it's never too early (or too late) to specialize: is a career in personal financial planning...

It's Never Too Early (or Too Late) To Specialize: Is a Career in Personal Financial Planning Right for You?[presenter name/business name][presentation date]

Personal Financial Specialist

Introduction

About the PFP Section & PFS Credential• The AICPA PFP Section provides information,

resources, advocacy and guidance for CPAs who specialize in providing estate, tax, retirement, risk management and investment planning advice to individuals and their closely held entities

• The CPA/Personal Financial Specialist (PFS) credential distinguishes CPAs as subject-matter experts who have demonstrated their financial planning knowledge through experience, education and testing

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Introduction

My background in accounting

My story about becoming a CPA/PFS

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Agenda

What is personal financial planning (PFP) & what is a CPA financial planner

Why specialize in PFP

What are the business opportunities in the profession

How to pave your own unique career path as a CPA financial planner

How to gain the experience you need within the CPA profession

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Traditional Areas Provide the Base for Specialization

CPA Tax

Provider

Financial PlanningCPA engages in tax, estate, retirement, insurance and/or

investment planning services

BASE Specialization Credential

Clients ask about planning

Clients ask about gift & estate valuations

Business ValuationCPA provides business valuation expertise for

taxes, M&A, expert witness, and other engagements

Demonstrates expertise through exam , experience

and education

Personal Financial Specialist (PFS)

Accredited in Business Valuation

(ABV)

CPA Auditor

Financial ForensicsCPA engages in forensic

work around fraud investigations, etc.

Fraud suspected or found during audit

Audits leveraging automated tools, IT audits, application control reviews, SOC

Information TechnologyCPA works on information management & business intelligence engagements

Demonstrates expertise through exam , experience

and education

Certified in Financial

Forensics (CFF)

Certified Information Technology

Professional (CITP)

Audits resulting in valuation requests

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What is financial planning?

RISK MANAGEMENTINVESTMENTRETIREMENT

ESTATETAX

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What is a CPA financial planner?

CPA financial planner who practices in one or more of the following areas of financial planning:• Cash flow planning• Risk management and insurance planning• Retirement planning• Investment planning• Estate, gift, and wealth transfer planning• Elder planning• Charitable planning• Education planning• Tax planning

Enhance your technical credentials with the CPA Personal Financial Specialist (CPA/PFS)• More on this later in the presentation

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Why specialize?

Client retention

Added revenue and profits

Staff retention

Balance workload throughout year

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Why specialize?

The most significant challenge facing CPA firms of all sizes across the nation today is client retention and firm growth.

Jim Metzler AICPA vice president for small firm interests.

Another significant challenge to CPA firms is staff retention and succession.

Many in the younger generation are eager to develop a broader expertise that includes financial planning.

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What do younger CPAs want professionally?

Less compliance/routine work (Type 1 work)

More Future oriented and Value driven work (Type 2) such as:• Financial planning• Strategic planning• Profit improvement planning• Benchmarking• Key performance indicator (KPI) monitoring

2020 Survey, Chris Frederiksen, CPA/PFS, Chairman

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Why specialize?

A study by CEG International found more than half of wealthy individuals are likely to obtain financial services from their CPAs

Financial planning is too important to be left in the hands of unqualified professionals

CPAs are quite possibly the single most important decision makers for individuals and businesses, and it is time to realize that we do more than just taxes

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Specialization will drive accounting sector growth

2012 2013 2014 2015 2016 2017

Accounting Industry

1

Forensic Accounting

Financial Planning

Business Valuation

IT Consulting

1

Risk Management

Gro

wth

Rat

e

1x

2x

4x

Sources: 1 IBISWorld 2012 2 Deloitte

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Why specialize?

Business Valuations

State and local Taxes

International Tax

Litigation Support

Estate/Trust/Gift Tax Plan.

Forensics/Fraud

Industry Specializations

75%

73%

72%

70%

69%

68%

63%

% of major firms growing their practices in these disciplines….

Source 1 Accounting Today

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Why specialize?

Findings from 2013 AICPA Compensation Survey• Median total compensation for CPAs is $160,200. That is, exactly half

of all CPAs earn more and half less. The average total compensation is $236,600.

• The data show that total compensation is higher among credential holders. On average, specialty credential holders receive a total compensation $26,700 higher than non-credential holders.

• Many CPAs believe credential holding leads to higher compensation and hiring and promotion opportunities.

