Financial satisfaction of people in the U.S. rebounded strongly in the third quarter of the year, according to a new survey by the American Institute of CPAs, reversing the lows in the second quarter in the midst of the recession brought on by the novel coronavirus pandemic.
The AICPA’s Q3 2020 Personal Financial Satisfaction Index measured 33.1, representing a whopping 99 percent (16.5 point) increase from the previous quarter. That’s the biggest quarterly increase in the 27-year history of the PFSi, and a complete turnaround from the second quarter, when the index had its largest ever quarterly drop.
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Albalushi is a principal at the RBL Group, a consulting company specializing in strategic HR, talent management and organizational alignment. He has over a decade of GCC (Gulf Corporation Council) experience in organizational transformation, business management and business analysis. He has worked in many sectors and industries including civil service, infrastructure, information technology, oil and energy, maritime and shipping, mining and metal, investment and management consultancy. Albalushi has significant experience as an internal HR manager and is well versed in many facets of human resources. He has helped several organizations implement and roll out their HRMS systems.
Kristen Rampe, CPA, is the managing partner of Rosenberg Associates. She is a nationally known consultant to CPA firms and a frequent speaker at practice management conferences. She specializes in helping small to mid-sized firms with partner compensation, partner agreements, buyouts, strategic planning and retreats, firm governance, and leadership development. She has co-authored four books along with Marc Rosenberg, CPA, including CPA Firm Management & Governance, CPA Firm Partner Retirement/Buyout Plans, What Really Makes CPA Firms Profitable?, and The Role of the Managing Partner. She spent 10 years in public practice with Big Four powerhouse PwC and top 50 ranked Frank Rimerman in San Francisco before founding her consulting practice in 2011 and merging with Marc Rosenberg in 2022. She was named Woman to Watch by the California Society of CPAs in 2011, 40 Under 40 by CPA Practice Advisor in 2015, and Top 100 Most Influential People in Accounting by Accounting Today for several years. Kristen holds an active CPA license with the state of California. She has been featured by Fortune and Investor's Business Daily. Kristen is a graduate of Butler University.
Paige E. Pidano is a managing director and senior associate general counsel at The Clearing House Association.
The PFSi is built around various factors, including the labor market. The gains can be mainly attributed to improvements in job openings per capita and underemployment. Those had the biggest impact on increasing the overall PFSi. The biggest factor driving the quarter-over-quarter rally was a 35 percent (37 point) decrease in underemployment. A decrease in underemployment improves overall financial satisfaction in the index. While there was an improvement in underemployment in the third quarter from Q2’s record high, it’s still 117 percent above its level a year ago. For the second consecutive quarter, underemployment is still the biggest negative contributor to the average American’s personal financial satisfaction. The Q3 underemployment level reflects data measured through the middle of September.
“As Americans continue to navigate the economic impact of the COVID-19 pandemic, it is important to remember that the fundamentals of financial planning haven’t changed,” said AICPA PFS Credential Committee chair Dave Stolz in a statement Thursday. “Though the stock market’s record performance is encouraging, 2020 has served as a reminder of the volatile nature of markets. As the impact of COVID-19 continues to play out across the country, investors should weigh their risk tolerance and ensure they have ample cash on hand. Further, a tax-efficient financial plan that includes a diversified portfolio can give confidence that long-term financial goals will remain within reach through this period of extreme uncertainty.”
The coronavirus put millions out of work, prompting job openings per capita to show a record plummet earlier this year. In the third quarter, job openings started to recover, climbing 37 percent (20 points) compared to Q2. That factor is now only 10 percent below its measurement a year ago before the pandemic. The Q3 index comes from July data from the U.S. Bureau of Labor Statistics.
