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WHY A PFS

Personal Financial Specialist (PFS)

Local CPA, Rebecca Parks, Awarded Elite Credential

February 2024

 

Rebecca Parks, CPA/FPS has been awarded the Personal Financial Specialist (PFS) credential by the American Institute of Certified Public Accountants.

Parks came to Richard E. Overman CPA, PA in November 2004. She became a licensed Certified Public Accountant in 2013, and a partner at the Firm in 2016

In 2019, Parks began working to meet all the requirements to attain the PFS credential. Parks completed 7,000 hours of PFP-related experience, 105 hours of PFP-related continuing education and passed a comprehensive exam. She received the official news on February 1, 2024, that she was awarded the PFS credential. 

According to AICPA, there are currently less than 5,100 CPA/PFS in the nation. Less than 150 of those are from North Carolina. In North Carolina, less than 50 of these are women. 

“We are very proud of Rebecca for achieving this elite credential. The body of knowledge that she has absorbed to pass this exam will serve well as a platform to help clients in areas beyond our traditional tax planning process. She has faithfully served our clients for so many years and we look forward to seeing how this new credential will serve our clients in many new and helpful ways!” – Ricky Overman, CPA

Giving Clients Confidence

“The current environment can feel unsettling. From an unexpected health crisis to a significant increase in market volatility, clients are likely feeling uneasy. Couple the current crisis with changing client needs and wants, the demand for objective, sound personal finance advice is greater than ever. Clients are looking for a primary point of contact to help ensure they are making smart financial decisions now and that they are planning strategically for their future, so they can achieve their goals and dreams.” (aicpa-cima.com)

 

Why CPA/PFS?

“As a CPA financial planner, you are best positioned to meet this increased demand. The CPA/PFS credential lets clients and prospects know that you:

  • Specialize in providing tax, retirement, estate, risk management and investment advice to individuals, families and business owners

  • Provide objective advice and are held to high ethics and standards

  • Bring a deep tax knowledge and business acumen to the table

  • Coordinate all aspects of personal finance

The CPA/PFS is based on a professional body of knowledge and allows you to set yourself apart from other financial planners as it is the only credential for CPA financial planners that recognizes the values that CPAs bring to client relationships.” (aicpa-cima.com)

 

What’s the process?

“There are multiple ways to earn the CPA/PFS credential. Study for the comprehensive exam using the Fundamentals of PFP and take the exam in one sitting. You can also choose to learn in smaller bites and prove your knowledge by completing the PFP Certificate program. Or, take the path to the PFS with the new Experienced CPA Pathway.

In addition to the exam requirement, for the standard and certificate method, you’ll need to have 3,000 hours of PFP-related experience within the past 5 years (1,000 can be in tax compliance) and 75 hours of PFP-related continuing education. For the experienced pathway method, you’ll need to have 7,500 hours of PFP-related experience within the past 7 years (2,000 can be in tax compliance) and 105 hours of PFP-related continuing education. Learn more about earning the CPA/PFS credential today.” (aicpa-cima.com)

 

PFP Body of Knowledge

 

The Personal Financial Planning (PFP) Body of Knowledge (BOK) is an outline of the technical knowledge that a CPA financial planner should be expected to know to competently practice in personal financial planning.

The complete PFP Body of Knowledge outline can be downloaded as a PDF document. (us.aicpa.org)

For CPAs practicing or desiring to practice in personal financial planning: It provides a roadmap for the various technical competencies that can guide their professional development. We recognize that not all CPAs planners will be experts in all areas, but this outlines the areas in which a fundamental level of knowledge and awareness of the

interconnectedness of the major topics is crucial for making competent recommendations.

 

For CPAs preparing for the Personal Financial Specialist (PFS) exam: It provides a guide for exam takers to ensure they are studying appropriate topics for the PFS exam. The range of coverage (percent of total exam) is identified for each major topic in the BOK so exam takers know what to expect. They can have confidence that this will guide their review regimen because both education authors and PFS exam writers use this outline as a basis for their work. The first exam covering this updated PFP Body of Knowledge will be July 2021.

Note: All eligible work experience and education for the PFS credential requirements must fall within the twelve practice areas comprising the PFP Body of Knowledge.

