Professional Designations

What is a Personal Financial Specialist (CPA / PFS)?

By  Brian Thorp

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The Personal Financial Specialist (PFS) is a designation for licensed Certified Public Accountants (CPAs) who wish to provide financial planning services to their clients. Designed by the American Institute of Certified Public Accountants (AICPA), the PFS allows CPAs to go beyond their traditional duties and help others plan for their futures.

Let’s take a closer look at what this financial certification is, what it takes to earn it, and how you may benefit from working with a PFS. 

What is a Personal Financial Specialist (CPA / PFS)?

Essentially, a PFS is a CPA with training and work experience in the financial planning industry. They have the expertise it takes to help clients holistically with a number of financial matters including retirement, investments, risk management, estate planning and taxes. 

Once they complete all of the education, experience, and exam requirements necessary to earn the designation, PFS candidates are well-versed in the twelve areas that comprise the PFS Body of Knowledge: 

  • Personal Financial Planning Process
  • Professional Responsibilities and Legislative and Regulatory Environment
  • Fundamental Financial Planning Concepts
  • Estate Planning
  • Charitable Planning
  • Risk Management Planning
  • Employee and Business-Owner Planning
  • Investment Planning
  • Retirement and Financial Independence Planning
  • Elder, Special Needs, and Chronic Illness Planning
  • Education Planning
  • Special Situations

They help clients see “the big picture” along with the tax implications of all of their financial decisions. This allows them to ensure that all of their bases are covered. Many PFS holders are found on lists of top financial planners due to the rigorous requirements they must meet. 

Should You Hire a Personal Financial Specialist (PFS)?

A PFS has the advanced tax expertise and depth of financial knowledge that may help you if you:

  • Want to Understand the Tax Implications of Your Personal Financial Plans: The reality is that retirement, investments, insurance, estate and virtually all areas of personal financial planning come with tax implications. A PFS has the unique combination of extensive tax expertise and comprehensive financial planning you need to understand the tax implications of your financial plans and receive the most comprehensive advice possible. 
  • Would Like to Take a Comprehensive Approach to Estate Planning: Estate planning can be difficult and nerve racking, to say the very least. A PFS may review your wills, trusts, retirement plans and other estate documents to ensure they’re in good shape and up-to-date. They can also collaborate with you to design a strategy that meets your goals while preserving the assets you’ve worked so hard to attain. With their guidance, you may reduce your tax liability and ensure your wishes are honored when the time comes. 
  • Need Retirement Planning Support: A PFS may help you figure out the primary sources of income you should have to retire at your preferred age with the lifestyle you desire. Then, they can create strategies on your behalf so you can grow your retirement accounts and save on taxes in the process. 
  • Wish to Plan for Education Expenses: If you have children who you hope to send to private school or college, a PFS is invaluable. You can trust them to design an investment strategy with your children’s ages and projected education costs in mind. They can also keep your education savings plan updated to accommodate changes in tax laws, financial aid requirements as well as your employment, and investment options. 

What Does it Take to Earn and Maintain the Personal Financial Specialist Designation?

Those who hope to earn a PFS designation must fulfill certain requirements set forth by the  American Institute of Certified Public Accountants. Here’s a brief overview of what that they are:

CPA License

The PFS designation is only available to licensed CPAs. These CPAs must be a current member of the American Institute of Certified Public Accountants (AICPA) in good standing.

Education 

To become a PFS, candidates are required to complete a minimum of 75 hours of financial planning education in the Body of Knowledge categories. They can do so up to five years before they apply for the designation. 

There are a number of ways PFS candidates can satisfy this education requirement. They can enroll in professional development opportunities and complete five financial planning certificate programs administered by the AICPA.

Experience 

PFS candidates must have at least 3,000 hours of work experience under their belt. This experience needs to be in one or more of the twelve Body of Knowledge categories.

Exam

The PFS exam is comprised of 160 multiple choice questions. Approximately half of them are based on case studies. These case studies are intended to test candidates’ analytical reasoning and ability to apply financial planning theory in comprehensively. 

PFS candidates may take the PFS exam during one of two annual exam times online or in-person at a testing center. It usually lasts about five hours with one 30-minute beak. PFS candidates may also satisfy the exam requirement by earning the CFP or ChFC designation. 

Ethics

CPAs with the PFS designation are required to adhere to the AICPA code of conduct. At its core, the code of conduct states that they’ll act with objectivity and integrity. They’ll also maintain client confidentiality and reveal any conflicts of interest.

Disclaimer: The information in this article is not intended to encourage any lifestyle changes without careful consideration and consultation with a qualified professional. This article is for reference purposes only, is generic in nature, is not intended as individual advice and is not financial or legal advice.

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