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? A career as a CPA financial planner or Personal Financial Specialist may be right for you!
Nature of the Work
CPA financial planners help their individual clients achieve their lifetime dreams by identifying and planning for short and long-term financial goals. This includes covering all elements of a client’s financial plan, encompassing planning for retirement, transferring of wealth to future generations, funding education, minimizing taxes, risk management (including proper insurance coverage) and general investment decisions. Although most planners offer advice on a wide range of topics, some specialize in one or two areas and work with other advisors to cover the other elements of their client’s needs. CPA financial planners typically begin with a traditional tax practice and build their financial planning practice from their client base. Some planners eventually choose to leave the tax work behind and focus solely on financial planning, particularly in smaller firms. And of course others have figured out how to start a financial planning practice from scratch.
CPA financial planners begin work with a client by setting up a consultation, where the CPA obtains as much information as possible about the client's finances and goals. The CPA creates a comprehensive financial plan that identifies problem areas, makes recommendations for improvement, and helps to implement solutions compatible with the client's goals, attitude toward risk, and expectation or need for investment returns.
CPA financial planners usually work in offices or their own homes, working standard business hours, but may occasionally schedule meetings with clients in the evenings or on weekends. Often, CPAs specializing in this area are able to work more flexible hours as many firms focus on providing quality work-life balance programs. Travel is sometimes discretionary and some advisors are even using technology to meet with clients in a virtual face-to-face meeting.
CPAs who choose to go deeper into investment advisory work have to ensure they are properly licensed and educated to provide this advice. Investment adviser representative (sometimes simply called investment adviser), broker-dealer, registered representative, portfolio manager, and financial analyst are among the many hats that a CPA financial planner can wear.
There are many opportunities in terms of where a CPA can get engaged in financial planning work, from the largest accounting firm as part of a personal financial consulting department down to being a sole practitioner, calling your own shots.
Licensure and other qualifications
Licensure. CPA financial planners must meet the qualifications of a CPA. Most states require 150 hours of education, which equates to a bachelor’s degree and a master's degree in accounting, finance or tax. Additional specialty designations such as the Personal Financial Specialist (PFS) lend credibility in terms of experience, ethics, and technical expertise. Math, analytical, and interpersonal skills are important.
CPA financial planners and their firms who choose to provide securities advice for compensation will need a combination of licenses that varies based upon the business model in which they are operate. Most CPAs in this business who decide to provide investment advice choose to register as an investment adviser representative (IAR) while their firm registers as a registered investment adviser (RIA) because the standard of care required with this business model correlates most closely with the CPA Code of Professional Conduct.
Other qualifications. CPA financial planners need analytical and interpersonal skills and a strong ethical responsibility. Also, given that most of the elements within financial planning requires a minimum level of expertise in tax, it is recommended that CPAs first get experience in tax planning for individuals and closely held entities prior to moving into financial planning. They need to have the ability to make a wide-range of clients feel comfortable as well as be able to present financial concepts to a variety of client personalities in easy-to-understand language.
Certification. Although not always required, certifications enhance professional standing and are recommended by employers. CPA financial planners may obtain the Personal Financial Specialist designation, which is issued to CPAs by the American Institute of Certified Public Accountants, requires a CPA license and 3000 hours of relevant experience over the past five years; the completion of education requirements; passing a comprehensive examination, and adherence the AICPA Code of Professional Conduct. The exam tests the candidate's knowledge of the financial planning process, professional responsibilities of CPAs engaged in financial planning, insurance and risk management, employee benefits planning, taxes and retirement planning, and investment and estate planning.
Tips for being competitive in this role or in getting the job
- Practice good communication and other soft skills
- Build relationships and network
- Seek out leadership opportunities
- Strengthen your tax knowledge to individuals and their closely held entities
- Join the AICPA PFP Section to network and learn from other CPA financial planners and to access resources to strengthen knowledge
- Obtain your CPA license and bolster it with the Personal Financial Specialist designation
What to do now
- Obtain your CPA license
- Join the AICPA’s PFP Section to access resources to help bolster your knowledge in this area as well as to begin networking with other CPAs who specialize in financial planning
- Obtain your PFS credential after you get your CPA license and meet the other credential requirements
Get it now! Personal Financial Specialist Series License Deadline
To become a PFS credential holder and prove your expertise in the areas of financial planning, you have to meet education, experience and exam qualifications to demonstrate your well-rounded knowledge in estate, retirement, tax, investment and risk management planning. The exam qualification is tightening up and as of the end of 2010, the CFA and series 7, 66 and 65 series license exams will no longer qualify to meet the PFS exam requirement. Learn more about taking the series 65 and 66 exams without a FINRA firm sponsor. To learn more about PFS requirements in general, visit www.aicpa.org/PFP/PFS.
Not ready to get it now? Start with the AICPA/Keir Personal Financial Specialist Credential Exam Review Course
Be ready to respond to your clients’ financial planning questions! Prepare for the PFS exam with a CPE self-study course covering estate, retirement, tax, investment, and insurance planning. Discounts are available for AICPA, Tax and PFP members. Order now! For more information about the PFS credential, visit www.aicpa.org/PFP/PFS.
For more information, visit aicpa.org/PFP.