When considering divorce, most people initially think of hiring an attorney. It’s often later in the process or even after the divorce is final that they consider involving an investment advisor, such as a CPA, CFP® practitioner, or CDFA® professional.
Financial experts come with various designations, like CERTIFIED FINANCIAL PLANNERTM, Chartered Financial Consultant (ChFC), Certified Public Accountant (CPA), and Certified Divorce Financial Analyst® (CDFA®) professional. Let’s break down their roles:
Investment Planner:
- The focus of investment planners, CFP® professionals, or ChFCs is to help individuals achieve their financial objectives, whether they’re going through a divorce or happily married.
- They assess the client’s goals, evaluate current assets and liabilities, and develop strategies to meet those goals, considering assumptions about income, expenses, inflation rates, interest rates, and investment returns.
Certified Public Accountant (CPA):
- CPAs primarily deal with the current financial scenario without projecting into the future.
- In divorce cases, they calculate the tax implications of property division and spousal/child support for a limited period, usually one or two years. They might also conduct audits or forensic accounting to uncover hidden assets.
Certified Divorce Financial Analyst Professional® (CDFA®):
- CDFA® professionals bridge the gap between investment planning and accounting, specifically tailored for divorcing clients.
- They collaborate with clients and their attorneys to understand the financial ramifications of decisions made during divorce proceedings.
- CDFA® professionals provide litigation support, analyze tax implications, evaluate retirement plans, assess affordability of assets like the marital home, and establish future financial goals, among other tasks.