Personal financial planning (PFP) is one of the newer growth areas of service being offered by CPAs. As an illustration of the interest in this area, the AICPA Personal Financial Planning Division, in its short existence, has grown to approximately 9,000 members. Furthermore, the new Accredited Personal Financial Specialists (APFS) designation instituted for CPAs has been earned by more than 400 CPAs and is attracting an increasing number of candidates. With practicing CPAs establishing programs to meet the needs of client service, a number of accounting educators are reviewing their programs to determine how they can prepare students for careers in personal financial planning.

This article highlights the experience of the University of Massachusetts accounting department in working PFP into their accounting curriculum and offers some suggestions for educators considering adding PFP to their programs.

Where are PFP Courses Found in Colleges and Universities?

Courses in PFP have been offered in colleges and universities for a number of years. The first of these courses emphasized the personal or consumer needs of the individual. The courses have been offered by either schools of business, home and consumer economic departments, or continuing education divisions.

The courses have generally been very descriptive in nature, providing the student with information on a wide range of PFP topics related to an individual life cycle. The topics range from handling basic personal finances to problems of retirement and transferring of estates. Typically, the courses are aimed at helping the individual solve his or her own personal financial situations.

More recently the need for professional personal financial planning assistance has emerged, and a number of schools are offering courses and programs aimed at educating individuals for careers as financial planners. A number of schools have offered courses as part of a program to earn the Certified Financial Planners (CFP) designation that is awarded by the College for Financial Planning. A number of non-academic courses are offered through university divisions for continuing education for preparation for CFP examinations. An increasing number of schools are now beginning to offer programs in PFP leading to either undergraduate or graduate degrees. The courses and programs are typically offered by the school of finance faculty. The orientation of the course in PFP has, however, taken a different orientation from earlier courses. Earlier courses emphasized personal needs; the newer courses stress the planning process of professionals providing the service to individuals.

The Approach

For an institution considering introducing PFP, the first effort should not be to develop an entire program, but, rather, to offer an introductory course in PFP and integrate it with other course offerings. This will keep at a minimum the number of new PFP courses needed at the undergraduate level.

The objectives of an introductory course in PFP should be to acquaint students with the process and the various components in PFP. The course, as indicated, should be an introductory course, and not a capstone course. Therefore, it is aimed at the junior/senior level student who wants to become familiar with the PFP process and the professional aspects of a career in PFP. The course will be different from the personal finance courses referred to earlier in emphasis as well as in subject matter. The topics covered would include the PFP process, personal income tax planning, risk management planning, investment planning, retirement planning, and estate planning. Other topics might include introduction to professional practice, certification requirements and legal issues.

Teaching Approach

The introductory course can easily be taught by a single faculty member, however, the course can also be co-taught by two or more faculty members as is done at the University of Massachusetts (UMASS). This approach requires a coordination of topics that will be taught by each faculty member. At UMASS, the approach has proved to be successful for both students and faculty. Furthermore, the course format is ideal for bringing in "guest lecturers" to speak on special topics or current issues.

From our experience, a combination of lecture, discussion, problems, and cases make for an effective approach to teaching the introductory course to PFP.

Course Material

When we first offered the course, we found a lack of material that met our specific needs. Consequently, we had material in textbook format for use in the course. We have the material reproduced on campus. We also use the AICPA Personal Financial Planning Manual as a supplement to the course.

We found that the available texts in the PFP area stressed the personal needs and not the planning approach we considered important. Also, some texts that were available that emphasized the planning approach were written at a level we did not think appropriate. Or, they were lacking in the supplementary problem or case material necessary for the course.

More recently, however, additional materials are available for use in the introductory level course including case books from the Registry for Financial Planning Practitioners, the College for Financial Planning, as well as AICPA PFP manuals.

Furthermore, some of the personal finance type textbooks are beginning to emphasize the planning approach that was lacking in the earlier editions. In addition, it is understood that new texts are coming into the market that will emphasize the PFP process.

Is It All Worth It?

Why get into PFP? Is it all worth it? Well, from our experience of teaching the introduction to PFP as an independent study course and as a formal course offering, we believe it is worth the effort.

First, there is student interest in the area, and they are looking to faculty to provide them with an opportunity to study and explore the topic, both for personal knowledge and career opportunities.

Second, there is a professional need for accounting and tax graduates with some background in the PFP process and related subject areas.

Third, PFP is a refreshing area to teach, especially for a faculty member with a traditional accounting or a taxation background.

Fourth, PFP courses attract a new type of student to accounting. Our course has had a large number of finance students enrolled. The class mix creates an environment that is different from the "all accounting majors" enrollment found in most accounting courses. Furthermore, we have found several of the students who previously would not have considered accounting as a major have since reappraised accounting and, in fact, took positions with major public accounting firms. With accounting expected to experience a shortage of talent, and in some cases losing good students to other fields, the PFP course provides accounting faculty an opportunity to reach these students.

Our experience has been fairly successful. However, in our discussion with other faculty and prospective employers we noted several problem areas.

Institutional Problems

* The PFP area had been developed predominantly by the finance faculty. Some "turf problems" have been noted as to whether PFP courses and programs should be offered and housed in schools of business or economics. This includes the teaching and staffing of the courses. Because of the nature of the field, PFP, more than any other discipline, should probably be a joint effort between several of the typical school of business departments. * Should the PFP program be an undergraduate or graduate program? PFP is currently offered at both levels. But for accounting students with all of the present course requirements, would additional PFP courses be an undue burden? Would it be better to leave PFP courses to the emerging 150-hour programs or master level programs? More study is necessary. However, at a minimum, PFP can be introduced at the undergraduate level and students counseled to take related courses as electives. * In addition, should PFP be an extension of the tax offerings in a typical accounting program, or be a separate concentration? The joint effort between finance and accounting departments is probably the ideal solution. Here again, the question needs further study. * Will there be adequate faculty to teach the courses should the popularity of the area continue to increase? It is unclear at this time, however, if faculty are beginning to show interest in PFP as a field of teaching, research and publication.

Employer Requirements

What are the employment market expectations for entry level staff into PFP? Will employers want a student with the necessary course background to sit for the CPA exam, and still have the PFP background? If so, does this lead to the master or 150-hour candidates? It is still too early to determine what employer expectations will be for entry level staff. However, most large firms have instituted a series of in-house courses in PFP to train present staff.

Anthony T. Krzystofik, CFP, CPA, University of Massachusetts