Good with numbers? Enjoy interacting with people? Like to have a positive impact on others? Want to own your own business and gain financial independence? Have an interest in personal finance? A career as a CPA financial planner or Personal Financial Specialist may be right for you! Below you will find answers to some commonly asked questions about this unique career!
Why does being a CPA matter if one can go into personal financial planning without being a CPA?
The CPA has garnered the reputation of the most trusted advisor, and clients are more willing to work with a CPA as a recognized professional. CPAs bring objectivity to the financial planning process yet are still able to advocate on the client’s behalf as financial planners. Because of licensing requirements, CPA financial planners and Personal Financial Specialists (PFS) are required to have a broad base of knowledge, including an ethical component, which is more comprehensive and well-rounded compared to other types of financial planners.
What types of client cases might a CPA financial planner work on?
CPA financial planners and Personal Financial Specialists are in the unique position to build long-lasting relationships with clients, making a difference in their lives and getting to know them beyond the financial statements. They help clients navigate technical issues like tax consequences of property exchanges and retirement planning which can be stressful transactions or events for people. They coach clients and help them attain a satisfying quality of life, which goes beyond the numbers. Each day for a CPA financial planner is different and each client has a unique situation.
What are some specialty areas in the area of personal financial planning? How do you ensure a well-rounded financial plan?
Personal financial planning itself is a specialty area. As a young professional, you can focus on several areas of financial planning as a holistic planner to ensure a well-rounded plan for your clients. These areas include estate, retirement, income tax, risk management and investments.
How did you learn to be a CPA financial planner?
There are three components to gain competence in personal financial planning: education, experience and understanding the business. First, make an investment in yourself and your education. The AICPA PFP Section offers education opportunities in the form of PFS Exam Review Courses, self-study education, webcasts, and conferences. Second, gain the experience – do as many financial plans as possible. Work on developing your soft skills – listening is among the most important of these! Third, the best way to learn and understand the business is by engaging with CPAs who have been successful. A pre-conference day-long workshop is offered at the AICPA PFP Conference each year and focuses on the various business models that have worked for CPAs in financial planning.
Take advantage of networking opportunities in your state CPA society and the Advanced PFP Conference.
Is there coaching or are there courses that you can take to develop confidence when engaging with clients or prospects?
You can develop your confidence when engaging with clients, both in technical expertise and in soft skills. To develop your technical expertise, take advantage of PFS Exam Review Courses, self-study education, webcasts, and conferences. Many CPA financial planners find that the AICPA Advanced Personal Financial Planning Conference is very valuable in providing them with strategies and cutting-edge information to keep them on top of their game.
To develop your soft skills, volunteer to help those in your local community understand their personal finances through every stage of life via financial literacy efforts using materials made available through 360 degrees of Financial Literacy. Alternatively, hold a learning session for professionals in your office on a topic you are particularly passionate about – it not only shows initiative, but teaching is the best way to learn because you have to understand it first.
In addition, Forefield Advisor contains a library of customizable, high impact presentations written by CPAs and lawyers to help you build long-lasting relationships with clients, and find planning opportunities.
Learn more about media opportunities through being a spokesperson, available training at the AICPA Advanced Personal Financial Planning Conference and through your state CPA society.
How do you handle the stigma of being a new CPA financial planner who does not have years of experience?
The good news is that most clients do not consider age as an impediment to being a good CPA financial planner; it is more often our own CPA self-perception that age is correlated with experience and competence. But just in case you run into that one client, go the extra mile to dress, communicate and act in the highest professional manner. Demonstrate your energy and enthusiasm and be proactive in making yourself a better financial planner to then help your clients.
A good response to someone who says something like, “You’re so young, do you even know what you’re doing yet?” is to treat youth as an asset and advantage, replying politely with something like, “Don’t you want to work with someone for the next 30 years who won’t be retiring before you do and who is young and enthusiastic about the profession and building a career and can use the knowledge to best help you?”
Build rapport with your clients by saying, “I don’t know, but I’ll find out for you,” if you really don’t know the answer to a client’s question.
After getting an education in personal financial planning, where would you look for a position in a CPA firm using your PFP and investment skills?
There is no right path – it can be different for everyone. That’s what is so great about being a CPA financial planner, the infinite possibilities your career can follow. Stay connected and network not just with other financial planning professionals or CPAs, but with estate planning attorneys, insurance specialists, and any other expert you can think of working with on a client’s financial plan. Talk to people who are in the shoes you want to be in; CPA financial planners are willing to mentor and foster the future of their profession. And finally, don’t be afraid to go out on your own to start a practice if that is your dream.
I’m already a CPA with a number of years of experience in tax, what do I need to obtain the PFS credential?
To help you get started on the PFS credential, we have put together a series of pages to walk you through the requirements. We start with the examination qualifications. Often as you prepare for the examination, you will meet the education needs. After looking at the education requirements, we'll walk you through the experience qualifications. Click here to get started.
What is the difference between the CFP and the PFS? What are the benefits of having the PFS credential?
The PFS, unlike other certification programs, is awarded only to CPAs who are members of the AICPA. Accordingly, this credential represents the highest professional standards of any financial planning credential and sets the PFS credential holder apart from other financial planners. Becoming a PFS also means that you have access to all of the PFP Section member benefits plus additional opportunities as media spokespersons and the Business Development Toolkit.
My firm doesn’t support personal financial planning services, how do I gain the experience for the PFS credential if there is no one to teach me?
You can practice on friends and family, provide services to employees and partners of the firm, or even do mock financial plans for current client cases. Joining a study group may also afford you the opportunity to work on case studies with experienced financial planners. And finally, consider connecting with an outside advisor to develop a mentor relationship.
