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Consumer perceptions of financial advisers: A
critical evaluation of the role of technology
Kevin Barry Regan
Masters of Business Administration (MBA)
2014
Dundee Business School, Abertay University

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A critical evaluation of the role of
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Dundee Business School
DECLARATION OF ORIGINALITY
I declare thatthe followingDissertationisall myownworkand has not been copied or plagiarised from
any other source. In addition I have read and understood the University’s Academic Deceit Policy and
Procedures and have fully complied with all of its requirements in this Dissertation.
Matriculation Number: 1306863
Course: MBA
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Name: KevinBarryRegan
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Contents
Dundee Business School.....................................................................................................................3
DECLARATION OF ORIGINALITY ..........................................................................................................3
1. Abstract......................................................................................................................................5
2. Introduction ...................................................................................................................................9
3. Literature Review......................................................................................................................11
3.1Using Behavioral Finance to Explain Investment Decisions..........................................................11
3.2 The Impact of Financial Literacy ...............................................................................................13
3.3 Portfolio Performance and Trust ..............................................................................................14
3.4 The Role of Technology............................................................................................................16
4. Methodology................................................................................................................................19
4.2 Research aims and hypotheses.................................................................................................19
4.3 Research design ......................................................................................................................20
4.4 Survey Method........................................................................................................................24
4.5 Pre-test...................................................................................................................................25
4.6 Sample and Location ...............................................................................................................26
5. Analysis and Discussion.................................................................................................................27
5.1 Respondent profiles.................................................................................................................27
5.2 Values for Financial Advice.......................................................................................................30
5.21 Behavioral Values...............................................................................................................30
5.22 Financial Literacy ...............................................................................................................32
5.23 The Value of Trust..............................................................................................................34
5.24 Value of Performance.........................................................................................................35
5.3 The Role of Technology in the Financial Planning Relationship .................................................36
5.31 Important Features of a Client Portal ..................................................................................36
5.32 Effect of Technology on the Consumption of Financial Advice...............................................39
5.33 The use of web-based financial planning software ...............................................................40
6. Conclusion and Further Research...................................................................................................42
7. References ...................................................................................................................................44

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1. Abstract
A sample of 205 individualswasanalyzedtoascertaincurrentperceptionsof the financial
servicesindustry. Buildinguponpreviousresearch,demographicvariableswereusedtodiscoverwhich
segmentsof the populationcurrentlyuse afinancial planner. Income,level of investable assets,and
level of educational attainmentwere foundtohave significantrelationshiptothe likelihoodof
consultingafinancial professional,supportingresearchbyElmerick,etal.,(2002);Chang (2005); and
Hanna (2011). Genderandage showednostatisticallysignificanteffectonthe decisiontoconsult
financial advice,contradictingresultsbyHanna(2011) and Chang(2005) that suggestwomenandthe
elderlywouldbe more likelytoseekfinancial advice.However,whenpressedforthe reasonsfor
decidingnottouse a financial advisor,maleswere more likelytobelieve intheirownabilitytomanage
investments,suggestingamale overconfidencealsofound(BarberandOdean2001).
A growingbodyof research,Lusardi andMitchell (2007, 2104,); Calacagnoand Monitcone
(2014), suggests alack of financial literacyinthe UnitedStates. Shouldfinancial advisors,whohave
asymmetrical informational advantagesinregardstotheirclients,withholdsuchinformationorengage
customersin education?Respondentsoverwhelminglyindicatedthatincreasedfinancial literacywould
eithermake themmore willing,orhave noeffect,onthe decisiontoconsulta professional financial
advisor. These resultssuggestfinancial literacyshouldbe seenasa complementto,ratherthana
replacementfor,professional financialadvice (Willis2008, 2011; Collins2012).The financial services
industryingeneral wouldbenefitfromagreaterpublicunderstandingof itsservices.Inregardsto
gainingeducational accessthroughinteractive technology,nearly90% of respondentsindicatedthey
woulduse resourcestoincrease literacy,butstillretainthe servicesof afinancial planner,further
indicatinganopportunityforthe industrytoeducate itsconsumers.
As TverskyandKhanemen(1974) demonstrated,mostpeople fall subjecttobehavioral biases
and heuristics.Consumersare notalwaysrational decisions makers.Expandingfromthis initial research,
the fieldof behavioral finance hashelpedexplainindividuals’investmentdecisions. Researchershave
shownhow individualssufferfromoverconfidence (Garling,etal.,2009), anxiety(Gambetti and
Giusberti 2012), and inertia(Benartzi 2012). Researches,including Mardsen,etal.,(2011) and
Hackenthall,etal.,(2012), suggestthatfinancial plannersadoptarole as a behavioral coachorfinancial
psychologistmore thananinvestmentguru.Inthat note,respondentswere askedtorankona Likert
scale the valueseachindividual placedoncertainservicesofferedbyaplanner.Overall,individuals

