Enhance your tax practice with PFP services.

• Author: Williams, Jimmy J.

Auditors. Tax preparers. Trusted advisers. These are a few of the titles referring to CPAs that have historically described our profession. However, our tax clients are seeking CPAs in an expanded role to fill a void and bridge a chasm between the overall financial security they desire and the tax planning they need.

A historical perspective

My career started, as I had planned, as a tax consultant advising business clients on tax planning and strategies to mitigate their overall cost of operations and help them retain their wealth so it could eventually be transferred to their heirs. After my second year in public accounting, many clients--and the firm's partners--began asking whether we could offer more comprehensive services in other critical life stages rather than just preparing tax returns.

In the early 1990s, my passion for personal financial planning began in earnest. After searching for guidance and education, I quickly realized that tax and financial planning services would complement each other. Most of the individuals I assisted with tax services were members of high-net-worth families, and various financial subjects inevitably arose during our meetings.

The AICPA Personal Financial Planning (PFP) Section was an invaluable resource for helping me gain experience and education in financial planning. The PFP Section, which was created in 1986 through a collaboration of financial planning professionals and the AICPA, became a repository of information for CPAs desiring to learn and grow their practices.

One of the PFP Section's resulting technical projects was creating the Statement on Standards in Personal Financial Planning Services. These standards provide a framework of ethical and technical considerations for providing PFP services. Practitioners who meet these standards show clients they have achieved a sufficient level of integrity and quality in their professional services.

Similarly, AICPA member tax professionals are subject to the Statements on Standards for Tax Services, promulgated by the AICPA Tax Executive Committee. These enforceable standards for providing tax services can give the public confidence that a high degree of professionalism supports the services and information they receive addressing their tax concerns and circumstances. Many practitioners may be unaware of which standards apply to their services.

Personal financial planning and tax services are highly correlated to one another in a client engagement. For example, one must understand how the tax laws affect a client's income and assets to properly report a personal financial statement used for cash flow or estate planning. Conversely, to provide high-quality tax services, a CPA must understand and apply financial planning principles and standards...