Educating students for expanded financial planning careers

Editor: Annette Nellen, Esq., CPA, CGMA

CPAs and accounting educators have recognized for several decades that, as the profession evolves, it must focus on preparing students for expanded future accounting careers — to ensure their students’ continued value and relevance for years to come. Tax educators face a particularly challenging dilemma as they encounter an increasingly complex and growing body of knowledge, but they have relatively few credit courses or class hours in which to impart such essential knowledge.

Students and traditional employers appear to already perceive this shifting paradigm, as is reflected in recent downward trends in the number of accounting majors, CPA Exam candidates, and students obtaining tax specializations at the undergraduate or graduate level. These trends may also reflect personal characteristics of current Millennials and Gen Z students and young professionals, who are seeking the most interesting and rewarding work/life experiences.

Tax professors and textbooks have been responding to these challenges by increasing the emphasis on tax planning, even within a one-semester, introductory tax course. The AICPA Model Tax Curriculum, most recently revised in 2014, recognizes this importance. The third learning outcome of the model curriculum requires that students learn to “apply analytical reasoning tools to assess how taxes affect economic decisions for individuals and business entities.” The model curriculum appendix further suggests incorporating tax planning cases into the coursework.

But even with this recognition and emphasis, tax planning concepts are difficult to incorporate into a single tax course. Furthermore, tax faculty must remain attuned to the fact that basic tax coverage is still included on the CPA Exam, which some percentage of their students will wish to be prepared for and pass. Additionally, although tax course-incorporated planning concepts are important and clearly of interest to students, such instruction may still be considered relatively rules-based and compliance-oriented to this generation of students. Also, given the limited number of total hours in the accounting discipline that can generally be offered within either an undergraduate or graduate degree program, and in light of the multitude of other business, general education, mission-specific, and/or other leading-edge curricular topics, such as forensics or data analytics, it may not be reasonable to expect most accounting programs to incorporate additional tax classes or hours in tax-designated subjects.

One subject area that integrates well with tax instruction and that appears to be increasingly attractive to students, university administrators, and employers alike, is personal financial planning (PFP). Financial planning strategies rely heavily on understanding and consideration of tax rules and consequences. Interest in PFP is expected to increase among these various constituencies as compliance work becomes less valuable, resulting from more popular and sophisticated “do it yourself”/automated tax preparation programs; a profusion of types of providers offering those services; and growing fee pressures related to transactional and compliance tax services that are reducing profit margins.

Furthermore, the long-held goal of simplifying governmental tax systems, though a seemingly distant reality, may also further decrease the need for compliance and transaction services sometime in the future, further reducing profitability. Therefore, promoting the accounting professional of the future, transitioning from “trusted tax adviser” to “trusted personal adviser,” allows the CPA to serve in a much broader financial adviser role, moves CPAs’ work from periodic or annual to year round, and enables CPAs to provide higher-level services at a higher margin.

The AICPA projects significant growth in the number of individuals seeking financial advice, as shown in the graphic “Growing Demand for Planning and Tax Advisory Services” below. The career goals of younger accounting professionals may be met in areas as personal financial advisers.

Providing PFP services can be professionally and personally rewarding because:

• It makes a positive impact on clients;
• The work is intellectually challenging;
• There is some flexibility and control over their work environment;
• It garners enhanced respect for the CPA profession; and
• It reaps increased financial benefits.

Further, the compensation-related benefit is undoubtedly attractive to both students and young CPAs.

The AICPA has similarly recognized the need for current tax practitioners to evolve their skills and careers to be able to provide higher-value advisory services, as previous lines of business become increasingly obsolete and/or automated. Consequently, the AICPA has invested substantial resources to enable more traditionally trained CPA members to move higher up the value-added axis (see the graphic “Individual Tax Service Value Proposition Is Evolving” below).

