January 22, 2014

AICPA Updates Guide for Growing Ranks of CPA Planners

AICPA’s personal financial planning section has grown 32% in the past five years

More On Legal & Compliance

from The Advisor's Professional Library
  • RIAs and Customer Identification Just as RIAs owe a duty to diligently protect their clients’ privacy and guard against theft, firms also play a vital role in customer identification. Although RIAs are not subject to an anti-money laundering rule, securities regulators expect advisors to address these issues in their policies and procedures.
  • Pay-to-Play Rule Violating the pay-to-play rule can result in serious consequences, and RIAs should adopt robust policies and procedures to prevent and detect contributions made to influence the selection of the firm by a government entity.

The American Institute of Certified Public Accountants issued on Tuesday additional guidance for CPAs who also offer financial planning services.

Noting that membership in the AICPA’s personal financial planning (PFP) section has grown 32% in the past five years, the AICPA issued the guidance to provide planners that hold its Personal Financial Specialist designation with more “authoritative standards” for growth areas such as estate, retirement, risk management and investment planning.

The guidance, laid out in the Statement on Standards in Personal Financial Planning Services, will become effective on July 1, and covers all aspects of the planning process, from obtaining information to communicating and implementing recommendations. AICPA says the standards “require complete transparency on factors such as compensation and potential conflicts that could influence client decision-making.”

“CPAs, through state licensure and professional oversight, must meet the highest bar of competency, objectivity and integrity,” said Lyle K. Benson, CPA/PFS, who chairs the executive committee of the AICPA Personal Financial Planning Section, in a statement. “These standards provide a clear roadmap for achieving that benchmark in a rapidly evolving practice area. They are built on the cornerstone of the CPA profession — the public interest — and enhance the consistency and rigor that CPAs are known for in the financial planning discipline.”

AICPA cites information from the Bureau of Labor Statistics, which projects that the number of personal financial advisors will increase 27% nationwide between 2012 and 2022.

The new standards are based on, and will supersede, the AICPA Statement on Responsibilities in Personal Financial Planning Practice, which was first adopted in 1992.

---

Check out How the IRS Can Ruin Your Retirement on ThinkAdvisor.

Reprints Discuss this story
This is where the comments go.