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Anne Sunikka, HSE Liisa Peura-Kapanen, NCRC 5 of September, 2008

National Consumer Research Centre. Investment triggers and trust A comparative study on perceptions of consumers and financial experts Presentation at IAREP 2008 at LUISS Rome. Anne Sunikka, HSE Liisa Peura-Kapanen, NCRC 5 of September, 2008. Overview of the presentation.

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Anne Sunikka, HSE Liisa Peura-Kapanen, NCRC 5 of September, 2008

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  1. National Consumer Research Centre Investment triggers and trustA comparative study on perceptions of consumers and financial expertsPresentation at IAREP 2008 at LUISS Rome Anne Sunikka, HSE Liisa Peura-Kapanen, NCRC 5 of September, 2008

  2. Overview of the presentation • Interview / Focus Group Themes and Research Questions • Methodology • Pertinent Concepts • Model of Investment Behavior • Discussion and Conclusion Anne Sunikka and Liisa Peura-Kapanen IAREP 5 Sept. 2008

  3. Interview / Focus Group Themes and Research Questions • Interview / Focus Group Themes • consumers’ perception of wealth • reasons for accumulating wealth and • perceived risks related to wealth management • Research Questions • What are the most common triggers for investment behavior? • What elements influence investment behavior? • In addition, comparison of the opinions and perceptions of two groups of informants Anne Sunikka and Liisa Peura-Kapanen IAREP 5 Sept. 2008

  4. Background information of the informants Anne Sunikka and Liisa Peura-Kapanen IAREP 5 Sept. 2008

  5. Pertinent Concepts • Involvement: ”The extent of interest and concern that a consumer brings to bear on a purchase decision task” (Mittal 1989). • Assumption: savings and investment products are highly and enduringly involving. • Information Search: ”The motivated activation of knowledge stored in memory or acquistion of information from the environment” (Engel et al. 1991). • Assumption: consumers are rational decision makers and capable of understanding the information they acquire. • Trust: ”Individual's willingness to accept vulnerability on the grounds of positive expectations about the intentions or behaviour of another in a situation characterized by interdependence and risk” (Ennew and Sekhon 2007). • Assumption: trust is essential for a relationship that is characterized by a high degree of uncertainty. Anne Sunikka and Liisa Peura-Kapanen IAREP 5 Sept. 2008

  6. Investment Triggers • Similar triggers mentioned • Importance of triggers differed • Previous personal experience • Friends, world-of-mouth • Family – not mentioned by low involvement consumers • Media – influential especially in portraying negative news • Internet – mentioned and found useful by high involvement consumers, distrusted by financial experts • Financial institutions and advisors – perceived as the most influential by financial experts and low involvement consumers. Anne Sunikka and Liisa Peura-Kapanen IAREP 5 Sept. 2008

  7. Involvement 2. Civil duty saver Low involvement High trust 4. Convenience-driven investor High involvement High trust Trust 1. Disinterested by-stander Low involvement Low trust 3. Cost-aware investor High involvement Low trust Investment triggers Anne Sunikka and Liisa Peura-Kapanen IAREP 5 Sept. 2008

  8. Involvement - Several information sources - Own FA appreciated - Partial distrust - Convenience - Complex instruments - Financial advisors, WOM - Recommendations - Convenience - Simple istruments Trust - Internet, several information sources - Independent decision-making - Fees, ROI - Complex instruments - No funds - Human capital - Ethical values - No action Investment triggers Anne Sunikka and Liisa Peura-Kapanen IAREP 5 Sept. 2008

  9. Discussion and Conclusion • Theoretical implications • Involvement: Investing is not necessarily highly and enduringly involving activity • Information search: Emotions play an important role in decision making & consumers do not understand all the information they access • Trust: Service providers and consumers emphasize different facets of trust, trust in engineering issues is not an issue • Mangerial implications • Importance of ”knowing your customer” • Marketing should be adapted to different groups • Elucidation of investment data is important • Trasparency of information increases trustworthiness • Internal human resource policies Anne Sunikka and Liisa Peura-Kapanen IAREP 5 Sept. 2008

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