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.
Alan Conway is the practice group lead for client delivery at Intapp. He helps firms drive profitability and maximize realization.
Robert Mazur is the New York Times best-selling author of "The Infiltrator," a memoir about his undercover life, much of which was spent acting as a conduit between ruthless drug barons and corrupt legitimate appearing senior executives that cleaned billions in blood- stained money through otherwise respectable international banks and businesses. For years, in the eyes of organized crime leaders he was a highly successful, mob-connected money launderer who helped manage their illicit fortunes. His clients, some of the most famous and deadly drug cartel bosses, issued a $500,000 contract on his life when arrests were made around the world and he was revealed to be a highly trained U.S. federal undercover agent. After completing a highly decorated 27-year career as a federal agent in three U.S. agencies, Mazur is now the president of KYC Solutions Inc., a firm that provides speaking, expert witness and consulting services to companies worldwide. More information about Mazur, his book and the film based on his life can be found at https://www.robertmazur.com/. The views expressed are his own.
Josh Jones is a manager and client-facing consultant at aspirant Consulting, LLC --- an Atlanta, GA-based consulting firm which specializes in data analytics. With more than a decade of industry experience as a consultant, developer, and team manager; he is proficient in developing solutions that transform data into business-relevant insights. Josh works primary in Tableau, relational databases, and teaching best practices between the two. For more information, please visit, www.aspirent.com. He can be reached at josh.jones@aspirent.com.
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.
