Personal Financial Specialist (PFS)

What Is a Personal Financial Specialist (PFS)?

A Personal Financial Specialist (PFS) is a certification for certified public accountants (CPAs) that permits them to extend their expertise and offerings to incorporate financial planning and wealth management.

The American Institute of Certified Public Accountants (AICPA) laid out the Personal Financial Specialist (PFS) qualification, which is held for CPAs, importance holding a CPA is an essential.

There are both educational and professional requirements that must be met before earning a PFS. In any case, the benefits of holding a PFS are various, which incorporate expanded employment opportunities with corporations, counseling firms, and the ability to oversee or possess a wealth management practice.

Grasping a Personal Financial Specialist (PFS)

A Personal Financial Specialist (PFS) certification is solely conceded to CPAs. As indicated by the AICPA, a PFS certification addresses "a strong combination of broad tax expertise extensive information on financial planning."

PFS candidates study estate planning, retirement planning, investing, insurance, and different areas of personal financial planning. Individuals with the PFS assignment might work for accounting firms, counseling firms, or deal with their own firm.

Earning the Personal Financial Specialist (PFS) means that individuals have earned the right to utilize the PFS assignment with their names, which can further develop job opportunities, professional reputation, and pay.

Personal Financial Specialist (PFS) Requirements

There are four major requirements that are important to accomplish a personal financial specialist assignment, including a CPA license, education, a predetermined level of experience, and breezing through an examination. A portion of those requirements are illustrated below:

CPA License and AICPA Member

Candidates must get or hold an unrevoked and substantial CPA certification that has been issued by a state. The candidate must likewise be a current Regular member of the AICPA.

Education and Experience Requirements

There are two pathways that candidates can browse, contingent upon their level of experience.

The Standard and Certificate pathway has the following requirements:

Have no less than two years of full-time educating or business experience (or 3000 hours equivalent) in personal financial planning inside the five years previous to applying for CPA/PFS
As long as 1,000 hours of tax compliance experience can count towards the total experience required for the PFS
At least 75 hours of personal financial planning education in the five years going before application for the PFS

The Experienced pathway has the following requirements:

Have five years of full-time experience (or 7,500 hours equivalent) in personal financial planning
The AICPA states that as long as 2,000 hours of tax compliance experience can count towards the total experience required for the PFS
Earn at least 105 hours of personal financial planning education inside the seven-year period going before the application date

As per the PFS certification handbook, no matter what the pathway, the education and experience must be in any of the 12 areas that make up the personal financial planning (PFP) Body of Knowledge. The AICPA offers educational courses for personal financial planning covering the points inside those 12 areas. Notwithstanding, certain approved courses from an accredited university or college might be accepted as substitutes.

PFP Body of Knowledge

The 12 areas that include the PFP Body of Knowledge for the education and experience requirements are listed below:

Personal Financial Planning Process: Includes assisting clients with laying out financial objectives, gather data, and build client connections
Professional Responsibilities, Legislative, and Regulatory Compliance: Includes following any licensing requirements from state and federal specialists
Fundamental Financial Planning Concepts: Includes budgeting, breaking down cash flow, income, and spending designs
Estate Planning: Includes laying out an estate financial plan to determine cash needs in the event of death and potential tax liabilities
Charitable Planning: Involves determining the assets to be allocated for charitable giving and the different types of products accessible, like trusts and life insurance
Risk Management Planning: Includes determining a client's financial risks, including disability, illness, and property damage, as well as evaluating the accessible products to moderate those risks
Employee and Business Owner Planning: Includes executive compensation, options, the different benefits accessible for employees, and tax suggestions
Investment Planning: Involves the survey of a client's capital gains and losses, risk tolerance, and investment inclinations to determine a proper investment strategy
Retirement and Financial Planning: Includes determining a client's cash needs in retirement, financial objectives, and the savings expected to meet those objectives
Elder and Chronic Illness Planning: Includes assisting clients with grasping the different care and housing options while fostering a plan for financial costs
Education Planning: Involves helping clients with education planning and funding techniques
Special Situations: Includes characterizing housing objectives, income needs and determining the division of assets in the event of a separation

Continuing Education

Likewise, at regular intervals, PFS professionals must complete 60 hours of continuing professional education. Every year, they must pay a fee of several hundred dollars to keep utilizing the assignment.

