First Command News & Media
FOR IMMEDIATE RELEASE — Feb. 3, 2016
First Command Reports: Career service members socking away more dollars for the future
The First Command Financial Behaviors Index® reveals that military families who work with a financial advisor are saving more than their do-it-yourself peers
FORT WORTH, Texas –The savings drive of America’s career military families remained strong in the third quarter of 2015, with those who worked with a financial advisor leading the way.
The First Command Financial Behaviors Index® reveals that roughly seven out of ten middle-class military families (commissioned officers and senior NCOs in pay grades E-6 and above with household incomes of at least $50,000) contributed to retirement and savings accounts during the third quarter. These savings efforts continued a positive trend that had emerged over recent quarters, and they helped service members and their families feel more confident that their financial situation will improve in the next year (62 percent, up eight points from a year ago) and they’ll be able to retire comfortably (59 percent, up nine points).
Families who work with a financial advisor proved to be particularly committed savers. The Index reveals that 78 percent of those with a financial advisor put money into retirement accounts during the third quarter. This compared to just 56 percent for those without an advisor. Notably, service members with a financial advisor put significantly more dollars into those retirement accounts. Monthly median contributions for savers in the two groups were $500 and $400, respectively.
Service members who worked with a financial advisor were also more likely to contribute to:
- Short-term savings (79 percent versus 55 percent for those without an advisor). Monthly median contributions for the two groups were $500.
- Long-term savings (73 percent versus 39 percent). Monthly median contributions for the two groups were $500 and $200, respectively.
Commitment to reducing debt was also stronger among those who worked with an advisor. They were more likely to pay down:
- Short-term debt (78 percent versus 70 percent).
- Long-term debt (75 percent versus 59 percent).
Conversely, those without an advisor were feeling compelled to pay greater amounts towards their debt. Monthly median contributions to short- and long-term debt repayment were $1,100 for those with an advisor and $1,950 for those without.
The strong savings and debt repayment efforts of those families who worked with a financial advisor helped them feel more confident than their do-it-yourself colleagues. They were more likely to believe their financial situation will improve in the next year (65 percent versus 48 percent) and in their ability to retire comfortably (65 percent versus 35 percent).
Positive financial behaviors and intentions helped propel the overall Index score ahead seven points to a record high of 158 for the third quarter. The score for those with a financial advisor was 170. The score for the do-it-yourself crowd was 113. The Index is set to a benchmark of 100, which was assigned when the Index was launched in 2008.
“The First Command Financial Behaviors Index continues to underscore the critical role a knowledgeable financial professional can play in helping service members improve their own money behaviors and feel more optimistic about the future,” said Scott Spiker, CEO of First Command Financial Services, Inc. “Financial advisors are helping their career military clients learn to cut debt and spending in order to save for near- and long-term needs and pursue their own path to retirement security. These families are taking the kinds of positive actions that make consumers feel more confident in their own finances.”
About 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. http://www.firstcommand.com/fbi/
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.