Obtaining the personal financial specialist credential.

CPAs who specialize in personal financial planning may qualify for the Personal Financial Specialist (PFS) designation established by the AICPA. The credential is granted exclusively to CPAs with significant personal financial planning (PFP) experience who want to demonstrate their knowledge, skill and experience by earning the credential.

The credential is granted to CPAs who satisfy experience and knowledge requirements and provide references. To qualify for the PFS designation, a candidate must:

* Be a member in good standing of the AICPA;

* Hold a valid and unrevoked CPA certificate issued by a legally constituted state authority;

* Agree to comply with all the requirements for reaccredidation (in following years);

* Pass the PFS Examination; and

* Upon successful completion of the PFS exam, submit six references to substantiate working experience in PFP.

Finally, a candidate for the PFS credential must have at least 250 hours of experience in PFP activities in each of the three years preceding his initial application.

The candidate has to have at least some experience in each of the six following areas, but there is no specific or minimum amount of time required for any one area:

* PFP process;

* Personal income tax planning;

* Risk management planning;

* Investment planning;

* Retirement planning; and

* Estate planning.

There are many activities that may qualify as PFP experience. Some examples of qualifying activities include:

* Helping clients to establish their financial goals; organizing and analyzing data; performing time-value-of-money calculations for decisions such as refinancing a home.

* Advising clients on the Federal and state income tax consequences of their financial decisions, including matters such as timing income and deductions; taking retirement plan distributions; making gifts; setting up trusts; making property settlements; dividing up retirement plan assets at divorce; and paying alimony and child support.

* Analyzing clients' exposure to risk and reviewing with them methods for managing risk; advising clients on various types of insurance and their uses; planning for long-term health care for clients and their families; reviewing proposed policies to ensure clients' needs are satisfied; reviewing with clients the income and estate tax aspects of insurance coverage.

* Reviewing investment preferences and risk tolerance with clients, and helping them to develop investment strategies based on these considerations and their goals; discussing available investment options with clients; monitoring the performance of invested assets; developing asset allocation recommendations.

* Helping clients develop or refine retirement planning goals (timing, relocation, second careers or other activities, etc.); calculating savings needed to meet retirement cash requirements and analyzing available retirement plans; reviewing with clients the limits on and tax consequences of contributions to or distributions from retirement plans; planning for retirement plan withdrawals.

* Helping clients develop or refine their financial and personal estate planning goals; estimating liabilities for Federal estate tax, state death taxes and other obligations and determining cash needs at death; recommending or reviewing various instruments (wills, powers of attorney, trusts, etc.) for use in achieving goals; planning for the post-mortem succession of a closely held business (buy-sell agreements, estate freeze techniques, valuation issues, etc.).

The PFS examination is offered twice a year, typically in June and November, at over 250 sites nationwide. Exact site locations are provided when candidates' registrations are accepted. Exam candidates who schedule an appointment 30-60 calendar days before the administration of the exam will be guaranteed an appointment at their choice of exam sites; candidates may schedule an appointment 14-29 days prior to the test administration, but those candidates are not guaranteed an appointment at their selected site; seating is based on availability. No appointments are accepted within 13 calendar days of the test administration.

For the Nov. 5, 1999 PFS exam, the registration period begins on Sept. 1, 1999 and runs through Oct. 8, 1999.

CPAs who are AICPA members and meet the experience requirements can register for the PFS examination and become a PFS candidate by calling the Sylvan National Testing Service Group at 1-800-864-8080. The Sylvan representative will request the following information:

* Name and address;

* Home and office telephone numbers;

* Social Security number;

* Date of birth;

* AICPA membership number; and

* Visa or MasterCard number and expiration date. (The examination fee is $300; only Visa and MasterCard are accepted for payment.)

The cost of the PFS exam includes initial accreditation. Candidates' credit cards are charged on the day of the examination.

Candidates requesting special accommodations under the Americans With Disabilities Act should contact the AICPA, at [e-mail]. The AICPA then notifies the exam administrators so that appropriate arrangements can be made.

Deadline for the next PFS Exam. AICPA members interested in obtaining the PFS designation can take the PFS exam in June or November. The deadline for registering for the June 1999 exam is May 21, 1999. The exam is scheduled for June 18 and will be available nationwide at over 250 test sites. Applicants must comply with all conditions of the PFS Program, including AICPA membership, 750 hours of PFP experience for the three years prior to applying for the PFS examination, six references and ongoing professional education and PFP practice. There are currently over 2,500 holders of the PFS designation. For exam information, call the AICPA Order Department (1-888-777-7077, sub-menu #1) and ask for the PFS Candidates' Handbook and exam packet (product number G00055).

AICPA statement on FLPs available on Website. Personal financial planners may be particularly interested in a recent white paper that sets forth the AICPA's position concerning the legitimate use of family partnerships. The white paper examines the development of the family partnership and surveys the major cases and laws that have focused on the transfer tax ramifications of family limited partnerships (FLPs). It then examines the Service's position, which is discouraging practitioners from using the FLP structure, and suggests some guidelines for structuring FLPs to minimize the potential for IRS challenge.

The white paper is posted on the AICPA's website (www.aicpa.org). At the AICPA home page, click on Members and then click on Taxation Team. The white paper is listed under Resources on the Taxation Team page. It can also be found by conducting a site search for "FLP."

Editor's Note: Sarah Phelan is Technical Manager of the AICPA Personal Financial Planning Team.

The author's views, as expressed in this column, do not necessarily reflect the views of the AICPA. Official positions are determined through certain specified committee procedures, due process and deliberation.

If you would like additional information about this article, contact Ms. Phelan at [phone].