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Not All Financial Advisors Are Equal

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CPAs and Personal Finance Specialists

Many people have a financial advisor, and a separate certified public accountant (CPA). There's an increasing trend, however, for folks to depend on their CPAs for financial help and advice.

If you want to use your CPA as your financial advisor, that's fine. CPAs typically keep up-to-date on what's happening within the industry because they're responsible for knowing about laws and regulations that change all the time. And your CPA, especially if you've had the same one for a long time, is very familiar with your financial situation. Check though, to see if she has been designated by the American Institute of Certified Public Accountants as a personal financial specialist (PFS). Your accountant certainly should be willing to share her credentials with her clients, or, you can check with the American Institute of Certified Public Accountants by calling 212-596-6200. The fax number is 212-596-6213, and you can access the institute online at www.aicpa.org.

Money Morsel

Many people prefer to use the same person as both their CPA and financial advisor because it allows them to deal with only one person. And people tend to use the same accountants for long periods of time, which allows them to develop a relationship with their CPAs.

In order to receive the PFS certification, a CPA must have three years of financial planning experience, and pass a six-hour test.

Insurance Agents

You might not tend to think of an insurance agent as a financial advisor, but some agents specialize in financial planning.

Those who do, may (although they're not required to) have a Chartered Life Underwriter (CLU) or a Charter Financial Consultant (ChFC) designation. Some may have both.

These are designations by the American College in Bryn Mawr, Pennsylvania. Agents must successfully complete a 10-course program in order to receive a CLU or ChFC designation, and must complete continuing education courses in order to remain certified.

Money Managers

Typically, people that have a lot of money are those who employ money managers. Money managers will, after reviewing your overall financial situation, handle your funds, make trades on your behalf, and buy and sell stocks and bonds for you.

They consider all aspects of your finances, including factors such as your risk tolerance and personal goals.



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Excerpted from The Complete Idiot's Guide to Personal Finance in Your 40s and 50s © 2002 by Sarah Young Fisher and Susan Shelly. All rights reserved including the right of reproduction in whole or in part in any form. Used by arrangement with Alpha Books, a member of Penguin Group (USA) Inc.

To order this book visit the Idiot's Guide web site or call 1-800-253-6476.


August 29, 2014



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