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.
Darren Wood is the founder and president of Recoop Disaster Insurance, a first-of-its-kind, multi-peril disaster insurance product.
Darren is an insurance industry veteran, with over 25 years of experience. He previously served as the division president for Holmes Murphy, a top 25 insurance broker, where he was responsible for the delivery of value-added solutions to insurance clients. He also held senior project management and operational leadership roles with Marsh Consumer (now Mercer), focusing on the delivery of employee benefit and affinity solutions to consumers through Fortune 1,000 clients. Darren received his degree in Accounting from Simpson College, earned his Project Management Professional (PMP) designation and is a veteran of the United States Army.
Rachel is one of the premier leading insurance professionals with over ten years of experience in the industry. After launching her career as a management liability underwriter at AIG, she spent several years as a client advisor for the Financial Institution Group at Marsh. Rachel advised on risk management for the world's largest banks, insurance companies, asset managers & funds. Since joining the Founder Shield as a Senior Account Executive in 2017, she now leads the Customer Success team. Rachel focuses on client advising, improving policy language for venture-backed companies, including financial institutions, ecommerce, and SaaS companies, and developing new tech to continue driving innovation in the insurance industry.
Katka is an Associate Partner with McKinsey & Company, based in Boston. She serves private equity clients with expertise in financial technology, including insurance, wealth management and banking. She has conducted more than 20 diligences in the space and has served financial technology companies on growth, pricing, and go-to-market strategies as well as M&A. Katka holds an MBA with distinction from Harvard Business School, an MSc. in financial economics from the Saïd Business School at Oxford University, and a BSc. in mathematics from University College London.
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.
