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.
Nathan Place is a national reporter at American Banker. A native of New York City, he has worked for more than a decade in both print and video journalism. He got his start in Beijing, where he worked as a copy editor and reporter for China Daily. He then returned to New York, where he earned his master's degree from the CUNY Graduate School of Journalism. Since then he's worked as a reporter for the New York Daily News and The Independent, as well as a video producer for the Daily Mail, the Daily Beast and Men's Journal.
Victoria Zhuang is the professional development reporter at Financial Planning. She has a bachelor's degree in comparative literature from Harvard University and a master's degree in journalism from Columbia Journalism School. Before joining FP, she freelanced as an arts and culture writer while working in the Boston nonprofit world for several years. She also completed a Dow Jones News Fund business reporting internship at American Banker. Victoria covers how wealth management firms maintain their competitive edge and how financial advisors can achieve excellence serving clients of all wealth levels. She is a native of New York City.
Dan Shaw is Financial Planning's wirehouse and bank channel reporter, covering the intersection of wealth management, banking and brokerages. His reporting background in regulation and disciplinary matters informs his coverage of compliance, recruiting and strategic shifts across the wealth management industry.
His reporting on advisor movement and recruiting at large financial firms earned a Folio Eddie Award.
His reporting includes:
- How headline EBITDA multiples are misleading RIA sellers
- Firms make billions from 'cash sweeps.' Could AI take that away?
- When everybody's a 'family office,' what's the term really mean?
Before joining Financial Planning, Dan served as managing editor of the Wisconsin Law Journal for seven years. He has also covered banking and local government in Indiana and spent two years on the business news desk at The China Daily in Beijing. His work has earned multiple awards from the Wisconsin Newspaper Association for business and legal reporting.
Based in Milwaukee, Dan is also a longtime banjo player in a bluegrass band that performs across the upper Midwest.
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.