A personal financial specialist (PFS) assignment offers CPAs the ability to stand apart from other financial planners while offering clients an expert who can foster a balanced financial strategy.

Personal Financial Specialist (PFS) Exam

The exam requirement for the PFS is broad, covering the financial planning interaction and professional obligations with subjects like tax, retirement, investments, insurance, and estate planning.

The PFS exam comprises of 160 inquiries, half of which are standalone numerous decision, while the remainder incorporates case studies with going with various decision questions. These incorporate short situations followed by 2-5 various decision questions and longer cases with 12-18 related different decision questions.

The AICPA gives a short video instructional exercise that includes a fake exam session. The exam can be taken at one of the testing centers or online with a PC or through a delegated exam by means of webcam. Candidates are allocated five hours to complete it, as well as a 30-minute break.

Exempt from the PFS exam are CPAs who have passed the Certified Financial Planner (CFP) or Chartered Financial Consultant (ChFC) exams. They are considered to have met the exam requirement.

Benefits of a Personal Financial Specialist (PFS)

Benefits exist for the people who hold a PFS certification and clients searching for a financial professional to assist them with fostering a financial plan as long as possible.

Professionals can display their financial expertise by exhibiting their insight into financial planning, which can assist with drawing in new clients. The PFS certificate can upgrade a professional's reputation and professional brand, in this manner further developing career opportunities with the capability of helping income. An additional benefit to the PFS is that candidates know about financial planning, however they have broad tax and corporate finance expertise as a CPA.

A CPA who holds a PFS can be especially beneficial for clients who are hoping to foster a financial plan that lines up with their long-term objectives while likewise getting the benefit of tax and accounting services. One more benefit to clients is that they gain access to an expert in elder professional and estate planning and wealth preservation and retirement income.

PFS versus CFP

Albeit the personal financial specialist and certified financial planner (CFP) have numerous likenesses, there are distinct differences between the two assignments. CPAs with a PFS certification have a balanced information on accounting, tax, financial statements, and wealth management. Nonetheless, a CFP is viewed as a type of financial advisor since it is given out by the Certified Planner Board of Standards, Inc.
Subsequently, there is a fiduciary responsibility that CFP's must stick to, meaning they must give financial counsel that is to the greatest advantage of their clients. CFPs must follow a severe code of ethics as framed by the Certified Planner Board of Standard's code of ethics.

Like a PFS assignment, to earn a CFP, an individual must have 6,000 hours of professional experience and hold a four year college education from an accredited university. Likewise, both the CFP and PFS certifications permit candidates to defer a portion of the requirements in the event that they hold a CFA. Be that as it may, the CFP doesn't expect candidates to have a prior certification, which stands out from the PFS essential of holding a CPA certification.

The benefits and employment opportunities of holding a CFP in PFS are various, and the two certifications offer careers in personal financial planning, retirement, and tax planning. While a CFP permits an individual to offer investment planning, a PFS permits an individual to offer financial management at a corporate finance level due to the CPA certification.

Features

There are requirements to accomplish a PFS assignment, including a CPA license, education, a predefined level of experience, and breezing through an examination.
A Personal Financial Specialist (PFS) is a certification for certified public accountants (CPAs), permitting them to extend their expertise to incorporate financial planning and wealth management.
An additional benefit to the PFS is that candidates realize financial planning yet additionally have broad tax and corporate finance expertise as a CPA.
Individuals with the PFS assignment might work for accounting firms, counseling firms, or run their own wealth management practices.
PFS candidates study estate planning, retirement planning, investing, insurance, and different areas of personal financial planning.