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.
Joe Salesky is CEO of CRMNEXT, the largest global provider of CRM in financial services, where he is responsible for the company’s entry into the U.S. market. A seasoned expert in software and financial services, Joe has spent more than 25 years developing and delivering disruptive technology-enabled solutions. He holds 21 patents on technologies currently used by both consumers and large enterprises, including mobile banking and the original patent for web-conferencing. A luminary in his space, Joe has deployed mission critical systems at more than half of the Fortune 500 companies and is a respected speaker at industry and media events. He has been quoted in leading national, international and industry publications and has led his companies to achieving numerous prestigious awards.
CJ Aberin is a principal at KBKG and oversees the Green Building Tax Incentive practice. Over the last several years, He has performed Green Building Tax Incentive studies and cost segregation for clients in various industries that range from Fortune 500 companies to individual real estate investors. Aberin is accredited to certify energy efficient tax credits and is one of the first professionals in the country to earn the highest level of industry certification in cost segregation. He currently co-chairs PrimeGlobal’s Construction & Real Estate Group, which has over 200 members.
Gary Hecht, Ph.D., is associate professor of accountancy and PwC faculty fellow in the Gies College of Business at the University of Illinois at Urbana-Champaign, as well as an instructor on Coursera. Gary primarily teaches managerial and cost accounting, Ph.D. research seminars, and accounting analytics courses. Gary’s primary research interests include subjective performance evaluation and strategic performance measurement systems.
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.
