Lewis J. Altfest
by McGraw-Hill Irwin; 2006; ISBN-13: 978-0072536409;
704 pages, hardcover; $137.19;
by Walter M. Primoff
- Unlike most textbooks, Personal Financial Planning will
be useful both to CPA practitioners and educators alike. It covers
personal financial planning (PFP) as a professional practice area,
not as a product sales technique. The text is an excellent desk
reference and overview of the PFP field. It is also well suited
for an elective course in any entry-level CPA curriculum, best taken
after a student has completed courses in accounting, finance, and
CPAs have provided tax, estate, retirement, and similar planning
services that constitute major technical components of PFP. Since
the profession’s inception, many individuals have also relied
on their CPAs as trusted personal counselors. This “financial
psychologist” role is vital to PFP. As a result, readers
will come away from this text with a greater understanding of
why PFP is a natural extension of a CPA practice, and how PFP
can increase the relevance of existing planning services to clients.
texts cover the financial planning process and related analytical
techniques. This book does so in a clear and interesting manner.
Rarely, however, does one come away from any text with much sense
of the professional thought process employed by a skilled planner.
What separates this book from the crowd is Altfest’s skill
at portraying this professional thought process throughout the
book. This is likely due to his unique blend of academic and practice
experience. After practicing as a CPA, he served in investment
research capacities at several major Wall Street firms. He later
became a partner at Lord Abbett & Co. Today, in addition to
his Pace University teaching duties, Altfest runs his own investment
Professor Kingsfield from “The Paper Chase” told his
law students, “You teach yourselves the law, but I train
your mind … to think like a lawyer.” Professor Altfest
shows readers how a seasoned financial planner thinks through
and solves real-world client problems. CPAs will likely match
the text’s numerous war stories against their own client
experiences and approaches to solutions. A master case involving
clients “Dan and Laura” is discussed and developed
in every chapter. (In the “Tax Planning” chapter,
Dan reveals his enjoyment of preparing his and Laura’s joint
tax return himself and performing related Tax Court research.
This reviewer suggests that Dan find something better to do with
PFP texts typically explain the PFP process, offer an overview
of each process component (e.g., taxes, estates, investments,
and risk management planning), and conclude by presenting a related
comprehensive financial plan. The purpose is not to provide in-depth
discussion on individual components. Rather, it is to emphasize
the PFP process that integrates them into a comprehensive financial
plan, creating a whole that is greater than the sum of its parts.
For many financial planners, Altfest’s discussion of hands-on
integration of the components alone will make his book a worthwhile
addition to their library.
planners who manage the affairs of the world’s richest people
have long viewed the family as a business, with three components
of capital: financial wealth; human resource capital (potential
and actual growth of family members); and social capital (a family’s
benefit to society.) Altfest’s book adapts this concept
in a unique way. It shows how families resemble a business that
can “profitably use (business) financial techniques.”
Accordingly, net present value, internal rate of return, financial
ratios, and other tools of business financial analysis are incorporated
throughout the text. Altfest shows how creating financial efficiency
better positions a family to achieve its members’ goals.
is complemented by a content-rich website (www.mhhe.com/altfest)
that contains additional chapters, appendices, chapter summaries,
and the comprehensive financial plan for the “Dan and Laura”
case. The website includes a separate password-protected section
for instructors, containing a full range of teaching guides, PowerPoint
presentations, Excel spreadsheet solutions, and other aids for
teachers of a PFP course.
CPAs, the book’s value would increase even further if it
included more discussion on a few topics important to them. Such
topics would include the use of packaged PFP software, the “professional
team” approach to providing PFP services, and planning for
small business owners. Perhaps these topics can be expanded in
future materials on the website. These are just quibbles, however.
Altfest should be congratulated for writing a text that simultaneously
presents rigorous PFP theory and portrays real-life planning through
the eyes of a highly skilled and experienced PFP professional.
M. Primoff, CPA/PFS, is the CEO of PrimGroup, Cos Cob,
Conn., and Woodbury, N.Y.