A new road map for CPAs' professional conduct when providing PFP services.

• Author: Sarenski, Theodore J.
• Position: Personal financial planning

WITH THE GROWING IMPORTANCE OF standards and the increased demand and growth in personal financial planning (PFP) senices comes the need to formalize CPAs' responsibilities. If AICPA members advise clients in estate, retirement, investment, and/or risk management planning, it is important that they understand the new Statement on Standards in Personal Financial Planning Services (the statement) that was issued in January and will be effective July 1, 2014. The statement provides a road map to help them practice competently and confidently when providing PFP services.

The Personal Financial Planning Executive Committee (PFP EC) is the AlCPA's senior committee designated to promulgate enforceable standards of PFP practice. The PFP EC issued the statement to provide guidance to members and a framework for delivering PFP services that is built on the cornerstone of the CPA profession-- the public interest--and aligns with the AICPA Code of Professional Conduct (the code), which upholds the highest levels of integrity, professionalism, objectivity, and competence.

The CPA must address his or her relationship to the statement by asking several key questions: * Am I holding out that I am performing PFP services?

* Am I in fact performing PFP services?

* If I am performing these services, must I care about the statement and what it requires?

* What exactly does the statement expect of me and my practice?

CPAs can start by asking themselves: Who are their clients? What is their client base? If their client base includes individuals and families, they inevitably will he asked questions such as:

* How can I manage my resources to care for my present needs, my children, and mv retirement?

* What should I be doing about college funding for my kids?

* How will I ever be able to retire? How much should 1 be saving? How much can I withdraw annually from my savings when 1 retire?

* Should I have life insurance? How much? Where should the cash come from to pay the premiums? Who should own the policy? Should it he held in a trust?

* Should I make lifetime gifts to my children and grandchildren.- How do I coordinate this with my will? How do I share my estate?

* How do 1 balance our family charitable giving goals with my retirement objectives?

* Beyond the potential tax cost of exercising my company stock options, how should I incorporate them into my long-term personal financial planning?

These questions and many others like them arise from clients seeking a CPA's assistance with PFP issues and services.

Are CPA Responses to the Clients' Questions the Performance of PFP Services?

When members' clients raise questions and issues such as those above, how do they respond?

PFP services are defined in the statement as "the process of identifying personal financial goals and...