The PFS examination.

The Personal Financial Specialist (PFS) accreditation is granted exclusively to CPAs who have considerable personal financial planning experience and want to demonstrate their knowledge, skill and experience by earning the credential. A personal financial planner qualifies for the credential by gaining experience, passing a one-day exam and supplying references from clients and colleagues.

In each of the three years immediately preceding the year that he applies for accreditation, a candidate must have at least 250 hours of experience per year in personal financial planning activities. This must include experience in each of the following areas:

* Personal financial planning process;

* Personal income tax planning;

* Risk-management planning;

* Investment planning;

* Retirement planning; and

* Estate planning.

Although a candidate must have some experience in each area, there is no specific or minimum amount of time required for any one area.

Anyone sitting for the PFS exam must, at the time of the exam, hold a valid and unrevoked CPA certificate issued by a legally constituted state authority, be a member in good standing of the AICPA and agree to comply with all the requirements for reaccreditation (including CPE).

Typically, the PFS exam is offered twice a year, in June and in November. It is computer-based and is offered at over 250 sites nationwide.

The next exam is scheduled for Nov. 5, 1999, and CPAs may register from Sept. 1, 1999 through Oct. 8, 1999. Candidates who sign up during this period are guaranteed an appointment at their choice of test site. For candidates who sign up later, seating is based on availability. Appointments are not accepted within 13 calendar days of the test date.

Each exam is scheduled for six hours, divided into two three-hour sessions administered on a single day. The questions on PFS exams are presented in several different formats--objective-format questions (including multiple choice questions) and questions in a case study format.

Part I of the exam comprises multiple choice questions. Part II has objective format questions and a case study. There is a mandatory one-hour lunch break between Part I and Part II.

The candidate's score on Part I makes up 50% of the grade, and the score on Part II makes up the other 50%, divided equally between the case study and the objective questions. Thus, the scoring breaks down as follows:

* Multiple choice questions: 50%;

* Other objective questions: 25%; and

* Case study question: 25%.

A tutorial helps candidates get comfortable with answering questions on the computer before Part I begins. Candidates may not bring calculators into the exam, but the testing site's computer software has an on-screen calculator and candidates can access that from the question screens. In answering the case study question (the second half of Part II), the candidate chooses whether to use a computer or paper to answer the question.

The PFS exam costs $300, payable by Visa or Mastercard to the Sylvan National Testing Center Group. For those candidates who do become PFSs, this fee includes the initial accreditation fee (i.e., the PFS fee for the first year they are accredited).

Exam Preparation

The PFS exam tests a comprehensive range of personal financial planning topics. The key to passing the exam is broad working experience in financial planning.

Because the exam's scope is broad, candidates may need to study those planning areas in which they have less experience. Candidates should determine for themselves the level of preparation necessary to successfully complete the exam.

The AICPA's PFS Examination Candidates' Handbook provides an abundance of useful information about preparing for and taking the exam. It contains an Examination Content Specification Outline, setting out the scope of the exam and the weight given to each subject matter area. PFSs who have passed the exam report that they used the content specification outline both to familiarize themselves with the topics that the exam covers and to identify the areas of weakness that need further study.

The handbook also contains illustrative exam questions and answers, and includes a thorough demonstration of the approach to take in answering the case study question.

The handbook provides tips about the nuts and bolts of sitting for the exam, including suggestions about how to approach exam questions and budget exam time, what forms of identification are acceptable at the testing center and how to request special conditions under the Americans with Disabilities Act.

Free copies of the handbook are available to candidates, by simply calling 1-888-777-7077.

Study aids available. Candidates commonly use print materials and attend classes to prepare for the exam. Print materials useful to PFS candidates include:

* The AICPA's PFP Practice Handbook and books in the PFP Library Series;

* Practitioner's Publishing Company's Guide to Personal Financial Planning;

* The Bureau of National Affairs Tax Management's Financial Planning;

* Commerce Clearing House's Financial and Estate Planning;

* Materials used in the AICPA Certificate of Educational Achievement in Personal Financial Planning Process program (AICPA CEA PFPP);

* National Underwriter's Tools and Techniques of Financial Planning and The Tools and Techniques of Estate Planning; and

* The American College's Financial Services Professional's Guide to the State of the Art. Helpful classes and self-study materials include:

* AICPA's Personal Financial Planning Certificate of Educational Achievement program. The courses in this program are not specifically designed to prepare candidates for the PFS exam, but the program does cover many of the same topics. For more information, call AICPA/Professional Development Institute at 940-565-3360.

* LINC Society of CPA Planners PFS Review Course. Typically, this course is offered on the weekend preceding the PFS exam. For more information, call 1-800-887-8368.

* PFS Study Guide. This self-study guide includes retirement planning aids and two CD-ROMs on personal financial planning and investment planning. For more information, call J. Michael Sledge at 312-227-2244.

* Stock Financial Services--PFS Exam Self-Study Guide. Offered since 1989, this guide contains information about exam preparation, analysis of previous exams and a compilation of technical material for self-review, with a "last-minute review list." For an information flyer and order form, call Barbara Stock at 972-436-5612.

Newsletters and professional journals, including the AICPA's bimonthly newsletter Planner, are good sources for information about current trends and developments in personal financial planning.

Increasingly, Websites are important sources of information for professionals as well. The AICPA site, at www.aicpa.org, and the www. cpapfs.org site maintained by the AICPA both carry personal financial planning information.

Follow-Up: The Clock Starts Running

CPAs who sit for the exam in November 1999 can expect to receive their results by mid-March 2000. Candidates who pass the exam receive a notifying letter and a package of six blank reference forms and envelopes. After passing the exam, candidates have six months from the date of the AICPA's notification letter to submit six references from people who can substantiate the candidate's personal financial planning experience. If the candidate fails to submit the references within the six-month period, the candidate(5) exam score will be invalidated and the candidate will have to retake and pass the exam to receive the PFS accreditation.

After the AICPA reviews and accepts the references, new PFSs receive a PFS certificate and pin, and they become eligible to use the PFS accreditation based on the rules of the state in which they practice.

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].

Sarah Phelan, J.D. Technical Manager AICPA

Jersey City, NJ