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.
Kristen A. Gray is EY Americas sustainability tax leader. She has nearly 20 years of experience helping multinational companies address complex tax issues, including transactions and strategic planning, controversy and global compliance and reporting matters. She provides strategic counsel to clients around the intersection of tax and environmental, social and governance matters. Prior to her current role, she served as a partner in the national tax accounting and risk advisory services practice, focusing on life sciences, technology and media clients.
Jim Davis is vice president of insurance at Geotab, where he leads insurance, risk management, insurtech programs and business development. His 30-year career includes commercial P&C insurance company, brokerage and captive program management. At the forefront of video telematics, his experience and wide range of knowledge also includes driver safety, scoring and learning management systems.
Ben Malka joined Cota in 2019 as a Partner on the investment team, where he is focused on sourcing, evaluating, executing, and governance of venture investments. Prior to Cota, Ben was a General Partner at F-Prime Capital, a San Francisco-based financial technology and enterprise IT-focused venture capital fund. At F-Prime, he served as lead partner for a number of investments.
Since 1999, Ben has also served as a General Partner at North Hill Ventures, a financial technology focused venture capital fund. Previously, Ben was with The Boston Consulting Group, where he was the Project Lead for a number of clients across strategy development, acquisition strategy, new product evaluation, and operations improvement. He began his career at Bank of America as a Statistical Analyst.
Ben received a Bachelor of Arts in Economics and Political Science from Stanford University and a MBA from the University of Chicago.
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.