Where can I find more information on the CPA/PFS Program?
For more information, visit www.aicpa.org/PFP/PFS
I’m a CPA working in a tax department, what is the best way to approach tax clients about expanding services to include personal financial planning?
The tax return is a great spring board into financial planning services. The AICPA Advanced Personal Financial Planning Conference offers a session on how to develop planning opportunities from a tax return as well as how to approach clients with these opportunities. The conference also offers a day-long pre-conference workshop that helps CPAs add PFP to an existing practice.
I’m already a CPA and I have an interest in personal financial planning, but my experience is in audit or industry – not tax or related area of personal financial planning, what is the best way to transition careers?
Personal financial planning uses many of the skills you acquire as a CPA, but you must supplement that knowledge with learning opportunities related to personal financial planning. Transitioning to a new career of any kind has its rewards and obstacles. Follow your passion and put in the time to build a solid foundation of education and experience. And start saving money in case you decide to open your own practice one day!
One step in the right direction is to obtain the PFS credential. To help you get started, we have put together a series of pages to walk you thru requirements. We start with the examination qualifications. Often as you prepare for the examination, you will meet the education needs. After looking at the education requirements, we'll walk you through the experience qualifications. Click here to get started.
How much experience should you have as a CPA before you are considered a great financial planner?
There is no exact formula. A CPA could move into financial planning very early in their career and then focus on building their expertise in financial planning specifically. Others do this after many years as a CPA, having built a practice and then want to move in a new direction. If you feel it’s your calling, the sooner the better.
Are CPAs who provide personal financial planning services regulated by the SEC or other regulatory bodies? What is the best way to learn and comply with these regulatory requirements?
The short answer is, it depends. CPAs who are providing personal financial services (including tax, estate, retirement, investment and/or insurance planning) to their clients are in an optimal position to add investment advisory services to their business, but many CPAs do not enter into this line of business because they believe the regulatory issues are too complex to navigate. They could be governed by the SEC or by their state, but then there are definitions, exemptions and thresholds to consider. You can see how quickly the issue gains complexity. To give clarity, the Regulatory section of the PFP Practice Center can provide you with a broad overview of some of the issues you will face in this area.
What types of business models and fee structures exist for a CPA performing personal financial planning services?
CPA financial planners can provide services through a variety of business models – most CPAs choose to provide financial planning for an hourly or retainer fee and if crossing the line in terms of providing investment advice, register as an investment adviser and create an RIA (registered investment adviser entity) . Compensation models could be arranged as a fee-only, commission-only or a blend. You can find more information on business models in the PFP Practice Center.
Many planners say there is a large investment of time in each client. How do you balance client time with the compensation and how do you address the issue of scalability?
There can be a large investment of time for each client to provide personal financial planning services. In some practice models, you can manage investments and have a minimum size client that equates to a minimum fee in order to be compensated for the time spent on the clients. There are other practice models that may work as well. For example, if you establish a niche where clients have similar needs, you can leverage your technical knowledge across more clients and less time necessary to research. You can find more information on business models in the PFP Practice Center.
What are the advantages of providing personal financial planning services in metropolitan areas and rural areas?
One of the advantages of providing financial planning in a large city is the size of the potential client base; the down-side is that the market is probably saturated with personal financial planners. On the other hand, being a personal financial planner in smaller cities and towns means that there is less competition and the community probably needs a quality CPA financial planner to provide such services.
What are some common roadblocks that new professionals face as they try to develop a personal financial planning practice?
If you are already involved in tax, finding time during tax season to respond to client financial planning needs can be difficult. The opportunity exists to identify financial planning needs for these clients since you already have a trusted relationship by meeting their tax return needs. Much can be learned about financial planning needs from a client’s tax return. One way to overcome this obstacle is to gradually move from tax emphasis to financial planning emphasis while building your personal financial planning practice.
One of the benefits of becoming a PFP Section member is access to web events that tackle practice management issues, like these:
- From Tax Advisor to Wealth Management Advisor: The Road Best Traveled presented by Lyle Benson, CPA/PFS & Jerry Love, CPA/PFS
Also, the AICPA Advanced PFP Conference
offers a pre-conference day-long workshop each year that helps CPAs add PFP to their practice, including business models that have been successful and overcoming the obstacles along the way.
How do I gain experience in investments?
The AICPA Advanced Personal Financial Planning Conference has teamed up with IMCA, the Investment Management Consultants Association, and the CFA Institute, to present an investment management track at the conference. Additionally the PFP Section has teamed up with The American College and Kier to provide additional education opportunities in six areas of financial planning, including investments.
What are some useful websites or periodicals that I can use to stay abreast of personal financial planning issues?
The AICPA PFP Section has a number of publications that provide centralized and synthesized information on the most timely and relevant personal financial planning topics.
- The Planner: Archived issues of our award winning, bi-monthly, quick-read newsletter focusing entirely on PFP issues.
- PFP News: A weekly member communication providing you with exclusive access to upcoming events, regulatory updates, Forefield Advisor alerts and other valuable information related to the PFP Community.
- Inside Information from Bob Veres: A leading information source for the elite of the financial planning/financial services profession.
- Financial Planning Digest: An e-newsletter to update you on trends, news, legislation and events of interest to CPAs who practice in the areas of tax, estate, retirement, investments and insurance.Guidance on Roth IRA Conversions
- Stay up to date on current rules and regulations, critical topics and how to implement Roth conversions and recharacterizations into your planning.
- Forefield Advisor: A library of customizable, high impact presentations written by CPAs and lawyers to help you build long-lasting relationships with clients, and find planning opportunities.
- Wall Street Journal
Where can I get involved and expand my network?