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.
Sumit Punjabi is senior manager of RPA strategy, digital strategy and business transformation at NTT DATA Services. He is a management consultant with extensive global consulting experience spanning the breadth of robotics process automation strategy and roadmap definition, digital strategy assessments, customer journey re-engineering, business transformation, business process management, program management, change management and implementation of various policy level changes impacting the organization.
He has advised senior executives of leading global institutions on several strategic engagements, assessing the organizations business strategies, people, process and technology capabilities, identifying key client business issues, determining client needs, validating analysis and developing recommendations for the client in the context of the overall business strategy. He has extensively used Lean Six-Sigma and ITIL methodologies to analyze, improve and redesign solutions across business and IT process areas.
Sumit is an MBA from Indian School of Business and participated in a student exchange program with Tuck School of Business at Dartmouth University. He is also a Certified Six Sigma Black Belt (ASQ), Dell Certified Project Management Professional and Trained in ITIL v3.
Andre Sterley is a senior audit manager and practice leader for the digital asset group of Mazars USA based in New York City, as well as co-chair for the accounting and audit working group of the Accounting Blockchain Coalition. The Mazars Digital Asset Group was formed with the mission to help organizations navigate the complex accounting, tax, audit and other advisory issues related to digital assets, blockchain and distributed ledger technologies.
Brad Winges is the President and CEO of HilltopSecurities, a financial services firm and registered investment adviser in Dallas. Before joining HilltopSecurities, Winges was senior executive managing director at Piper Jaffray and a member of the company's leadership team.
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.
