but I enjoy being the voice of reason.
Planner: You’re the chair of the CPA/PFS Credential Committee. What are the committee’s goals for 2014?
Dan Thomas: The CPA/PFS Credential Committee has been well served by the outstanding leaders and committee members that have gone before us. Our five goals for 2014 are simple:
- We have to maintain and continuously update the infrastructure that has been previously established. All the essential components necessary for a CPA to embark on the path to earning the CPA/PFS credential are in place. We have a clearly defined pathway to earning the credential, quality education materials and courses, exam preparation and review materials and courses and a challenging but fair exam offered twice each year at regional testing centers throughout the country.
- We have to work hard to significantly grow the number of CPA/PFS credential holders. Current credential membership stands at about 5,000 CPAs. That number is significant and a proud accomplishment for our committee, but leaves much room for growth when put into the context of the number of AICPA members or the number of CPA practitioners who currently offer some form of personal financial planning services to their clients. Every one of these practitioners who dabbles in the financial planning arena is a prime candidate to pursue and earn the CPA/PFS credential. Current initiatives of the committee designed to foster growth of the credential include outreach to established CPA practitioners, young emerging CPA professionals, CPA candidates who have recently started their career and accounting students currently pursuing their college degrees.
- We have to make sure that CPA/PFS credential holders continue to derive significant benefits from membership above and beyond the distinction earned by holding the credential. PFP Section membership provides significant benefits to members, and additional benefits continue to unfold for the membership. One example of a current CPA/PFS benefit that is in the planning stages of improvement is an update to the current CPA/PFS referral directory website to improve search access to credential-holder information and promote the value a CPA/PFS credential holder provides for the general public. Our desire is for the updated site to be a source of continuing referrals to credential holders.
- Our committee efforts must be compatible with, and supportive of, the initiatives of the PFP Executive Committee. These two committees together support the incredible opportunity that CPAs have in providing financial planning services to their clients. The PFP Executive Committee addresses both current PFP planning and regulatory issues for our members and also helps CPAs understand how to incorporate PFP services into their practices, whether the CPA chooses to specialize in certain areas within PFP like tax and estate planning, provide comprehensive planning or offer wealth management services. The CPA/PFS Credential Committee’s initiatives provide a way for these CPA financial planners to demonstrate their expertise in these areas.
- We need to be forward-looking and forward-thinking to ensure we stay ahead of the curve with respect to the constantly evolving world of financial planning as it applies to the CPA/PFS credential and its members.
Planner: How do you think the CPA/PFS credential helps CPA financial planners excel in their work?
Dan Thomas: I find that CPA/PFS credential holders are generally very intelligent, hard-working individuals who are already very good at what they do. The credential doesn’t help those individuals excel at what they do, but it does enable them to distinguish themselves from other practitioners. The credential points out that they are part of an elite group of individuals who are uniquely qualified to provide holistic financial planning services to their clients, backed up by the experienced perspective and expertise of being a CPA. It also adds the validation and credibility of a highly respected third party, the AICPA, the largest professional body of CPAs, to their expertise.
I also find the fact that the CPA/PFS is not as well-known as some other marks is an outstanding opportunity for credential holders to personally explain the differences that distinguish themselves from others who operate in the financial planning field. It is how you use the credential in your client and prospect discussions that brings the most value.
Planner: What one motivating sentence would you say to a CPA who is considering the PFS credential but still hasn’t made up his or her mind?
Dan Thomas: Consider the future and be forward-looking about your career path. Although it has been around for a while, the CPA/PFS credential is still in its infancy and, like the CPA designation 100 years ago, has tremendous long-term potential benefit to those who pursue it. Cost in time and dollar terms is truly insignificant for the value derived from joining a select, elite group of practitioners. Take the leap of faith and join other credential holders in growing the CPA/PFS credential as the mark of distinction for CPA financial planners.
Planner: How do you market your firm’s services?
Dan Thomas: I don’t do any real marketing to the general public other than word-of-mouth referrals from existing clients and friends and benefits derived from the volunteer work that I do with the AICPA and the California Society of CPAs.
I have intentionally kept my practice small. I worked for many years with one of the Big 4 firms. It was extremely rewarding and enjoyable. At this stage of my life, I enjoy the freedom of working when and where I want. I still work just as hard as I did in my Big 4 days, but my schedule is more flexible. My son plays high school lacrosse, and his season runs from mid- February to May. Although it is tax season, I have never missed a game.
Planner: If you were stranded on a desert island with access to only one technology, what would it be and why?
Dan Thomas: Tough question. Other than a Wilson volleyball, I guess the most logical choice for me would be a fully charged satellite phone so I could call for help and be rescued. Although a little time away from civilization may sound nice, especially immediately before the start of tax season, I find that I am a more social person than not. The thought of being stranded for an extended period of time away from family, friends and the comforts of home is a bit scary.
Interested in Taking the PFS Exam?
There are two opportunities to take the PFS Exam in 2014 at numerous locations nationwide. PFP Section members can save $100 on the exam registration fee and save an additional 25 percent by registering for the early bird deadlines. Learn about discounts, sponsorships and more by visiting the PFS Credential Exam Registration website. Note that you may not be required to take the PFS exam if you have successfully passed another comprehensive financial planning exam.
Here are the dates for the exams and registration deadlines:
- Summer PFS Exam: June 19July 31, 2014. Exam registration deadline is June 12, 2014; early bird registration deadline is May 22, 2014.
- Fall/Winter 2014 PFS Exam: December 15, 2014Jan. 26, 2015. Exam registration deadline is December 8, 2014; early bird registration deadline is November 17, 2014.