The CPA (Certified Public Accountant) designation is a well-known credential in the financial field. Candidates for it must first earn a bachelor’s degree in a relevant discipline such as business, finance, or accounting. Next, they must work for at least two years in public accounting and complete 150 hours of related education. Finally, they must pass the certification examination administered by the American Institute of Certified Public Accountants (AICPA), a professional organization with over 428,000 members in 130 countries.
CPAs provide a wide range of accounting services, typically including financial statement preparation and oversight for individuals, businesses, nonprofits, and governmental entities. Most can audit financial statements and may be qualified to provide tax preparation assistance.
However, not all CPAs have experience in all financial areas. For example, a CPA who specializes in tax issues may not be the right one to consult on a matter concerning a fraud investigation. The AICPA offers specialty credentials to its members in numerous fields:
- Financial Forensics
- Personal Finance Specialist
- Business Valuation
- Information Technology
- Entity and Intangible Valuations
- Financial Instrument Valuation
To receive the Personal Finance Specialist designation, the CPA must hold a CPA license and be a member of the AICPA. In addition, they must complete at least 75 hours of continuing education from the AICPA offerings in personal finance for a standard specialty title (105 hours for an Experienced designation), work within the field, and pass a specific subject matter examination.
Does It Make Sense to Choose a CPA for Financial Planning?
Choosing your financial planning advisor is personal, whether you hire one with a CPA or a CFP (Certified Financial Planner), or an investment adviser with no certifications. Your advisor will need to know your goals, what motivates you, and even what keeps you awake at night. Considering potential candidates with specific credentials is a valuable tool for narrowing down the options, but you should go further. Ensure that you select an advisor with experience in the areas relevant to your needs. For example, if you run a business that does a lot of work in other countries, your advisor should understand the financial impact of that revenue stream. If your philanthropic endeavors are your top priority, ensure that you engage a financial planner who understands the intricacies of charitable giving. Your advisor should be well-versed in these basics:
- Investments
- Budgeting
- Insurance
- Tax planning
- Retirement planning
- Estate planning
How Do They Get Paid?
With any financial planner, this is a crucial question. It is often at the heart of a discussion over fiduciary responsibility—which is an expectation that they will put the client’s interests ahead of their own. The Center for Fiduciary Studies states that a fiduciary “stands in a special relationship of trust, confidence, and/or legal responsibility” to the person for whom they manage assets or provide investment advice. Registered Investment Advisors have a duty to act as a fiduciary, but CFPs and other advisors may not. In addition, if an advisor is paid for their services by commission rather than on a flat fee or hourly basis, they may have a less objective perspective.
While accountants are generally not considered to be in a fiduciary position relative to their clients (because they also have a duty to the public, according to the AICPA), their professional code of conduct requires that they act with objectivity, integrity, free of conflicts of interest.
