Magazine article The CPA Journal

Specializing in Personal Financial Planning

Magazine article The CPA Journal

Specializing in Personal Financial Planning

Article excerpt

The AICPA Personal Financial Planning Division operates under the leadership and direction of the Personal Financial Planning (PFP) Executive Committee, chaired by James A. Shambo.

The Division is the first and presently only division of the AICPA to offer specialist accreditation in its field. By passing the one-day exam, providing required references, demonstrating 750 hours of practice in the area of personal financial planning in the three prior years, and continuing to practice to the extent of 250 hours in each subsequent three-year period, a CPA can hold himself or herself out to the public as a Personal Financial Specialist(PFS). The PFS designation is used in combination with the CPA credential, i.e., CPA/PFS.

Approximately 900 CPAs presently hold the PFS accreditation.

Personal financial planning is an area of a CPA's practice that is especially important for helping high-net-worth individuals. Accordingly, for this year's high-net-worth special issue of he CPA Journal, Managing Editor James L. Craig, Jr., met with five members of the PFP Executive Committee to discuss financial planning as a practice area and the benefits to practitioners of holding the PFS designation. The five panelists are Lyle K. Benson, Jr., of Coyne & McClean Chartered; Stanley H. Breitbard, of Price Waterhouse; Stuart Kessler, of Goldstein, Golub, Kessler & Company, P.C.; Kaycee W. Krysty, of Moss Adams, and James A. Shambo, of Sanden, Shambo 7 Anderson, P.C. Biographical sketches of the panelists are presented as a sidebar to the discussion.

The CPA Journal: All of you are active in providing or supervising personal financial planning services to clients of your firms. Let's begin our discussion by learning about the nature of personal financial planning engagements as CPAs I presently undertake them. Is there a typical engagement for CPAs?

James Shambo: I don't think there is a typical engagement. Some clients are looking for advice in a very narrow context--how to best finance the acquisition of a specific asset. Others are seeking advice on a more global basis--how to accumulate assets to provide for a comfortable retirement and still provide for spouse and children. My approach is more educational--to help the individual develop a strategy to implement on his or her own or with the assistance of other advisors.

Stanley Breitbard: What we typically do is start by defining the engagement. What are the needs? What are the objectives? Is it a comprehensive review of all the family's finances, or perhaps a more narrow look at some investment alternatives? We obtain an engagement letter. Then we gather the data and perform a the engagement.

CPAJ: hat is the product of the engagement? Is it usually some form of written report?

Breitbard: In the past the financial plan was often viewed as the end product or result. We are now trying to change that mentality to say that the plan is the intermediate step along the way. The end product should be the implementation of the plan and, ultimately, the accomplishment of the objectives. It means an ongoing relationship with the planner and the client over a period of years. The engagement is not the delivery of the plan to the client and walking away. This approach to planning was very often the one taken by the salesman who had a product to sell. Here's the plan, now buy the insurance or the mutual fund.

Stuart Kessler: The process, after the objectives are established, is information is gathering, information analysis, a preliminary or first conference with the client couple--it is important that both spouses be present--preparation of a preliminary report, a second meeting with the couple to go over the recommendations, and then implementation. The follow-up on implementation can go in various directions. Implementation for some planners, especially those that are registered investment advisors, will include investment advice. …

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