Membership

PFP Body of Knowledge 


The Personal Financial Planning (PFP) Body of Knowledge (BOK) is an outline of the technical knowledge that a CPA financial planner should be expected to know to competently practice in personal financial planning.

The complete PFP Body of Knowledge outline can be downloaded as a PDF document .

For CPAs practicing or desiring to practice in personal financial planning:  It provides a roadmap for the various technical competencies that can guide their professional development.  We recognize that not all CPAs planners will be experts in all areas, but this outlines the areas in which a fundamental level of knowledge and awareness of the interconnectedness of the major topics is crucial for making competent recommendations.

For CPAs preparing for the Personal Financial Specialist (PFS) exam:  It provides a guide for exam takers to ensure they are studying appropriate topics for the PFS exam. The range of coverage (percent of total exam) is identified for each major topic in the BOK so exam takers know what to expect. They can have confidence that this will guide their review regimen because both education authors and PFS exam writers use this outline as a basis for their work. The first exam covering this updated PFP Body of Knowledge will be July 2017.

Note:  All eligible work experience and education for the PFS credential requirements must fall within the twelve practice areas comprising the PFP Body of Knowledge.

Integration of Income Tax Planning
. Individual income tax planning is an integral part of personal financial planning. In previous iterations of the PFP BOK, it has been included as a separate major topic. This approach did not adequately demonstrate the integration of income tax planning within the individual topics throughout the PFP Body of Knowledge. In response to this, the current PFP Body of Knowledge addresses individual income tax planning in the following manner:

Following is a guide to help apply the twelve major topics of the PFP Body of Knowledge in practice (from the PFS Credential Application Kit):

1.  Personal Financial Planning Process

  • Applying any and all steps in the standard financial planning process to clients
  • Gathering data and helping clients establish their financial goals
  • Building rapport with client and addressing family dynamics in the client relationships

2.  Professional Responsibilities and Legislative and Regulatory Environment

  • Applying the principles of the Statement on Standards in Personal Financial Planning Services to any aspect of the client relationship
  • Complying with any requirements for licensing with the state or federal authorities for the services or products provided

3.  Fundamental Financial Planning Concepts

  • 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
  • Determining strategies for tax liability management

4.  Estate Planning

  • 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)

5.  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

6.  Risk Management 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

7.  Employee and Business-Owner Planning

  • Analyzing and making recommendations on executive compensation and stock options
  • 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
  • Planning with business-owners on decisions about their business that impact their current or future personal financial goals

8.  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

9.  Retirement and Financial Independence 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

10. Elder, Special Needs, and Chronic Illness Planning 

  • Helping clients understand the variety of care options that are available to them
  • Analyzing financial aspects and assisting clients with housing related decisions
  • Providing bill-pay or other personal financial services for clients
  • Developing plans to address current and future financial expenses for special needs clients

11. Education Planning

  • Assisting clients with understanding the education planning process
  • Developing recommendations for education funding strategies
  • Assessing income tax implications for education funding strategies

12. Special Situations

  • Defining clients' housing goals
  • Planning income needs and evaluating division of assets during a divorce
  • Advising clients on household employees

Go to the PFS Credential Overview Page

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