How financial advisors affect behavioral loyalty

Abstract

PurposeThe purpose of this research is to contribute to the understanding of how customer contact persons influence attitudinal and behavioral loyalty in three different customer groups, who differ in terms of their motivation and ability to understand stock market information. The mutual fund product is one of last century's big success stories. Consumers invest a lot of money in complex financial products that they do not understand. Therefore, they need professional advice to make decisions.Design/methodology/approachThe study is based on a nationally representative random sample of mutual fund owners. The elaboration likelihood (EL) model predicts that high, moderate, and low elaborators are different. Three such customer groups were therefore analyzed.FindingsA path model shows that customer contact persons influence attitudinal and behavioral loyalty and that the impact is higher for high elaborators (higher knowledge and motivation to process stock market information) than for low elaborators. This suggests that the role of the contact person differs for different customer groups, i.e. the notion of multiple roles for variables.Research implications/limitationsFuture studies of complex services should acknowledge that different groups of consumers with different needs, preferences, and behaviors have different needs and preferences, and that they react differentlyPractical implicationsCustomer contact persons must be rewarded for delivering value to customers. Unless they do, they will loose their unique opportunity to influence customers' decisions. They must adapt their communication to different customer groups, and acknowledge that the perception of what is valuable advice may differ.Originality/valueThis paper demonstrates that a very simple and easy to use model can show the value of customer contact persons. All linkages in the model are tested, which is not done in prior research. In addition, different groups of consumers have different needs, preferences, and behaviors, a fact that is almost never acknowledged in prior research.