Financial planning

A decrease in loan delinquencies, coupled with an increase in job openings, has boosted Americans’ satisfaction with their finances, a new AICPA economic index revealed.

The Personal Financial Satisfaction Index (PFSi), results of which were released for the first time in January, stands at +6.6 in the fourth quarter of 2014, its highest level since 2007. The PFSi rose 6.5 points over the previous quarter and 14.9 points over the fourth quarter of 2013, indicating that the economic recovery is improving the finances of the average American. While the index results were released publicly for the first time in January, the AICPA calculated the PFSi retroactively to provide perspective. Details are available at

 “After years of feeling personal financial pain, the continued growth of the stock market, increases in available jobs, and a sharp decrease in consumer loan delinquencies are moving Americans’ finances into positive territory,” Jeannette Koger, CPA, CGMA, AICPA vice president–Member Specialization & Credentialing, said in a news release. Koger also observed that the PFSi can help spark conversations between financial planners and their clients.

The PFSiwhich is calculated using both proprietary and official U.S. government data, is designed to gauge the financial standing of the average American. A positive PFSi reading suggests that Americans’ assets and opportunities for financial growth have increased, while a negative reading suggests the opposite.

A decrease in loan delinquencies from 3.8% to 2.9%, including delinquencies on credit card and mortgage loans, was most responsible for this quarter’s improved PFSi score. The second most important factor raising the score was the increase in job openings from 4.0 million to 4.8 million, followed by improvements in the stock market reflected in the PFS 750 Market Index.

The PFSi also received a boost from reduced underemployment and increased real home equity per capita.


- Adding personal financial planning (PFP) services can help a CPA firm attract and retain clients and increase its revenue, the AICPA’s recent Economic Benefit of PFP Services survey found.

Almost half (49%) of the CPAs who responded to the survey said their firm offers PFP services. Of those that offer PFP services, 91% also offer other services to clients, while 9% exclusively offer financial planning. More than 2,400 CPAs responded to the survey.

Sixty-three percent of respondents in the survey who had added PFP services to their firms’ other offerings said doing so improved their ability to attract new clients.

Financial planning draws new clients because there’s a great untapped need for it in the marketplace, said Susan Tillery, CPA/PFS, president and CEO of Paraklete Financial and chair of the task force that produced the survey. Baby Boomers seeking assistance with retirement planning are driving the increased demand for financial planning. Plus, as tax compliance and investment management turn into commodities, integrated planning in the areas of retirement, estate, tax, investments, and risk management becomes a value-added service.

But clients across all generations want more from their CPAs, said Jonathan Gassman, CPA/PFS, the CEO and founder of The Gassman Financial Group and co-founder of wealth management firm G&G Planning Concepts. “They are looking for independent, objective advisers to help them make smart choices about their money,” said Gassman, who also is a member of the survey task force. “CPAs are probably in the best position of any type of adviser to provide this kind of counsel, because of our wide experience and knowledge of areas like tax, estate planning, and cash flow planning.”

Financial planning services also help firms hold on to clients, the survey found. When asked how such services changed their relationship with clients, 65% of respondents who had added PFP services to their offerings said it expanded the scope of services and engagement with their clients, and 54% indicated clients’ appreciation of their services increased. Financial planning increases retention, Gassman said, because it allows firms to have a “stickier” relationship with clients. “It enables you to make a bigger difference in their lives beyond just meeting their tax needs,” he said.


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