FORT WORTH, Texas--(BUSINESS WIRE)--Sequestration is driving record demand for professional financial advice in America’s career military.
The July results of the First Command Financial Behaviors Index® reveal that 27 percent of middle-class military families (commissioned officers and senior NCOs in pay grades E-6 and above with household incomes of at least $50,000) say they have started to work with a financial advisor as a result of sequestration. That’s up 11 points from the previous month, and it is the highest number recorded since the question was added to the monthly survey in January 2013.
“This growing interest in working with financial advisors is a notable development as it comes at a time of continued sequestration anxiety in middle-class military families,” said Scott Spiker, CEO of First Command Financial Services, Inc. “Concerns over cuts to defense spending and military pay and benefits are motivating career servicemembers to seek out professional help in their efforts to make positive changes to their family finances.”
Nine out of ten survey respondents say they are taking actions in their financial lives to address cuts to defense spending. In addition to starting to work with a financial advisor, they are:
- Increasing the amount they are saving (46 percent)
- Cutting back on everyday spending (38 percent)
- Moving investments to cash (24 percent)
- Decreasing the aggressiveness of their investments (23 percent)
Just 11 percent say they are not doing anything as a result of sequestration. That’s down 8 points from the previous month and is a record low.
Military families who work with a financial advisor are seeing positive results. They are saving money at a rate that is outpacing those without an advisor, and they are feeling better about their household finances.
During the second quarter, military families who work with a financial advisor put more money into:
- Short-term savings (76 percent versus 57 percent for those without an advisor). Monthly median contributions for the two groups are $475 and $315, respectively.
- Retirement savings (73 percent versus 54 percent). Monthly median contributions for the two groups are $400 and $269, respectively.
- Long-term savings (68 percent versus 34 percent). Monthly median contributions for the two groups are $400 and $200, respectively.
These strong savings efforts and other positive financial behaviors are helping families who work with a financial advisor to feel better about their finances than their do-it-yourself colleagues. They are more confident that their financial situation will improve in the next year (70 percent versus 37 percent) and in their ability to retire comfortably (67 percent versus 30 percent). They are also more likely to anticipate saving more (46 percent versus 28 percent) in the months ahead.
“Working with a trusted financial professional is a time-tested way to pursue positive changes in financial behaviors,” Spiker said. “Through face-to-face financial coaching, career military families learn to improve their own finances today and pursue a meaningful path to financial security tomorrow.”
About the First Command Financial Behaviors Index®
Compiled by Sentient Decision Science, Inc., the First Command Financial Behaviors Index® assesses trends among the American public’s financial behaviors, attitudes and intentions through a monthly survey of approximately 530 U.S. consumers aged 25 to 70 with annual household incomes of at least $50,000. Results are reported quarterly. The margin of error is +/- 4.3 percent with a 95 percent level of confidence. www.firstcommand.com/research
About Sentient Decision Science, Inc.
Sentient Decision Science was commissioned by First Command to compile the Financial Behaviors Index®. SDS is a behavioral science and consumer psychology consulting firm with special vertical expertise within the financial services industry. SDS specializes in advanced research methods and statistical analysis of behavioral and attitudinal data.
About First Command
First Command Financial Services and its subsidiaries, including First Command Bank and First Command Financial Planning, assist American families in their efforts to build wealth, reduce debt and pursue their lifetime financial goals and dreams—focusing on consumer behavior as the first and most powerful determinant of results. Through knowledgeable advice and coaching of the financial behaviors conducive to success, First Command Financial Advisors have built trustworthy, lasting relationships with hundreds of thousands of client families since 1958.
First Command Financial Services, Inc., is the parent of First Command Financial Planning, Inc. (Member SIPC, FINRA), First Command Insurance Services, Inc. and First Command Bank. Financial planning services and investment products, including securities, are offered by First Command Financial Planning, Inc. Insurance products and services are offered by First Command Insurance Services, Inc., in all states except Montana, where as required by law, insurance products and services are offered by First Command Financial Services, Inc. (a separate Montana domestic corporation). Banking products and services are offered by First Command Bank. In certain states, as required by law, First Command Insurance Services, Inc. does business as a separate domestic corporation. Securities products are not FDIC insured, have no bank guarantee and may lose value. A financial plan, by itself, cannot assure that retirement or other financial goals will be met. First Command Educational Foundation is a 501(c)(3) public charity. It is not affiliated with First Command Financial Services, Inc., or any of its affiliated entities.
