CPA/PFS Eligibility Requirements
CPA/PFS Eligibility Requirements
A Personal Financial Specialist (PFS) is a certification designated for certified public accountants (CPAs). This certification allows accountants to expand their knowledge, expertise, and service offerings into financial planning and wealth management. This certification, established by The American Institute of Certified Public Accountants (AICPA), can only be held by a registered CPA, meaning that the certification can only be reserved for certified public accountants. With the CPA being a major prerequisite for eligibility to receive a PFS certification, certified public accountants can enjoy the numerous benefits of holding the license, including expanded employment opportunities within financial corporations, consulting firms, wealth management firms, and other financial advisory service firms. Holding the certification also includes earning the right to use the PFS designation within one’s professional title. PFS holders are also able to start their own financial planning or wealth management practice as well.
Personal Financial Specialist (PFS) Requirements
In order to obtain the PFS certificate, a professional must have a CPA license, an educational degree, and a specified level of experience. Alongside a valid CPA license issued by the state in which the individual does their practice, the candidate must also be a regular member of the AICPA.
As for education, a candidate can achieve this requirement in several ways. Following the Standard and Certificate Pathway approach, a candidate could possess at least two full-time years of teaching or business experience in personal financial planning, equivalent to 3000 hours. This experience must be obtained within five years previous to applying for the CPA/PFS. Up to 1,000 hours of tax compliance experience can also count toward the total experience required for the PFS; however, a minimum of 75 hours of personal financial planning education is needed in the preceding five years before applying for the PFS.
The other alternative Experienced Pathway approach, states that for a certified accounting professional to achieve this requirement, five years of full-time experience in personal financial planning, which equals to around 7,500 hours, could also qualify an individual for the certification. 2,000 hours of tax compliance can be credited toward an individual’s total experience required for the PFS; however, a minimum of 105 hours of personal financial planning education is needed in the preceding seven years before applying for the PFS.
Regardless of the pathways chosen to achieve eligibility for the certification, according to the PFS credential handbook, the education and experience of an applying candidate must be within the 12 areas of personal financial planning (PFP) Body of Knowledge. The 12 areas that comprise the PFP Body of Knowledge include:
- Personal Financial Planning Process: This includes assisting clients in establishing their financial goals, gathering their financial data to make financial decisions with client funds, and building the client-advisor relationship.
- Professional Responsibilities, Legislative, and Regulatory Compliance: This includes complying with all licensing requirements from local, state, and federal authorities.
- Fundamental Financial Planning Concepts: This includes financial budgeting, analyzing client cash flow, client income, and client spending patterns
- Estate Planning: This includes establishing an estate financial plan for a client and determining the cash needed in the event of a client’s death and their potential tax liabilities.
- Charitable Planning: This involves determining the allocated assets for charitable giving and the various types of financial products available, such as life insurance and trusts.
- Risk Management Planning: This includes determining a client’s financial risks, including potential disability, potential illness, and potential property damage, as well as reviewing available financial products available to mitigate such risks.
- Employee and Business Owner Planning: This includes the executive compensation and employee benefit packages available for clients during job transitioning and the tax implications involved with exploring those potential options.
- Investment Planning: This involves the review of a client’s investment portfolio by looking at capital gains and losses, risk tolerance, and investment preferences to determine an appropriate investment strategy for the client.
- Retirement and Financial Planning: This includes determining a client’s cash needs for an enjoyable retirement, other financial goals, and savings needed to meet those particular goals.
- Elder and Chronic Illness Planning: This includes assisting clients in understanding the various elder care and housing options while developing a plan for those health and financial expenditures.
- Education Planning: This involves assisting clients with educational planning and financial funding strategies for secondary education.
- Special Situations: This includes defining a client’s housing goals, a client’s income needs and determining the division and allocation of assets in the event of a divorce or death.
Alongside initial education, PFS professionals are required to complete 60 hours of additional secondary professional education every three years, as well as pay a fee of several hundred dollars to continue using the professional designation.
Benefits of a Personal Financial Specialist (PFS)
Numerous benefits exist for accounting professionals holding the PFS certification. Professionals have the ability to display the PFS within their professional title, demonstrating their personal financial planning expertise and knowledge, which can help attract new clients. The PFS certificate can enhance a professional’s reputation and professional brand if the accountant has started his own financial planning or wealth management practice. Therefore, the PFS certification is able to improve career opportunities for accounting professionals with the potential to boost income.
FAQs
PFS applicants study estate planning, investing, retirement planning, insurance, and other areas of personal financial planning.
PFS is the abbreviation used for a Personal Financial Specialist, while a CFP is an abbreviation used for Certified Financial Planners. Both are licensed to provide registered investment advice in financial planning. Personal Financial Specialists are experts in tax planning and retirement planning, while Certified Financial Planners specialize in financial planning and investment management.
The PFS designation covers financial planning at higher levels than that of other certifications in Financial Services like a CPA or CFP. This makes PFS advisers better placed and more qualified to offer their clients a more sophisticated and comprehensive approach to financial management services which helps to ensure a higher level and grade of advice.
A Personal Financial Specialist often collects commissions, fixed fees, or percentages based on assets under management (AUM) when overseeing a client’s portfolio.
All registered investment advisors (RIAs), including personal financial specialists, act as financial fiduciaries. This includes other licensed financial professionals like Certified Financial Planners (CFPs).
- AICPA. “PFS Credential Handbook,” Page 2. Accessed July 3, 2021. Accessible From: https://www.aicpa.org/content/dam/aicpa/membership/join/downloadabledocuments/pfs-credential-handbook.pdf
- AICPA. “CPA/PFS Eligibility Requirements.” Accessed July 3, 2021. Accessible From: https://www.aicpa.org/membership/join/pfs-eligibility-requirements.html
- AICPA. “PFP Body of Knowledge.” Accessed July 3, 2021. Accessible From: https://www.aicpa.org/interestareas/personalfinancialplanning/membership/pfsbodyofknowledge.html
- FINRA.org. “Personal Financial Specialist (PFS).” Accessed July 3, 2021. Accessible From: https://www.finra.org/investors/professional-designations/pfs
- AICPA. “CPA/PFS Exam.” Accessed July 3, 2021. Accessible From: https://www.aicpa.org/membership/join/pfs-exam.html
