First Command Reports: Financial Confidence Holding Steady in Military Families

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The First Command Financial Behaviors Index® reveals that
middle-class service members who work with a financial advisor are twice
as likely as their do-it-yourself counterparts to feel their finances
will improve over the next year

FORT WORTH, Texas–(BUSINESS WIRE)–Despite continuing concerns over cuts in defense spending, America’s
career military families are feeling confident in the future with about
half expecting their financial situation to improve and to be able to
retire comfortably.

Second quarter results of the First Command Financial Behaviors Index®
reveal that 52 percent of middle-class military families (commissioned
officers and senior NCOs in pay grades E-5 and above with household
incomes of at least $50,000) expect their financial situation will
improve over the next year. Forty-eight percent express confidence in
their ability to retire comfortably.

Confidence levels are particularly strong in families that work with a
financial advisor. Military families with financial advisors are twice
as likely as their do-it-yourself colleagues to say they are extremely
or very confident that their financial situation will improve in the
next year (63 percent versus 31 percent) and in their ability to retire
comfortably (59 percent versus 25 percent).

“These heightened levels of confidence underscore the positive influence
of financial advisors as they coach service members to improve their
money behaviors,” said Scott Spiker, CEO of First Command Financial
Services, Inc. “We see this behavioral influence reflected in strong
savings habits. Career military families who work with a financial
advisor are out saving their do-it-yourself counterparts, reinforcing
the value of working with a professional. Strong money behaviors are
particularly important today when so many of our men and women in
uniform are uncertain about how sequestration may impact their household
finances.”

Seven out of ten career military households feel extremely or somewhat
anxious about cuts to defense spending, and three out of four already
feel financially affected by the cuts. The second quarter results reveal
that most military families say they are preparing for cuts in defense
spending, primarily by cutting back on every day spending and through
increased saving.

The Index® reveals that 73 percent of middle-class military families who
work with a financial advisor contributed to savings and retirement
accounts during the second quarter. That’s 24 points higher than those
who do not use an advisor.

Service members who work with a financial advisor are more likely to
contribute to:

  • Short-term savings (78 percent versus 54 percent for those without an
    advisor). Monthly median contributions for the two groups are $500 and
    $300, respectively.
  • Long-term savings (66 percent versus 32 percent). Monthly median
    contributions for the two groups are $300 and $213.
  • Retirement (74 percent versus 60 percent). Monthly median
    contributions for the two groups are $400 and $300.

Additionally, those with a financial advisor report $22,000 more in
accumulated savings and retirement funds than those without a financial
advisor, and they carry nearly $58,000 less in debt on average.

The financial behaviors, attitudes and intentions of career military
families held steady in the second quarter. These results were reflected
in the overall Index score of 134, which was statistically unchanged
from the first quarter. (The Index is set to a benchmark of 100, which
was assigned when the Index was launched in 2008.)

Looking ahead, positive financial behaviors are expected to continue in
the third quarter. And military families who use financial advisors are
more likely than others to say they will increase savings in the months
ahead (40 percent versus 28 percent).

“Our survey data continues to reveal that career military families can
enjoy greater financial confidence and readiness by working with a
knowledgeable professional,” Spiker said. “Taking action to feel better
about family finances is particularly important in the current
environment of military budget cuts. Families working with a financial
advisor continue to show far greater resilience towards the tumultuous
changes facing their financial futures.”

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. 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 Advisory Services, 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 Advisory Services, Inc., 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. , a broker-dealer. Financial planning and investment
advisory services are offered by First Command Advisory Services, Inc.,
an investment adviser.
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 Financial Services,
Inc. and its related entities are not affiliated with, authorized to
sell or represent on behalf of or otherwise endorsed by any federal
employee benefits programs referenced, by the U.S. government, or the
U.S. armed forces.

Contacts

First Command Financial Services, Inc.
Mark Leach, 817-569-2419
Media
Relations
msleach@firstcommand.com