by Melissa Klein
Now that the uncertainty surrounding the fate of the specialty credentials has been removed -- at least for a time -- by the vote of the American Institute of CPAs Council to keep the three designations, holders of the Personal Financial Specialist credential are cautiously optimistic about their future.
But with the challenge of getting the AICPA to keep the credentials behind them, credential holders face the even tougher task of making them successful in a relatively short time.
After months of uncertainty and heated debate, Council members at their fall meeting in New Orleans voted to retain the PFS, the Accredited in Business Valuation, and the Certified Information Technology Professional designations, provided that each attains financial break-even status and meets certain membership levels.
Council also voted for a resolution that would eliminate an annual review process for the credentials.
The PFS, which has been around the longest, and which currently has 3,188 credential holders, must reach 3,600 holders and break even by July 31, 2006. The AICPA also agreed to commit funding for the PFS of $4.6 million in excess of revenues through 2006.
While most PFS designees consider the decision a victory, their optimism is tempered by the knowledge that, in two-and- a-half years, the designation can still sunset if those goals aren’t met. The responsibility for making the designation a success, according to many PFS holders, now falls on both the institute and the credential holders themselves.
“I’m pleased that the Council was able to see its way to extending the period to evaluate this,” said Stuart Kessler, CPA/PFS, and managing director at American Express Tax & Business Services in New York, who favored keeping the credential at the AICPA. However, he added, “I think they could have gone a step further by being a little more positive about the potential for the sunset sometime in the future.”
Kessler’s concern is that it will be difficult to get people to commit to the designation now, knowing that it could still disappear in 2006.
“It’s like asking people to renew their driver’s license for three years and saying that they might not be able to drive anymore after two years,” he said. “It isn’t enticing to people to join knowing that, at the end of two years, they may have to start over.”
As for the benchmarks, Kessler said, “I don’t know that numbers are the thing that drive it.” Kessler, like many other PFS holders, said that what differentiates the PFS from other planning designations is that only CPAs are eligible to get it.
“If we only have 3,500 PFS holders but they are really good financial planners, it raises the bar for other people,” Kessler said, citing as an example the National Association of Personal Financial Advisors. The fee-only group has roughly 1,000 members, but has a high profile and a good reputation with the public. “I don’t know that critical mass makes a difference,” Kessler said.
Jim Shambo, leader of the Association of CPA Financial Planners, a group that had hoped to take over the designation if the AICPA decided to jettison the credentials, also is optimistic.
Shambo said that the 200- plus-member group, which originally banded together in January with the intention of becoming a marketing arm of sorts for the credential, will continue its efforts to support the PFS and plans to work with the AICPA.
While he was somewhat surprised at the outcome, Shambo said that he is “pretty positive” about the decision. “Not only are the credentials still alive, but there’s a new attitude at the AICPA about credentialing that’s reflected in how they’re putting together the budgets and financial forecasts,” he said. “They never had a specially carved out budget for the credentials, and now we will. That’s something different and new and I think it is a way to give everybody a better sense as to what can be accomplished.”
“I didn’t think they wanted to retain the credential, but I’m pleased that they decided to,” Shambo continued. “The institute’s attitude, in the past, was, ‘What can we do to cut our losses?’ but now the attitude seems to be ‘What can we do to make this thing work?’ It’s a different approach to making things happen, and that’s good news for credentials.”
AICPA spokesman Joel Allegretti said that the AICPA will work with the association and that it has appointed one of the group’s board members, Lyle Benson, as a member of the National Accreditation Commission.
“We’re scheduling a meeting with them [ACPAFP] shortly,” Allegretti said. “We were very impressed with their commitment to PFS and we do want to work with them.”
Lyle Benson, CPA/PFS, CFP, of L.K. Benson & Associates, in Baltimore, was also somewhat surprised at the outcome.
“I wasn’t sure the commitment was there, but now I’m seeing a lot of signs that we’re going in a good direction,” he said. “Being transparent on the financials and making sure everybody can see what’s happening financially is going to be important going forward.”
“My biggest concern with the AICPA retaining the credential was whether they would have the single-minded focus to make it successful,” Benson added. But his concerns were allayed by the approach outlined at Council, which showed a pyramid with the discipline of financial planning at the base, the PFP membership section at the middle, and the PFS credential at the top.
“I think it’s the right approach to take,” said Benson. “But we also have to focus on how we provide value for the top of the pyramid, the PFS. That will be a key challenge over the next year or two.”
“The responsibility [for making the credentials successful] lies on both sides,” said Benson. “It’s on the AICPA and those who have the credential to show that there’s value to it. It’s on the members to jump in and get the designation.”
“While, from a business perspective, it may not have been the best decision, because the AICPA is a member organization, what ultimately occurred was what the members wanted,” said Barton C. Francis, CPA/PFS, CFP, leader of PricewaterhouseCoopers’ personal financial services practice in Washington D.C. Francis, a member of both the board of governors of the Certified Financial Planner Board and a member of the AICPA PFP executive committee, added, “While it was a painful process, I think it will be a good thing long-term.”
“One thing I think will come from this is that communication channels were re-awakened. Volunteer leaders who were frustrated and people who felt disenfranchised will feel more connected,” Francis said, adding that he was surprised -- and pleased-- “that the AICPA committed to helping build the financial planning discipline.”
“In February, I couldn’t have anticipated that that was what would happen,” he said. “The process worked and we arrived at something better than what I thought potential outcomes were earlier in the year.”
“There is a better opportunity for something to happen now than we’ve had in a long time,” Francis said. “Now is the time for members who are passionate about it to put their energy and the volunteer hours where their hearts are and drive the thing forward.”
“The Council meeting was a good day for credential holders and a good day for the AICPA. They seemed to reconnect with a group of active members who felt that the institute was about to turn its back on them,” said Mitch Freedman, CPA/PFS, of California-based Mitchell Freedman Accountancy Corp. Freedman said he was disappointed that an exit strategy for the PFS (if the benchmarks aren’t attained) wasn’t included in the Council proposal.
However, now that the AICPA has agreed to commit more financial and staff resources to the credentials, credential holders must step up to the plate.
“Frankly, we, as credential holders, do want to have some input in our own fates. The only way to do that is to go out and beat up the dust in the grassroots and convince others that it’s worthwhile to obtain the credentials,” said Freedman. He is in discussions with PFS holders in California to work on a grassroots communication effort to convince other members to get the credential.
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