Impact of trust-building strategies on investment decisions: Mediating role of the financial advisor-client relationship
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DOIhttp://dx.doi.org/10.21511/imfi.21(4).2024.20
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Article InfoVolume 21 2024, Issue #4, pp. 254-266
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Creative Commons Attribution 4.0 International License
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.
- Keywords
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JEL Classification (Paper profile tab)G11, G23, D14
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References33
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Tables4
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Figures3
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- Figure 1. Conceptual model
- Figure 2. Measurement model
- Figure 3. Structural model
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- 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)
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