New CPA exam section on financial planning links tax and wealth

Certified public accountants with the personal financial specialist credential are hailing the "significant milestone" and "monumental addition" of a planning section to the CPA exam.

For the first time starting at the beginning of the year, between 30% and 40% of the questions in the "tax compliance and planning" discipline of the test — one choice among three options for the other section that CPA hopefuls must pass besides the three core components of the 16-hour examination — cover financial planning and retail tax services for individuals.

The change reflects growing ties between the wealth management and tax professions and an effort among CPAs dating back a decade. Just as with any changes to the certified financial planner exam, any shift in the topics on the test brings new possible areas of professional development, business and client services to practitioners in the field.

"This journey has not only been a testament to perseverance but also a reminder of the impact dedicated professionals can have on shaping the future of their profession," Jean-Luc Bourdon, the founder of Santa Barbara, California-based Lucent Wealth Planning, wrote earlier this year on LinkedIn. "As we move forward, CPA clients stand to benefit from more comprehensive and integrated personal financial advice, a direct result of a collective effort and vision."

The test material spans 25 different tasks and skills including some applicable to planning, according to a "blueprint" guide on how to study for the CPA exam, which summarized the new questions as concerning "qualified retirement plans, investing, education funding and risk mitigation through the use of insurance."

READ MORE: Taxes + wealth: 2 connected but still (for now) distinct fields are merging

Bourdon's post, "The Decade-Long Journey to Integrate Personal Financial Planning into the CPA Exam," credited Andrea Millar of Andrea Millar Life Planning and Lori Pajunen Luck of CLS Financial Advisors for collaborating on the "desperately long shot" to "seek recognition of the essential importance of" personal financial planning. Another commenter praised the late Kostelanetz Senior Counsel Sidney Kess, "who also fought in the trenches for this agonizingly slow progress of our beloved profession." 

Millar led the planning section of the American Institute of CPAs for 14 years, and the process began with the submission of comments to the organization, Bourdon wrote. The new part of the test launched in the first exams of 2024 in January following a reassessment period, an academic task force and many other steps.

"Adding personal financial planning (PFP) services to CPAs' offerings opens the door to multiple opportunities for CPAs, their employees, their recruiting efforts and their clients," Susan Tillery, CEO of Kennesaw, Georgia-based Paraklete Financial and past chair of the AICPA Personal Financial Planning Executive Committee and the AICPA Personal Financial Specialist Credential Committee, wrote in a December column in the AICPA's publication, The Tax Adviser.

"The need for PFP services is great; the need for PFP services offered by CPAs is even greater," Tillery wrote. "The multiplication that occurs in client revenues, client retention, employee satisfaction, employee recruitment and the overall benefit to the client compels CPAs to take a closer look at why PFP services are not already being offered by their firms."  

While CPAs have advised clients about personal finance for more than a century and the specialist credential in planning from the AICPA dates to the mid-'80s, the new section of the test represents "a significant milestone" displaying "the profession's dedication to enhancing education and promoting financial planning excellence," Dan Snyder, the director of public accounting (personal financial planning), wrote in a blog earlier this month.

"Adding PFP to the CPA Exam increases awareness of the role of CPAs in PFP planning, which is an exciting development for the accounting curriculum and the PFP field," Snyder wrote. "This inclusion will inspire the next generation of accounting professionals by motivating aspiring candidates to pursue this dynamic and rewarding field."

READ MORE: 5 tips for advisors preparing for the CFP exam

Other wealth and tax professionals chimed in with their support for adding the questions about planning to the exam. They could nudge "young students to see personal financial planning as a career" and help address the fact that "some people are cautious when searching for financial planning advice, as they feel most of the advisors today are salespeople," Jeffrey Levine, the director of financial strategies for Woburn, Massachusetts-based LGA CPAs and Business Advisors, said in an email. Levine's firm offers wealth management services and gets tax referrals through registered investment advisory firm Integrated Partners' CPA Alliance. 

"While there will always be a need for accurate and timely fair presentation of business records, well-prepared tax filings and a profession with strong ethics and strong training to guide business and personal financial matters, expanding the role of CPAs into personal financial planning is long overdue," Levine said. "Some predict that AI will take over our profession and reduce our value. I believe financial planning done properly requires a professional to gather information, listen and provide insight. Preparing more CPAs for this area by providing coursework and adding the subject to the exam is a major step toward building a workforce to handle the needs that are already here."

The new CPA Exam material on planning could "help stop and maybe even reverse the terrible erosion of financial literacy in America," Avantax Wealth Management Vice President of Planning and Growth Solutions Andy Watts said in an email. CPA Herb Vest launched Avantax's predecessor firm, HD Vest Financial Services, more than 40 years ago, so the company supports "efforts to ensure all future CPAs are equipped with the skills and knowledge needed to create the highest probability of success as clients pursue their financial goals," Watts said.

"You can't really do a complete job of financial planning without tax being a huge part of it," Watts said. "Our perspective is that everyone's financial planning should be rooted in an assessment and understanding of the impact of taxes every step of the way. In fact, I firmly believe that someday, financial planning without incorporating tax planning will be considered unthinkable."