Q&A with a CPA Personal Financial Planner

By Tekecha Morgan, Marketing Coordinator

The Trusted Professional sat down recently with personal financial planner and past Society President Stuart Kessler, CPA, PFS, JD, to discuss some of the most pressing issues concerning the practice of personal financial planning. In addition to his prior service as Society President (1984–1985), Kessler also has served as President of the Foundation of Accounting Education and currently serves on the NYSSCPA’s Tax Division Oversight and Development of the Profession Oversight committees. Kessler also has served as chairman of the American Institute of Certified Public Accountants (AICPA) Board of Directors and as President of the AICPA Foundation.

Q: How do you define “personal financial planning”?
A: Personal financial planning is a holistic review of all of the aspects of a client’s financial life. After taking into account their goals and objectives, the financial planner must create a practical program for the client and help implement it.

Q: What advice would you give to a CPA tax practitioner considering entering the financial planning field? What about a more audit-based practitioner?
A: Since personal financial planning requires continuous knowledge in many nonaudit areas it is my feeling that it is more suitable for a tax practitioner. I would encourage the practitioners who want to broaden their experience to take continuing professional education courses, such as the upcoming Personal Financial Planning Conference sponsored by the NYSSCPA’s Personal Financial Planning Committee and the Foundation for Accounting Education.

With respect to my opinion that audit-based practitioners not consider personal financial planning as part of their practice, I would make an exception for the sole practitioner who is the traditional “hand-holding” CPA. The sole practitioner can be extremely helpful to their clients in accounting and audit areas as well as the financial planning area, although it will take a great deal of time to keep up with new developments.

Q: Based on your experience in giving financial planning advice, what are some common mistakes that your clients made prior to meeting with you?
A: Common mistakes include not diversifying investments, not updating estate documents—including wills, power of attorney, etc.—carrying unnecessary debt, lack of communicating with their professional advisors, being under- or overinsured, not having excess liability insurance coverage and failure to plan for retirement, among others.

Q: What is the role of CPAs with clients’ long-term care issues?
A: The CPA/financial planner should review the necessity for a client to have long-term care coverage. For many, long-term care insurance will be the key to survival in the event of a medical emergency. To others, long-term care insurance will serve to provide funds in the event of a long-term care medical emergency. In the latter cases, I discuss the fact that paying for long-term care insurance is in effect a potential gift to their heirs because they will be saving their assets for their children’s inheritance.

Q: What is the role of investment and insurance products within a financial plan?
A: Both investment planning and the need, or lack of need, for insurance are important key elements within a financial plan. However, whether a CPA can effectively offer financial products is a somewhat controversial area. I am of the firm belief that the CPA/financial planner should not sell products. However, there are a growing number of successful CPA/financial planners who hold the opposite view. It is a continuing subject of debate.

Q: What is the role of the NYSSCPA and the AICPA in helping CPAs understand the importance of helping clients with their financial planning issues?
A: Both organizations have financial planning committees that provide their respective members with an understanding of how financial planning issues are of great importance to their clients. Both organizations sponsor annual conferences which serve to cover a myriad of financial planning subjects, and are informative and well attended.

Q: Many studies have shown Americans to be generally financially illiterate. What do you think can or should be done about this lack of knowledge in the financial planning area?
A: The AICPA has instituted a program called 360 Degrees of Financial Literacy, and the NYSSCPA also participates in this program. Although programs like this will not necessarily solve the problem, it is an important component to raising the overall financial literacy of the general public. The more we bring financial literacy to all segments of our population, the better off we all will be.