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.
Chuck Harenza is co-chair of Stevens & Lee’s Employee Benefits and Executive Compensation Group.
Mr. Klein is a partner at Kensington Capital Advisors, an independent derivative advisory firm representing borrowers who need advice and counsel related to interest rate, commodity and foreign exchange derivative applications. The practice is national in scope and the Company’s clients operate as non-for-profit (501c3) and municipal organizations, government sponsored entities, tax credit investors, investment banks, and both conventional and non-for-profit real estate developers.Prior to his work at Kensington Capital Advisors, Mr. Klein was a derivative specialist on Bank of America’s derivative trading desk starting in 1995. The client base served by this group encompassed indirect issuers of tax-exempt and taxable municipal debt and public finance professionals, including municipal bond underwriters, financial advisors, municipal reinvestment brokers and bond counsels. The group was responsible for all tax-exempt liability hedging such as swaps for VRDN’s and forward issued municipal bonds. In addition, the group was responsible for all derivative investment products for municipal bond proceeds including forward supply agreements, GIC’s and flexible repurchase agreements for construction funds, reserve funds, debt service funds, escrows, etc.Mr. Klein joined Bank of America (formerly NationsBank) in 1993, after two years with PNC Financial Corporation in the Investment Management and Trust Division. In 1995, Jeff began with the Interest Rate Risk Management Group after working for two years as an analyst in the Bank’s Corporate Finance Department focusing on relationships throughout the southeast and also within industry groups such as Forest Products and Textiles. Mr. Klein’s educational accomplishments include a BS in Business Economics and International Finance from Brown University (1990) and the Danish International School of Business in Copenhagen, Denmark (1988). He has received his series 6, 7 & 63 securities licenses as well as the Chartered Financial Analyst™ (CFA®) designation.
Carl Mazzanti is the founder and CEO of eMazzanti Technologies. His firm specializes in multi-site implementations, outsourced network management, remote monitoring, and support based on Microsoft and related technologies for customers ranging from home office to high-end retail and multinational corporations.
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.