In response to this need for increased education of both students and practitioners, the AICPA has successively introduced a broad range of relevant and timely accounting and finance-related educational programs, as well as related certification and specialized credential programs. Currently, training programs and certificates are being offered, with new timely programs and certificates being continually developed. In addition, more extensive programs resulting in credentials are offered in five specialty areas. Earning these credentials incorporates some combination of education, experience, and examination, and they result in a professional designation, in addition to the CPA. These specialization credentials include Accredited in Business Valuation (ABV), Certified in Entity and Intangible Valuations (CEIV), Certified in Financial Forensics (CFF), Certified Information Technology Professional (CITP), and Personal Financial Specialist (PFS). These credentials are all administered by committees comprising AICPA members, and, ultimately, all are overseen by the AICPA’s National ­Accreditation Commission.

Of particular interest to tax professionals and educators is the PFS credential. As noted earlier, PFP is a rapidly growing field. Per AICPA literature, personal financial planning is projected to grow twice as fast as the accounting profession (IBIS World 2018); the U.S. Bureau of Labor Statistics projects 15% growth in the need for advisers from 2016 to 2026; and a $30 trillion Baby Boomer wealth transfer is expected in coming decades (see the graphic “Growing Demand for Planning and Tax Advisory Services” on p. 153).

A CPA who is an AICPA member may obtain the PFS credential by passing one comprehensive online exam or completing five individual AICPA online certificate programs (and related exams). However, of interest to faculty and students is that PFS coursework and the specialized credential exam (or series of certificates) can be taken as a university student or recent graduate before completing the CPA Exam requirements.

To prepare for the PFS exam, a college student might take several PFP-related university credit courses or complete the series of five online AICPA certificate programs (estate, retirement, investments, insurance/risk management, and professional responsibilities/practical applications). After a candidate obtains his or her CPA license and satisfies the professional development and professional experience requirements, the PFS credential will be granted, based on having previously completed the PFS exam.

To further assist students in working toward a PFS credential, the AICPA has prepared extensive materials to help guide faculty members in their student education efforts. The AICPA materials for faculty and students are based on a comprehensive Model Personal Financial Planning Curriculum (MPFPC) (available at www.aicpa.org. The MPFPC is intended as a resource for accounting educators seeking to develop or modify accounting programs or courses to best prepare students for the accounting profession, whether or not their interest lies in becoming a CPA involved in financial planning, or also obtain the PFS credential. This model curriculum recognizes the integration between PFP and tax considerations and acknowledges that fundamental tax understanding is similarly required. Two of the four overall course learning objectives in the MPFPC rely heavily on tax knowledge and considerations. The other two objectives deal with the PFP process and regulatory, ethical, and professional obligations.

Beyond the model curriculum, to further help faculty and students, the AICPA has worked with a major publisher to produce a graduate-level textbook, along with teaching and text outlines, presentation slides, additional supporting supplementary materials, assessment tools, and a marketing toolkit to help universities promote the programs. Additionally, AICPA staff are available to assist universities considering implementing the course.

This course alone may not adequately prepare students for the comprehensive PFS exam; but if it is taken in conjunction with other university courses, or other AICPA certificate programs or courses, students will better understand financial planning and be more prepared to take the online comprehensive exam. Additionally, faculty or students are provided complimentary access to related AICPA PFS website materials and reduced conference registration fees.

Faculty members wishing to explore this content may visit www.aicpa.org; students may visit www.aicpa.org.

Currently, 34 universities are offering a course based on the AICPA textbook and curriculum materials. Although the text and materials are primarily being used in graduate programs (perhaps because of greater leeway in course offerings), several schools have successfully incorporated them into undergraduate programs. The course is primarily being offered by accounting program faculty, but several finance programs are also using it. A sample list of university programs using these materials is available at the AICPA’s “Find an Education Program in Personal Financial Planning” webpage at www.aicpa.org.

Accounting and tax faculty members should consider exploring the practicality of incorporating a PFP course(s) into their curriculum to augment their tax offerings. This can further interest students in expanded tax and financial planning careers and help meet a growing need for those service providers. Beyond the future career benefits described above, such a program allows students to efficiently obtain specialized career/certification education within their degree program. Those courses will likely provide college credit, count as CPA qualifying accounting education for most state boards of accountancy, and simultaneously help students prepare for the PFS exam, all when they are in an ideal environment to concentrate on their studies. Students embarking on their first job, or even starting the interview process, will certainly stand out if they can show that they have already passed the PFS exam.