What is a Personal Financial Specialist? | Ohio Wealth Management

Wealth Management: What’s a Personal Financial Specialist?

Published on by Andy Bertke, Beth Germann, in Consulting, Wealth Management

Wealth Management: What’s a Personal Financial Specialist?

Growing and protecting wealth is a critical part of a successful retirement planning strategy – but the options and associated decisions seem endless. How do you know you’re making the right choices?

Watch that first step

The first step – and one of the most important – is choosing the right wealth management advisor: one who can clearly outline investment options, model them against your goals, and make recommendations that will help you achieve them. But investment options and returns aren’t the only consideration – it’s critical to also have perspective on how these decisions and investments will affect your tax burden – including strategically offsetting capital gains taxes.

How can you be sure you’re selecting a wealth management advisor who understands the holistic picture, and who will always work in your best interests? A great way to answer this question is to work with a Personal Financial Specialist, or PFS. This designation is only available to those who have already achieved the certified public accountant (CPA) designation.

What works? Or what’s best?

And perhaps the biggest (and most important) difference in working with a PFS? They’re held to a different, higher standard in making investment decisions for their clients; since they maintain a fiduciary responsibility for their clients, they MUST act in the client’s best interests, whereas brokers are only required to pass a suitability requirement: what will work for the client. Not necessarily what’s best for the client. It’s a big difference, and it can mean an even bigger difference in your ultimate retirement.

Because a PFS is already a licensed CPA, they have the added depth and perspective in tax, accounting, and financial reporting – so they can see the bigger picture and present options to the client based on a range of different goals and impacts. Their ability to pull that extra knowledge into wealth management goals provides added layers of strategy – and optimizes results.

Here’s an example – a PFS can help a client select a stock portfolio, and their knowledge as a CPA further enables them to recommend portfolio adjustments based on sound tax strategies as well as suggest investment allocations and distributions using gift and retirement planning goals. It’s a 360-degree perspective that provides increased peace of mind – knowing that your assets are working their hardest for your future and your goals.

Becoming a PFS

Only a CPA can obtain the personal financial specialist (PFS) credential, and attaining a PFS means studying for, gaining experience in, and passing another rigorous exam (beyond the CPA exam). That’s not all; recommendations from colleagues and clients are required, and the individual must have at least two active years of full-time professional or academic experience in personal financial planning. Prospective PFS professionals must also earn at least 75 relevant continuing education credits in the five years before applying for the certification.

There are 12 knowledge areas that a PFS must prove competency in before applying to take the exam, including:

  • Personal financial planning process
  • Professional responsibilities, legislative, and regulatory compliance
  • Fundamental financial planning concepts
  • Estate planning
  • Charitable planning
  • Risk management planning
  • Employee and business owner planning
  • Investment planning
  • Retirement and financial planning
  • Elder and chronic illness planning
  • Education planning
  • Special situations (like divorce)

A PFS is further accredited by the Securities and Exchange Commission (SEC) in addition to the American Institute of Certified Public Accountants (AICPA).

What’s the difference between a PFS and a CFP?

The CFP, or Certified Financial Planner, is another common credential for financial planning professionals. A CFP is a type of financial advisor, and both professionals are required to maintain fiduciary responsibility for clients. The two accreditations are different, though.

  • The PFS is also a CPA and both are licensed through AICPA.
  • A CFP can be a standalone designation and is licensed through the Certified Planner Board of Standards, Inc.
  • The PFS is earned through a combination of experience (generally 3,000 hours), recommendations, continuing education credits, and passing an exam.
  • The CFP is earned through a combination of relevant college education, experience (generally 4,000-6,000 hours)
  • A PFS is knowledgeable and skilled in tax planning and analysis, financial reporting, and more in addition to financial planning.
  • A CFP has a solid but broad understanding of a range of financial topics.

Another benefit to working with a PFS is the seamless integration of tax compliance and planning with financial planning. During tax season, there’s no going back and forth between your accountant and your financial planner. Everything is centralized, organized, and easily accessible. And because the PFS is required to keep the client’s best interests at the forefront, clients know the advice they’re getting is objective and void of any special interests or incentives.

Get your wealth management on the right track

Looking for ways to optimize your wealth management and offset your tax burden? Watch the CPA Advantage series on our YouTube channel or talk with one of our PFS professionals.

Contact us – we’re here to help!


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