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.
Marcin Nowak is the founder of Decerto, a company specializing in providing software solutions for automating the work of insurance agents. A graduate of computer engineering and postgraduate MBA studies. Creator of the Higson software – a business rules engine. He has been associated with the insurance industry for over 20 years, specializing in automation, the impact of technology on the insurance sector, underwriting, and management. A proponent of the smart insurance technology concept.
Nancy Germond, MA, ARM, AIC, ITP, SPHR, SHRM-SCP, is Executive Director, Risk Management and Education, for Big 'I' national.
Nancy is a second-generation insurance professional and an accomplished risk and claims manager. As the Executive Director of Risk Management and Education at the Big I, Nancy has authored scores of risk-management related articles and presents to organizations like the Public Risk Manager Association (PRIMA), claims associations, and the Society for Human Resources. She is also the author of Workers' Compensation in Two Hours, a book geared toward small business owners and new insurance agents who want to learn more about this important coverage.
Nancy graduated with honors from Mills College and earned her Master's in Sociology from Lincoln University. She holds the Associate in Risk Management designation, the Associate in Claims designation, and is a certified Insurance Training Professional. Nancy also holds the prestigious Senior Professional in Human Resources designations.
Doug Sabella is the CEO and co-founder of Payroll Integrations. Sabella co-founded Payroll Integrations in 2016 to simplify payroll and benefit processes for employers and advance employees' financial wellness. The company's technology introduces a direct, two-way connection between payroll systems and benefits providers (401k, HSA/FSA, etc.) to automate the process of onboarding employees, updating benefit plans and managing employer/employee contributions.
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.
