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

Abstract

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

• advisor-client relationship
• competence
• ethical conduct
• financial advisory
• investment outcomes
• investor decisions