- 31% say holding a credential leads to increased compensation- 51% say holding a credential makes a difference in being

promoted, and - 66% say holding a credential makes a difference in being hired

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What qualities make a good CPA financial planner?

Interpersonal skills• Working with a variety of client personalities• Communicate complex financial concepts in easy-to-understand

language• Willingness to help others.

Analytical mind/detail-oriented

Desire for life long learning

Strong ethical responsibility

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How to become a CPA financial planner

Education• College level• Beyond (CPE, web seminars, conferences, PFS exam review

courses and education)

Become a CPA• Bolster your CPA credential with the PFS credential

Experience• Develop soft skills• Develop technical skills

Understanding the business• Engage with other successful CPA financial planners

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Year 1-2

10+ YearsExpert

(continue specialized training

– advanced)

CPA training - intro / beginning level

specialized work

experience

obtain specialized credential

specialized training -

intermediate

work experience

specialized training - advanced

articles/ speeches/ seminars

Years of Experience

Job Position

Manager

Director

Partner / Managing Director

Specialized Credential Career Path / Goals

Year 3-4 Senior

work experience

training - general

Years 5-7

Years 8-10

work experience

CPA

Staff

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Why does being a CPA matter?

True, you can be a financial planner without being a CPA

BUTCPAs are the “most trusted advisor”

CPAs are required to be objective

CPAs have a broad base of knowledge

CPAs must follow the Code of Professional Conduct

ANDThe CPA/PFS credential demonstrates your expertise and clearly differentiates you from other CPAs and non-CPA financial planners.

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The CPA as the Personal Financial Planner

Legacy of the CPA profession & multigenerational perspective• Century of experience sets the CPAs apart the trusted adviser• Independence & objectivity hallmarks of the CPA profession

Informal advice morphed to formal profession• CPAs wrote the book on college planning, tax planning and

generational wealth planning. • CPA is the personal CFO, simplifying the complexity that wealth

brings & often “quarterbacking” other advisers

Taxes an integral part of all PFP decisions• Overall picture of a client’s financial situation• Tax returns offer details of cash flow/income situation• Planning decisions have tax implications

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Business models

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Business Opportunities

Endless!

You are already the trusted advisor in most cases• CPA credential

Familiar with tax strategies and tax law• Impacts all areas of PFP advice

Know the client situation• Tax returns

Diversify your client base and revenue streams

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Scope of Services

Segmented financial planning

Comprehensive financial planning

Financial planning with assets under advisement

Financial planning with assets under management

Financial planning with assets under management and product sales

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PFP Entity Structure

Service within CPA firm or separate practice dedicated to PFP

CPA firm affiliated separate entity (RIA)

Separate entity (RIA) not affiliated with CPA firm

Referral partner

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Investment Advisory Business Models

Investment Adviser Investment Adviser RepresentativeBroker-Dealer Registered RepresentativeSolicitor/ReferralPortfolio ManagerCompensation Models• Fee-Only Financial Adviser (RIA – fiduciary) – most CPAs use

this model• Fee-Based Financial Adviser• Commission Payments

The CPA's Guide to Investment Advisory Business Models

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http://www.aicpa.org/InterestAreas/PersonalFinancialPlanning/Resources/PFPPracticeManagement/PFPPracticeGuides/DownloadableDocuments/CPA-guide-investment.pdf

http://www.aicpa.org/InterestAreas/PersonalFinancialPlanning/Resources/PFPPracticeManagement/PFPPracticeGuides/DownloadableDocuments/CPA-guide-investment.pdf


Where to look for a job as a CPA financial planner

There is no “right” path – almost everyone’s looks different

CPA firms (Tax department)

Wealth management firms

Banks and brokers

Start your own financial planning practice

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Creating Your Own Career Path

Unlike public accounting firms, personal financial planning firms come in all shapes, sizes, and areas of specialization

Determine where your strengths lie and the work you really want to do

Find the firm that most closely matches your goals or…

Create your own firm to fulfill your vision

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Bolster your CPA license with the CPA/PFS credential

Distinguish yourself from other CPAs and non-CPA planners

Affirm your expertise independently by the largest and oldest association of accounting professionals

Demonstrate dedication to continual professional improvement in financial planning

Enhance your image as a trustworthy adviser to your financial planning client’s with the AICPA’s Professional Code of Conduct

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Know your client and, as their trusted advisor, help them plan and make decisions with their entire financial picture in mind

Be a leader for your client by initiating advice and coordinating other advisors to your client

Be an advocate for your client, to help your client achieve his/her goals

Be a coach and educator to your client, to empower your client to make informed decisions

Navigate complex issues that your client faces on a regular basis

Gain personal satisfaction from working with clients on their path to achieving their goals

Why choose to be a CPA/PFS?

