What is an AFC? The Difference between an AFC, Financial Planner, and CPA
Understanding the Financial Professional Landscape
Personal finance can be complex, and understanding the different types of professionals in this field is key to making informed decisions. While these professionals often work together, their roles, expertise, and qualifications vary significantly.
What is an AFC (Accredited Financial Counselor)?
An Accredited Financial Counselor, AFC, is a professional who provides advice on financial education and personal finance topics, including budgeting, debt management, savings, and financial goal-setting. The certification process and requirements to become an AFC include completing an educational program, passing a comprehensive exam, completing 1,000 experience hours, and adhering to ethical standards. They must also meet continuing education requirements each year. AFCs focus more on helping individuals manage day-to-day finances, improve financial behaviors, and avoid financial pitfalls. Situations when to consult with an AFC might be when you need help with credit card debt, creating a budget, or managing a financial emergency.
What is a Financial Planner?
Financial planners help clients with long-term financial goals like retirement planning, estate planning, investment management, and tax strategies. One credential is the Certified Financial Planner (CFP), which requires meeting education, experience, and ethical standards, along with passing an exam. A financial planners’ work is more strategic in nature and tends to focus on long term goals. Situations when to use a financial planner would be planning for retirement, managing investments, or creating a comprehensive financial plan.
What is a CPA (Certified Public Accountant)?
A Certified Public Accountant, CPA, is a licensed professional who specializes in accounting, tax preparation, and financial reporting. The process to become a CPA, includes passing the CPA exam, gaining experience, and meeting continuing education requirements. Their scope of services includes discussing tax filing and strategies, auditing, financial statement preparation, and business consulting. CPAs are also experts in tax laws and can assist in navigating complex tax situations. When to seek the help of a CPA would be when you need help preparing taxes, managing tax deductions and credits, financial statement auditing, or setting up a business structure.
Key Differences Between an AFC, Financial Planner, and CPA
The focus of each profession varies. For example, AFCs deal with day-to-day financial health, financial planners work on big-picture financial goals, and CPAs specialize in taxes and accounting. Their clientele varies as well. AFCs often work with individuals seeking financial education or those in financial distress. Financial planners serve clients seeking long-term financial growth, while CPAs are often involved with businesses or individuals with more complex tax needs. As noted, they each have some form of certification and qualification requirements.
You may need to consult more than one of these professionals. Consider your financial needs and goals before deciding which professional is best suited to help. It is important to look for trusted, qualified professionals. Combining the services from each can lead to more effective financial management. If you need an AFC, please reach out to me!