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Wealth Management: Benefits of Working with a CPA/PFS

Published on by Beth Germann in Wealth Management

Wealth Management: Benefits of Working with a CPA/PFS

Whether you’re going through a major life transition or simply planning for the next step, the options can seem overwhelming. How do you know you’ve got a complete picture, and how do you know what’s best for your unique situation? There are many issues that need to be considered – in addition to a vast array of investment options, it’s also critical to understand the tax implications – federal, state, and local taxes. A professional financial advisor can guide you on the investment front, of course, but what about taxes?

That complete picture – including the tax implications – is the bottom-line advantage of working with a wealth management advisor who’s earned the CPA/PFS designation. The Personal Financial Specialist (PFS) designation requires an in-depth knowledge base and additional certification – and it’s only available to Certified Public Accountants (CPAs).

This broad background and skillset put an advisor with CPA/PFS credentials in a unique position to provide long-term value for your financial goals, including insurance, retirement planning, and estate and trust planning as well as the tax impact of each decision. Here’s what you need to know.

Why starting with a CPA is a smart move

A Certified Public Accountant (CPA) is the highest standard of professional accounting and tax planning. During the pandemic and the vast array of relief legislation passed in response to the crisis, many had their CPA on speed dial, and for good reason. Our role as CPAs is to guide clients objectively and strategically through opportunities and risks in taxes and finances. We have the knowledge and tools to dig deeper than surface-level credits and deductions and offer analysis, projections, and implementation guidance.

And why working with a CPA/PFS investment advisor is even smarter

Beyond the value a CPA brings to the table, a CPA/PFS advisor has specialized knowledge in personal financial planning. It’s a more holistic process and involves the whole picture of your financial life, not just your investment accounts.

What’s a CPA/PFS?

A CPA/PFS is an AICPA-certified credential. To earn it, professionals must first possess a CPA license and be a member of the AICPA in good standing.

From there, they must meet minimum requirements for continuing professional education and years of financial planning experience: Individuals either earn at least 75 hours of related CPE in the five years before the PFS application or have two years of experience (3,000 hours) in personal financial planning. Experienced candidates may satisfy this requirement with a 7,500-hour equivalent in the seven years prior to the PFS application.

Then, candidates must successfully pass an exhaustive exam and continue to earn at least 60 hours of CPE every three years.

It can be easy to confuse a CPA/PFS with a CFP, or Certified Financial Planner. Both types of advisors are qualified to provide guidance on investment and financial planning needs, but there are a few key differences:

  • Different accrediting organizations: the CFP Board issues the credential and administers the exam.
  • Different requirements to earn the credential; a background in finance and accounting isn’t required, only a college degree. Individuals must pass an exam and continuing education isn’t required.
  • Different coursework: the CPA/PFS covers more material
  • Different careers: CFPs are more likely to take jobs across all finance sectors

Both credentials emphasize ethics and holding oneself to a higher standard. And while the CFP designation is highly trusted and known to have broad exposure to main areas of financial planning, a CPA/PFS has unmatched knowledge and deeper expertise in all aspects of financial planning.

The CPA/PFS role in tax and investment planning

A CPA/PFS helps clients to understand the why, not just the how of tax planning. To do this, we’re looking at the tax documents, investments, retirement plans, and insurance needs, and opening discussions with the client about their current and future goals. Our role is to bring together both qualitative and quantitative measures of your financial life.

For example, from working with the tax return, the advisor may see that there’s a child with special needs. That knowledge, which wouldn’t have been available to someone who’s only looking at one piece, would empower a discussion about a special needs trust as part of the overall strategy and planning. There are different types of special needs trusts and different ways of funding them, and a CPA/PFS can help you better understand the options and select the optimal solution.

Another planning opportunity to maximize returns for a business owner and family – and for employees – is a cash-balance plan– an approach that enables owners and family members to rapidly accumulate retirement savings while increasing the amount contributed to employee retirement plans and generating additional cash flow for the business.

Tax planning already incorporates many of the same approaches and bodies of knowledge as a CPA/PFS. The access to information and ability to explain it is what sets the CPA/PFS apart and makes them indispensable allies in your financial planning journeys.

Learn more

Want to learn more about the advantages of working with a CPA/PFS, or have questions? Contact us for a free consultation with one of our CPA/PFS professionals. We’re here to help.


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