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.
Michael Hickman is CEO and CFO of Exactera, where he manages the company's financial planning and strategic direction. Before joining Exactera, Hickman was the CFO at the global performance-marketing marketplace Perform[cb], where he championed the company's financial strategy and helped increase organic profitability markedly. Hickman oversaw multiple acquisitions and was instrumental in selling Perform[cb] to Beringer Capital in April 2021. A CPA with more than 25 years of leadership experience at companies including Deloitte, MetLife, Roper Technologies, and Switch and Data, Hickman has navigated acquisitions, dispositions, debt financing, corporate consolidations, financial planning and analysis, valuations, SEC Reporting, technical accounting, and system implementation and project management. He holds a master's degree from the University of Florida.
Bill Armstrong, CPA, is chief innovation officer at Moss Adams, where he's responsible for the incubation, implementation, and overall strategy of new ideas, processes, and services within the firm. He oversees the firm's innovation, transformation, and change management functions, and spearheads major firmwide initiatives across practices and departments. He has practiced in public accounting since 1994. Reach him at bill.armstrong@mossadams.com or (949) 221-4077.
Evan Zall is president and founder of Longview Strategies, a strategic communications firm focused on the intersection of finance and sustainability.
He and his team have worked with wealth management firms for decades to help them differentiate and communicate about sustainable investing, ESG and their overall practice strengths. Evan is also a board member and the Impact Chair of Entrepreneur's Organization (EO) Boston Chapter.
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.
