Abstract
We investigate motivational drivers of financial advisor use, accounting for investor heterogeneity, with the goal of helping institutions increase the use of financial advisor services. The results from a latent class choice model reveal two distinct segments that differ in their approach to the financial advice decision. While higher levels of risk tolerance, trust, and self-efficacy increase financial advice use for both segments, albeit at much higher propensities for Segment 1, personality only matters for Segment 1. Moreover, their regulatory focus differs with Segment 1 being promotion and Segment 2 being prevention focused. Using these results, we offer suggestions for marketing strategies.
Original language | English |
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Article number | 102014 |
Journal | Journal of Retailing and Consumer Services |
Volume | 54 |
Early online date | 26 Dec 2019 |
DOIs | |
Publication status | Published - 1 May 2020 |
Bibliographical note
Funding Information:We would like to thank Fatma Sonmez-Leopold for her contributions during the data collection stage and feedback. We would also like to acknowledge support from Social Sciences and Humanities Research Council and The Canadian Securities Institute Research Foundation. All views expressed in this paper are our own and do not necessarily reflect the position of any institution. Appendix : Construct Measurement Construct (inspired by) Items (factor loadings) Inter-item Correlations Average Range Perceiver ( Pompian and Longo, 2004 ) (1 = Mostly Judger, 5 = Mostly Perceiver) Where on the spectrum would you rank yourself in terms of the following statements: ⁃ I am happiest after decisions have been made - - - - - I am happiest leaving my options open (.386) ⁃ I have a work ethic; work first then play - - - - - I have a play ethic; play first then work (.496) ⁃ I prefer to know what I am getting into - - - - - I like adapting to new situations (.564) .24 .19–.29 Feeler ( Pompian and Longo, 2004 ) (1 = Mostly Thinker, 5 = Mostly Feeler) Where on the spectrum would you rank yourself in terms of the following statements: ⁃ I step back; apply impersonal analysis to problems - - - - - I step forward; consider effect of action on others (.453) ⁃ I value logic, justice, and fairness; one standard for all - - - - - I value empathy and harmony; see the exception to the rule (.634) ⁃ I naturally see flaws and tend to be critical - - - - - I naturally like to please others; show appreciation easily (.582) .32 .28–.35 Introvert ( Pompian and Longo, 2004 ) (1 = Mostly Extravert, 5 = Mostly Introvert) Where on the spectrum would you rank yourself in terms of the following statements: ⁃ I like being the center of attention - - - - - I avoid being the center of attention (.588) ⁃ I talk more than I listen - - - - - I listen more than I talk (.601) ⁃ I communicate with enthusiasm - - - - - I keep enthusiasm to myself (.616) .35 .33–.37 Optimism ( Scheier et al., 1994 ) (1 = Strongly Disagree, 5 = Strongly Agree) ⁃ In uncertain times, I usually expect the best (.499) ⁃ If something can go wrong for me, it will (R) (.651) ⁃ I'm always optimistic about my future (.665) ⁃ I hardly ever expect things to go my way (R) (.772) ⁃ I rarely count on good things happening to me (R) (.782) ⁃ Overall, I expect more good things to happen to me than bad (.724) .46 .27–.69 Trust in FA Substitutes ( Montmarquette and Viennot-Briot, 2012 ) (1 = Strongly Disagree, 5 = Strongly Agree) ⁃ I would trust the government (i.e. Canada Pension Plan/Quebec Pension Plan) for the management of my retirement savings (.570) ⁃ I would trust my employer for the management of my retirement savings (.692) ⁃ I would trust my financial institution (i.e. Banks, Trust or Credit Unions) for the management of my retirement savings (.692) ⁃ I would trust my insurance company for the management of my retirement savings (.763) .46 .38–.58 Self-Efficacy ( Montmarquette and Viennot-Briot, 2012 ) a (1 = Strongly Disagree, 5 = Strongly Agree) ⁃ I save or set aside an adequate part of my annual household income for retirement (.723) ⁃I am confident that I will have enough money to retire comfortably (.794) ⁃I have the knowledge, skills and confidence to make responsible financial decisions (.597) ⁃I am confident that I can differentiate good financial advice from bad financial advice (.496) .43 .29–.68 Positive Attitudes Towards FAs ( Montmarquette and Viennot-Briot, 2012 ) (0 = not associated with financial adviser, 1 = associated with financial advisor) Which of the following words do you associate with the term “Financial Adviser?" ⁃ Competent (.611) ⁃ Important (.517) ⁃ Friendly (.536) ⁃ ⁃ Professional (536) ⁃ Smart (.546) ⁃ Trustworthy or trusted (.738) ⁃ Honest (.717) ⁃ Dependable (.671) .37 .21–.58 Negative Attitudes Towards FAs ( Montmarquette and Viennot-Briot, 2012 ) (0 = not associated with financial adviser, 1 = associated with financial advisor) Which of the following words do you associate with the term “Financial Adviser?" ⁃ Unnecessary (.643) ⁃ Dull (.729) ⁃ Ego (.744) ⁃ Confusing (.644) ⁃ Detached (.677) ⁃ Salesman (.545) ⁃ Questionable (.693) ⁃ Disappointing (.758) .47 .31–.68 Notes. (R) - reverse coded. a Only item 2 is from Montmarquette and Viennot-Briot (2012) . The rest are original survey questions.
Publisher Copyright:
© 2019 Elsevier Ltd
Keywords
- Consumer heterogeneity
- Financial advisors
- Latent class choice model
ASJC Scopus subject areas
- Marketing