The certified public accountants with the personal financial specialist credential who pushed to add financial planning to the CPA exam are calling for more of their peers to work in both fields.
At the beginning of the year, the American Institute of CPAs included questions about "personal financial planning" topics relating to investing, retirement, insurance and other areas of wealth management in a section of the test for the first time. The change is fueling hopes among some CPA planners that more current and aspiring tax professionals will join the burgeoning convergence between the two fields by providing holistic wealth management services, according to two of the financial advisors who advocated for the new exam questions, Jean-Luc Bourdon of Santa Barbara, California-based Lucent Wealth Planning and Michael Velazquez of Weston, Florida-based Velazquez and Associates.
"Inertia is powerful. People don't like change. Over time, the CPA exam has become more and more difficult — the knowledge base required has expanded, and so there's always a reluctance to add even more," Bourdon said in an interview. "However, the mandate is always for the exam to be relevant to a new practitioner. … The reluctance I think really came from the fact that, for decades, the primary job channels within the CPA profession focused on audit and tax, and so the CPA exam reflected that."
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CPA holders of the personal financial specialist credential who have been practicing for decades "feel relieved and vindicated that this has finally taken place," Velazquez said in an interview. While representatives for the AICPA said that the current number of personal financial specialists was not immediately available, Velazquez estimated as a former member of the organization's Executive Committee for Personal Financial Planning that the figure was around 6,500 to 7,500 when he finished his tenure in 2019 and still under 10,000 today.
"It seems like the natural progression of this profession is to embrace financial planning as an outgrowth of your tax practice. If you don't feel that way, it's almost tantamount to malpractice," Velazquez said. "To intentionally or otherwise miss that opportunity in the marketplace I think is just egregiously negligent."
In addition to being a CPA with the planning specialization, Velazquez is also a certified financial planner. Representatives for the CFP Board said the share of 100,000 CFPs nationwide who are also CPAs was not immediately available. The organization devotes a page on its website to any CPAs wondering how getting the CFP mark could complement their existing certification, and 14% of its exam relates to tax planning.
"Tax planning is a core area covered in the CFP certification exam and is one of the eight 'Principal Knowledge Domains' taught in CFP Board Registered Programs," John Loper, managing director of professional practice for the CFP Board, said in an email. "While the CFP exam does not test specific tax preparation details, candidates for CFP certification must understand the tax implications of their financial advice recommendations for clients. Many CFP professionals also hold CPA credentials — this powerful combination allows the financial planner to offer comprehensive tax and financial planning advice. Through CFP Board's accelerated path to certification, CPAs can bypass all coursework except the capstone course. CFP Board currently has no plans to introduce any tax specialties/certificates beyond what's covered in the comprehensive CFP certification exam."
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The prospects for professional development at the intersection of tax and wealth services look brighter with the CPA exam's new planning questions, accelerating numbers of M&A deals touching the two fields at once and more acknowledgement across the industries at large. For example, the planning track of the AICPA Engage conference this June — the annual gathering of practitioners that Nerd's Eye View blog writer Michael Kitces has referred to as "the other world" of the financial planning profession — made his list of the 10 best events for advisors in 2024.
"The reality is that as financial advisors are increasingly migrating toward a deeper level of estate and tax planning advice, the CPA world has been migrating increasingly towards financial planning. Which isn't entirely new — in practice, many of the largest RIAs today were formed by former CPAs who broke out of the HNW planning divisions of big-8 accounting firms back in the 1980s and 1990s to form their own wealth management firms," Kitces wrote last year. "The significance of the PFP track at AICPA Engage is that it's not 'just' another financial planning conference from an industry association; given the AICPA's deep roots in tax (as the membership association for CPAs), it has a particularly deep technical focus (as the base knowledge to become a CPA forms a high bar for a continuing education conference to build upon!), and an especially strong focus on advanced tax planning in particular."
Even with those signs of the ties between the two fields, many CPAs still balk at the notion of moving into an area of services in which they think they'll take the blame for any downturns, according to Velazquez. Those tax professionals may be failing to understand that with "so many false prophets out there, so many wolves disguised as sheep" pitching risky or fraudulent investments, a CPA can be "the best person to advise a client on their finances," he said.
"Some of them have such an aversion to being drawn into that circle," Velazquez said. "It still doesn't surprise me to hear that they think that this is all just about investments and playing the stock market."
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As the accounting and wealth management industries confront the challenge of recruiting the next generation of advisors and tax professionals, the presence of planning on the CPA exam could help attract students who "more so than ever are looking for impactful professions that are incorporating social awareness," Bourdon said. Many university accounting programs "logically focus on teaching their students what's on the exam," he said.
"The topic needs at least to be acknowledged," he said. "I might be biased on this, but it's the most exciting possibility the profession offers. Being squeamish about blood, I could not be a physician. I think being a wealth manager is the greatest good I can do. I cannot save anyone's life, but I can make a significant difference in their life as a wealth manager."
