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The Case for Credentialing and the PFS Credential

Why you should become a Personal Financial Specialist (PFS) and how it can enhance your business during the recession.

February 19, 2009
by Erica Porter, CPA, PFS and Dan Snyder, MBA

Credentials are an important undertaking on the part of any professional. Credentials communicate volumes to the client about who the professional is and how seriously they take their business. Credentials separate one professional from another showing an achievement beyond basic knowledge and experience. The Personal Financial Specialist (PFS) credential is uniquely positioned for the CPA who offers personal financial planning services to their clients especially in these trying times.

The CPA is no stranger to the benefits of professional licensure. The CPA license establishes the holder as a trusted adviser, someone who has a thorough understanding of a body of financial knowledge and is responsible to the public to act in an ethical and objective manner with respect to their clients.

Personal financial planning services are growing in importance in many CPA firms and communicating financial planning credentials to clients is an important part of any firm's marketing plan. There is no shortage today of credentials and professional designations for which financial services practitioners can choose to qualify. At last count, the list on the FINRA Web site was up to 89. Which credentials to use depends on a number of factors including your profession, your business model and your clients.

Your Profession. Using a credential that builds on your current profession is a smart choice. You have put much effort into becoming a CPA and building your practice. A financial planning credential that leverages your commitment to the CPA profession is a distinction that sets you apart from other planners. The PFS credential is offered by the AICPA exclusively to CPAs. The accounting profession is built on trust, integrity, and objectivity, what better way to communicate to your clients your commitment to their personal financial planning needs than showing them the designation that builds on that foundation. All of the confidentiality and professionalism your clients expect from you as a CPA are implicit in the PFS credential.

Your Business Model. Whether you consider yourself a general practitioner or a specialist, the PFS credential offers you a comprehensive foundation on which to build your business. The very nature of the CPA's relationship with their clients demands that you be knowledgeable about the impact of various financial decisions on the overall plan. You can communicate to your clients that the PFS credential is a comprehensive certification in all areas of personal financial planning. Prospective clients are looking for a professional that can work with them to create the financial plan and implement the plan using appropriate other professionals as needed. The PFS credential communicates your competence to both your clients and your peers.

Your Clients. Your clients are the lifeblood of your business. Their satisfaction is crucial for both retention and referrals. You are accountable to them for the quality of the work that you do. Holding yourself out as a PFS-credentialed professional tells your clients you are also accountable to your profession, that you are not afraid to professionally draw a line in the sand and say "I can't do that." It clearly demonstrates for your clients the implicit link between the CPA and the PFS, between your accounting work and your financial planning services.

The media's interest in the CPA's involvement in financial planning and the PFS credential continues to grow. Each month the communications department of the AICPA spearheads many media outreaches with CPA/PFS professionals across the country. But these only reinforce the most important communication — you with your client. The benefits you bring to your client by being a PFS are most clearly presented by you to your client directly. The relationship is developed at the practitioner level and you can clearly explain how the PFS credential complements your accounting practice. Use the media to emphasize your point, but don't relinquish control of your most effective marketing tool. There is nothing more powerful than backing up who you say you are — a CPA, PFS professional — with what you do for that client. You cannot buy advertising nearly as effective.

Upcoming Changes. The PFS Credential program is undergoing some changes that will both clarify the process of qualifying for the credential and advance the status as a comprehensive personal financial planning credential.

The Path to the PFS. The AICPA will be introducing a complete pathway designed to accommodate both aspiring and experienced professionals. This path will culminate in a new PFS Exam, administered by the AICPA. A self-assessment tool will help you assess your educational needs. A curriculum of educational courses in each financial planning discipline and an exam review course will round out the new offering. A key part of the PFS Exam will include a case study designed to give you feedback on your client communication skills.

Credential Qualification. The changes in qualification both simplify and tighten the requirements. There are four major requirements:

  1. CPA license — establishes the ethical and professional foundation for the credential;
  2. Education — requires 80 credit hours of personal financial planning education;
  3. Experience — requires two years of full time experience in financial planning; and
  4. Exam — requires completion of the comprehensive PFS exam (completion of the CFP [Certified Financial Planner] or ChFC [Chartered Financial Consultant] exams can be substituted). Please note, the CFA exam and the Series 7, 65 and 66 licenses will be qualifying exams only until December 31, 2010.

The PFS credential is backed with a variety of resources including Marketing and Media Toolkits and membership in the AICPA's Personal Financial Planning Section. More information can be found at the AICPA's PFP Center.

Conclusion

Today, it is more important than ever to communicate your commitment to your profession and your clients by establishing yourself as a fully credentialed CPA financial planner. The PFS credential allows you to convey this strong message.

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Erica Porter, CPA/PFS is a Technical Manager in AICPA's Specialized Communities Personal Financial Planning Section.
Dan Snyder
, MBA is also a Technical Manager in AICPA's Specialized Communities Personal Financial Planning Section.