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Who can benefit from being a CPA/PFS?

The CPA/PFS credential demonstrates the expertise and experience that a CPA has in personal financial planning. This can benefit many CPAs who practice financial planning:

• Tax practitioners who also focus on estate and retirement planning with their clients

• CPAs providing broad-based comprehensive financial planning services• CPA planners focusing on niche areas like wealth management or risk-

management planning• Young CPAs with qualifying experience to gain recognition

The CPA/PFS credential validates the CPA’s understanding of the overall financial planning issues faced by his or her clients. This allows CPAs to meet their client’s needs and expectations regardless of how their financial planning business model is structured.

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CPA/PFS Qualifications

A CPA license and AICPA membership

Education• 75 hours of PFP-related education in the last five years

Examination• PFS exam, CFP exam, or ChFC exam

Experience• Two years of full-time PFP-related experience (3,000 hours, can

include 1,000 tax compliance work)

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Next Steps

Join the PFP Section• See Sarah Bradley at the AICPA booth for a special conference

discount.

ThisWaytoCPA.com• Website dedicated to upcoming and newly minted CPAs• CPA profiles, career tools, info CPA exam and licensure

Social Media• Search Young CPA Network on Facebook, LinkedIn and Twitter

Contact us: [email protected]

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mailto:[email protected]


Resources for CPAs to take next steps…PFP Practice Center (aicpa.org/PFP/practicecenter)

The CPA’s Guide series (http://bit.ly/YJoXkI) • Includes guides on developing and managing a PFP practice,

technology in PFP, investment advisory business models, etc.

Join the PFP Section (joinpfp.org); Become a CPA/PFS (aicpa.org/PFP/PFS)

Forefield Advisor (aicpa.org/pfp/forefield)

PFP Pathway: From Tax Preparer to Financial Planner (aicpa.org/PFP/Pathway)

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http://www.aicpa.org/PFP/practicecenter

http://bit.ly/YJoXkI

http://bit.ly/YJoXkI

http://www.joinpfp.org/

http://www.aicpa.org/PFP/PFS

http://www.aicpa.org/InterestAreas/PersonalFinancialPlanning/Resources/PracticeCenter/ForefieldAdvisor/Pages/ForefieldAdvisor.aspx

http://www.aicpa.org/PFP/Pathway


Using a tax return for developing personal financial planningVisit aicpa.org/PFP/pathway to access this checklist and other free resources.

Analysis of a Tax Return for Personal Financial PlanningDone Dependents and Filing Status

Does the client have children?Understand any education planning opportunities.Discuss gifting opportunites with the client.Consider income shifting to take advantage of the children's low tax rate.Have gift tax returns been filed?Do the number and ages of dependents indicate that income continuation needs are likely to be high?

Does the client have elderly parents whom they care for?Discuss estate planning with the client. Review the dependency rules to be sure the parents can be claimed.Discuss the future financial commitment of this care with the client.

Is the client divorced?Consider filing status and dependency exemptions in divorce situations.

Done IncomeWhat is the source of the client's income?

Understand their sources of income - wages, self-employment, partnership, etc.Are there any income deferral opportunities available given the client's investment income source?

Discusss the benefits of saving through 401(k), 457, 403(b), SEP, or IRA's. Does the client have income from a retirement plan still held with former employers?

Discuss rollover of funds to an IRA or consolidating IRA's with the client.Does the client have social security income?

Consider whether any of the social security income maximizing strategies might apply.Is the family income dependent on one wage earner?Are maximum 401(k) contributions being made?

Done Schedule B What are the sources of the client's interest income?

I f it's taxable, does it come from bonds, CD's, savings accounts, etc?I f it's tax-exempt, understand the state tax impact.I f the source is savings accounts, consider the FDIC limitsI f the source is municipal bonds, consider the safety of the bond.Does investment income indicate a liquid fund has been established for emergency needs?

What are the sources of the clients dividend income?Is it mostly from mutual funds or stocks?

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Questions?

Visit aicpa.org/PFP

RISK MANAGEMENTINVESTMENTRETIREMENT

ESTATETAX

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it's never too early (or too late) to specialize: is a career in personal financial planning...

Documents

financial planning knowledge

cpa financial planner

planning clients

investment planning

cpa profession

cpa firms

wealth transfer planning

soc information technology