Impact of trust-building strategies on investment decisions: Mediating role of the financial advisor-client relationship

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Trust is a fundamental element in financial interactions, particularly in the advisory sector, influencing investment decisions and overall client satisfaction. This study aims to explore the impact of trust-building strategies on investment decisions through the financial advisor-client relationship. The research employs a structured questionnaire to gather data on trust-building strategies, the advisor-client relationship, and investment decisions. The study found that trust-building strategies, such as transparency and competence demonstration, positively influenced investor decisions. Specifically, 78% of investors reported increased confidence in their investment choices after engaging with advisors who prioritized transparency and expertise. Moreover, 85% of investors indicated a preference for advisors who demonstrated reliability and ethical conduct, leading to a stronger advisor-client relationship. The findings underscore the importance of trust in financial advisory services and suggest that enhancing trust through transparent practices can lead to more informed and collaborative decision-making processes. The study emphasizes the evolving nature of investment decision-making and proposes integrating technological innovations like AI and robo-advisors. The study provides valuable insights for financial institutions to invest in advisor training and guidance, benefiting all stakeholders involved.

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    • Figure 1. Conceptual model
    • Figure 2. Measurement model
    • Figure 3. Structural model
    • Table 1. Description of participants
    • Table 2. Discriminant validity
    • Table 3. Path coefficients
    • Table A1. Factor loadings, alpha coefficient, Composite Reliability (CR), and Average Variance Extracted (AVE)
    • Methodology
      Abhinandan Kulal, Habeeb Ur Rahiman, Ujwala Kambali
    • Project administration
      Abhinandan Kulal, Niyaz Panakaje, S. M. Riha Parvin
    • Supervision
      Abhinandan Kulal
    • Visualization
      Abhinandan Kulal, S. M. Riha Parvin, Ujwala Kambali
    • Writing – original draft
      Abhinandan Kulal, Habeeb Ur Rahiman, Niyaz Panakaje, S. M. Riha Parvin, Ujwala Kambali, Madhura K., Abhishek N.
    • Writing – review & editing
      Abhinandan Kulal, Habeeb Ur Rahiman, S. M. Riha Parvin, Ujwala Kambali, Madhura K., Abhishek N.
    • Conceptualization
      Habeeb Ur Rahiman, Madhura K.
    • Software
      Habeeb Ur Rahiman, S. M. Riha Parvin
    • Formal Analysis
      Niyaz Panakaje, Madhura K.
    • Validation
      Niyaz Panakaje
    • Data curation
      Ujwala Kambali, Abhishek N.
    • Investigation
      Madhura K., Abhishek N.
    • Resources
      Abhishek N.