 

Integration of Income Tax Planning: Individual income tax planning is an integral part of personal financial planning. In previous iterations of the PFP BOK, it has been included as a separate major topic. This approach did not adequately demonstrate the integration of income tax planning within the individual topics throughout the PFP Body of Knowledge. In response to this, the current PFP Body of Knowledge addresses individual income tax planning in the following manner:

Following is a guide to help apply the twelve major topics of the PFP Body of Knowledge in practice (from the PFS Credential Application Kit):

1. Personal Financial Planning Process

  • Applying any and all steps in the standard financial planning process to clients

  • Gathering data and helping clients establish their financial goals

  • Building rapport with client and addressing family dynamics in the client relationships

2. Professional Responsibilities and Legislative and Regulatory Environment

  • Applying the principles of the Statement on Standards in Personal Financial Planning Services to any aspect of the client relationship

  • Complying with any requirements for licensing with the state or federal authorities for the services or products provided

3. Fundamental Financial Planning Concepts

  • Reviewing income and spending patterns; developing recommendations for cash flow management and budgeting

  • Performing “time value of money” calculations for decisions such as refinancing a home or buying vs. leasing a motor vehicle

  • Determining strategies for tax liability management

4. Estate Planning

  • Helping clients develop or refine their financial and personal estate planning goals

  • Estimating liabilities for federal estate tax, state death taxes and other obligations; determining cash needs upon death

  • Developing recommendations to meet financial obligations upon death

  • Reviewing tax and probate considerations of various forms of property ownership; making recommendations on the titling of assets

  • Developing strategies for minimizing estate and death taxes and achieving the clients’ other estate-planning goals

  • Recommending or reviewing various instruments (e.g., wills, powers of attorney, trusts) for use in achieving goals

  • Planning for post-mortem succession of a closely held business (e.g., buy-sell agreements, estate freeze techniques, valuation issues)

5. Charitable Planning

  • Evaluating clients assets to use for charitable giving

  • Determining the advantages and disadvantages of charitable giving through different vehicles (e.g., charitable trusts, life insurance)

  • Summarizing income tax consequences of various charitable giving options

6. Risk Management Planning

  • Analyzing client exposure to risks and recommending methods for managing risk

  • Advising clients on various types and uses of life insurance

  • Helping clients minimize their financial risks from disability, illness, property damage, and personal liability

  • Planning for long-term health care for clients and their families

  • Reviewing proposed policies to ensure clients’ needs are satisfied

  • Reviewing income and estate tax aspects of insurance coverage with client

7. Employee and Business-Owner Planning

  • Analyzing and making recommendations on executive compensation and stock options

  • Evaluating or reviewing various benefits (equity, fringe, insurance) available to employees of public and private companies

  • Examining tax implications of benefits for employer and employees

  • Planning with business owners on decisions about their business that affect their current or future personal financial goals

8. Investment Planning

  • Year-end capital gain/loss recognition planning; deferral of capital gain strategies

  • Reviewing client investment preferences and risk tolerance to help them develop appropriate investment strategies

  • Discussing available investment options with clients

  • Monitoring the performance of invested assets

  • Providing asset allocation recommendations

  • Recommending investments or helping clients build portfolios

  • Managing client assets

9. Retirement and Financial Independence Planning

  • Helping clients develop or refine retirement planning goals; determining cash requirements to realize those goals

  • Calculating savings needed to meet retirement cash requirements and analyzing available retirement plans

  • Reviewing limits on and tax consequences of contributions to or distributions from retirement plans

  • Establishing retirement plans

  • Planning for retirement plan withdrawals

  • Assisting clients with maximizing their Social Security benefits

10. Elder, Special Needs, and Chronic Illness Planning

  • Helping clients understand the variety of care options that are available to them

  • Analyzing financial aspects and assisting clients with housing related decisions

  • Providing bill-pay or other personal financial services for clients

  • Developing plans to address current and future financial expenses for special needs clients

11. Education Planning

  • Assisting clients with understanding the education planning process

  • Developing recommendations for education funding strategies

  • Assessing income tax implications for education funding strategies

12. Special Situations

  • Defining clients' housing goals

  • Planning income needs and evaluating division of assets during a divorce

  • Advising clients on household employees”

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"As a 91 year old widow, I don’t know anybody that I’d rather have between me and the IRS!"

- Helen

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