Overview of a Personal Financial Specialist (PFS)
A Personal Financial Specialist (PFS) is a prestigious certification exclusive for Certified Public Accountants (CPAs) that enables them to broaden their expertise into financial planning and wealth management. Achieved through rigorous educational and professional requirements, the PFS designation amplifies the skillset and career opportunities of CPAs, opening doors in various corporate, consulting, and wealth management domains.
Key Takeaways
- The PFS certification empowers CPAs with enhanced expertise in domains such as estate planning, retirement planning, investing, and insurance.
- Professionals with a PFS designation may pursue careers at accounting firms, consulting firms, or establish their own wealth management practices.
- Achieving a PFS requires a CPA license, specified levels of education and experience, and passing a comprehensive examination.
- The PFS credential combines financial planning knowledge with extensive tax and corporate finance expertise inherent in the CPA qualification.
Understanding the Personal Financial Specialist (PFS)
The Personal Financial Specialist (PFS) certification signifies a blend of extensive tax expertise and comprehensive knowledge in various facets of financial planning, including estate planning, retirement planning, investments, and risk management, allowing CPAs to add significant value to their clients.
Individuals earning the PFS designation can affix it to their names, which bolsters job prospects, professional respect, and potential earnings.
Requirements to Achieve a Personal Financial Specialist (PFS) Designation
Achieving a PFS designation involves fulfilling several key requirements: holding a CPA license, membership in the American Institute of Certified Public Accountants (AICPA), adequate education and business experience, and passing relevant examinations. Detailed below are some of these requisites:
CPA License and AICPA Membership
Candidates must possess an unrevoked, valid CPA certification and be in good standing as a Regular member of the AICPA.
Education and Experience Requirements
Candidates can follow two principal pathways—Standard and Certificate—each involving varying degrees of education and experience:
- Standard Pathway: Requires 3,000 hours of business experience in personal financial planning or teaching relevant accredited courses and at least 75 hours of personal financial planning education.
- Certificate Pathway: Includes studying specific online certificate modules and passing associated online exams.
- Experienced Pathway: Entails five years of full-time experience (or 7,500 hours) in personal financial planning, including fulfillment of the Experienced CPA Education course and 105 hours of personal financial planning education within the past seven years.
- Reinstatement Pathway: Available for previously certified individuals upon agreeing to Reinstatement terms.
Educational programs can be pursued through AICPA offerings or equivalent accredited university courses.
PFP Body of Knowledge
Outline the educational and experiential foundations covering 12 essential areas:
- Personal Financial Planning Process: Including goal setting and data analysis.
- 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.
Continuing Education
Annually, PFS professionals must complete 20 hours of continuing professional education and pay a nominal fee to maintain their designation, ensuring they remain updated with the latest developments in financial planning.
Exam for the Personal Financial Specialist (PFS)
The intensive PFS examination tests a candidate’s knowledge of the financial planning process across diverse topics such as taxes, retirement, investments, insurance, and estate planning. The exam format includes 160 multiple-choice questions and case study reviews. Alternative exam structures exist based on pathway choices.
Exemption possibilities exist for CPAs who have passed comparable exams like the Certified Financial Planner (CFP) or Chartered Financial Consultant (ChFC).
Benefits of Obtaining a PFS Certification
Holding a PFS certification offers manifold benefits to both professionals and clients:
- For Professionals: Enhances reputation, attracts new clients, improves career prospects, and potentially boosts income by showcasing expertise in financial planning integrated with tax and corporate finance proficiency.
- For Clients: Provides access to a well-rounded financial strategy, expert guidance in elder and estate planning, and nuanced tax and accounting services aligning with their long-term financial goals.
Comparing PFS and CFP
While both the PFS and Certified Financial Planner (CFP) designations cover personal financial planning, notable differences exist. PFS holders possess an extensive background in tax, accounting, and wealth management due to their CPA accreditation. In contrast, CFPs adhere to fiduciary standards and a comprehensive code of ethics set by the CFP Board, targeting investment planning and advisory roles.
Both certifications demand significant professional experiences and educational benchmarks. However, PFS certification strictly requires an existing CPA license, unlike the CFP designation.
Pursuing either certification equips professionals for prosperous careers in financial strategy, retirement, and tax planning, meeting diverse client needs and esteemed industry standards.
Related Terms: Certified Financial Planner, Chartered Financial Consultant, Wealth Manager, Corporate Finance.
References
- AICPA. “PFS Credential Handbook”, Page 2.
- AICPA. “Personal Financial Specialist Credential Handbook”, Page 9.Download PDF.
- AICPA. “AICPA Credential Recertification Requirements”.
- AICPA. “What Is the PFS Credential?”, Select PFS Exams.
- Certified Financial Planner Board of Standards. “Certified Financial Planner Certification Requirements”, Click Experience.
