AICPA issues personal financial planning standards

January 21, 2014

The AICPA on Tuesday issued additional authoritative guidance for CPAs who offer personal financial planning services.

The AICPA Statement on Standards in Personal Financial Planning Services covers all aspects of the planning process—from obtaining information to communicating and implementing recommendations. The standards, which will take effect July 1, require complete transparency on factors such as compensation and potential conflicts that could influence client decision-making.

The vast majority of state boards of accountancy adopt AICPA standards, giving them the force and effect of law. Therefore, even CPAs who are not members of the AICPA need to be aware of the AICPA standards that their state board of accountancy has adopted.

“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 (PFP) Section. “These standards provide a clear road map 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.”

Growth in areas such as estate, retirement, risk management, and investment planning helped drive the need for the additional authoritative standards. Membership in the AICPA PFP Section has increased 32% over the past five years—growth that tracks national trends. The Bureau of Labor Statistics projects the number of personal financial advisers will increase 27% nationwide between 2012 and 2022.

The standards are based on, and will supersede, the AICPA Statement on Responsibilities in Personal Financial Planning Practice, which was first adopted in 1992. Questions about the new rules can be directed to the AICPA PFP Division staff.

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