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Why CPAs should become CFPs before calling themselves ‘planners’

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The number of CFP professionals in the United States has grown by leaps and bounds in recent years. How the CFP Board did that is no secret: We boosted consumer awareness and relevance of the CFP certification and have made it the must-have designation for anyone delivering financial planning and advice.

The American Institute of Certified Public Accountants wants to do something along the same lines. They are encouraging their members to start calling themselves “CPA financial planners,” regardless of whether or not they have a demonstrated competency in financial planning.

Much of the work a CPA does is retrospective and even historical in nature. Of course, it’s not all number crunching, but there is a very strong financial autopsy aspect to the work of CPAs. It’s just the nature of the important services CPAs deliver.

“I respect CPAs as much as anyone, particularly when it comes to unsnarling a complicated tax issue... However, it’s no mystery that what it takes to become a CPA is different from what it takes to become a CFP professional.”

Contrast that with CFP professionals who must take a more holistic and future-focused approach to a person’s overall financial picture, not just their taxes. They ask such big-picture questions as: What are your overall financial needs? Where do you want to be in 10 and 20 years? What kind of financial goals do you have and how will a well-diversified portfolio and strategies make them a reality? In this way, the CFP professional focuses much more on where you are going than where you have been when it comes to your overall finances.

I respect CPAs as much as anyone, particularly when it comes to unsnarling a complicated tax issue. And there are many CPAs who have seen fit to get the CFP certification. In fact, nearly one out of 10 CFP professionals are also CPAs. The CFP certification and CPA license represent two great brands that consumers trust and two distinct bodies of knowledge.

However, it’s no mystery that what it takes to become a CPA is different from what it takes to become a CFP professional. There are overlapping areas in which CFP professionals and CPAs are trained and required to demonstrate competency. CPAs who want CFP certification must still pass the CFP exam and meet CFP Board’s certification requirements. The reverse is also true. If I am a CFP professional who wants to be a CPA, I must pass the CPA exam and get my license.

This fundamental difference between CPAs and CFP professionals reflects what the public already understands. When you think of a financial planner, you think of a CFP professional. When you think of an accountant, you think of a CPA. That’s the level at which real people make their decisions about who to turn to for help. And that is why the CPA license is enhanced in a meaningful way by the CFP certification, which takes a 360-degree approach to the financial issues that impact individuals and families.

The AICPA has acknowledged that additional training in financial planning should be required before CPAs can be recognized as competent financial planners. The existence of the AICPA’s Personal Financial Specialist designation is the most persuasive possible evidence that simply calling yourself a “financial planner” does not make you one.

The good news for CPAs is that CFP Board welcomes them with open arms. CFP professionals are not in conflict with CPAs, and this is not the story of two groups quarrelling over the definition of what it means to be a “financial planner.” Instead, it’s about how two organizations are working in their own ways to meet the many and diverse needs of tens of thousands of financial professionals and the millions of U.S consumers who depend on those professionals.

We will continue to pay AICPA the respect it deserves, and we will keep our focus on making the CFP certification the best it can be. The marketplace of consumers and financial professionals can — and does — sort out the rest.

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