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placeda highermeanvalue rankingonbehavioral valuessuchastrust,preparedness,reducingfearof
investingovernumerical,orreturn-basedmetrics,suchasoutperformingthe marketorcertain
benchmarks.These resultsindicate supportforpreviousresearch,andsuggeststhatthe investment
advisoryindustryfocusona more holisticapproachtomanagaingand engagingclients.
The last parts of thisresearchsoughtto determine how technologywaschangingthe financial
advisoryrelationship.Partcipantswere askedwhattechnological featurestheywouldlike tohave access
to throughan advisor,andif these technologieswouldmake themmore orlesslikelytoconsultan
advisor.Finally,participantswere askedif theywouldbe willingtouse a completelyautomized
investmentmanagementsystem,similartorecentlyfoundedcompanieslike Wealthfrontand
Betterment. Hamilton(2012),Savikhin(2008,2011), and Scott-Brown(2012) showedthatvisual
analyticscouldbe employed tohelpconsunmrsmake more optimal investmentdecsions. Respndents
gave the highestmeanvalue raningstolinkingall financial accountsinone place (5.49),andto the
abilitytoscenariotestwithreal data(5.31). Comparingportfolioreturnstobenchmarketsreceivedthe
lowestmeanvalue ranking(4.79).Thisdatahelpshow that consumerswouldvalue the opportunityto
interactmore withtheirfinancial data,andalsolentsupporttothe notionthatbehavioral valuesstill
have more supportthan pure investmentperformance.
Whenaskedif access to technologywouldmake apersonmore likely,lesslikely,orhave no
effectonthe decisiontouse a financial advisor, 33.8% of people claimesincrease use of technology
wouldmake themmore likelytouse afinancial planner,and 50.4% claimeditwouldhave noeffect.
Thisdata supportsthe notionthat the populationasa whole wouldvalueamore interactive role ina
relationshipwith afinancial advisor,andthatincreasedaccesstotechnologyshouldnotmake the
traditional role of afinancial plannerirrelevent. However,astatisticallysignificantassociationexisted
betweengenderandandwhethertechnologywouldinfluence the decisiontoconsultafinancial
planner.27% of malesindicatedthatanincreasedaccessto technologywouldleadtoadecrease need
infinancial professional, comparedtojust11% forfemales, supportingthe researchbyBarberand
Odean(2001) indicatingmalesare more likelytobe overconfidentandmanage theirownfinances.
Interestinglythere wasnorelationshipbetweenage anf the effectof technologyonthe decisiontouse
a financial planner,rejectingthe hypothesisthatyoungerindividualswouldbe more likelytoise
technologytomanage theirownfinancesandforgothe traditional financial advisoryrelationship.
In orderto more specificallydiscoverindividuals’propensitytouse a new webbasedfinancially
planningsystemsuchasBettermentorWealthfront, the participants were giventhe followingprompt:

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“There are manynewweb­basedapplicationsthatuse computersoftware tomanage aclient's
investmentportfolio.The softwareletsyouinputyourpersonal dataandwill automate manyof the
actionscompletedbyafinancial advisorincludingselectinginvestments.The applicationsuse algorithms
and formulastoconstruct efficientportfolios.The applicationsgenerallyuse low cost indexfundsand
therefore charge lessinfeesthantraditional financial advisors”
The participantswere fairlyevenlysplitonwhethertheywouldconsiderusingsuchservices,
with46.7% choosingyesand53.3% choosingno.A Chi squaredtestforassociationwaschosentosee if
there wassignificantrelationshipbetweenanyof the groupingvariablesandthe responses. Of the
variablesage,gender,andincome,noneprovedsignificant,helpingtorejectthe hypothesisthat
younger,lesswealthyindividualswouldbe more willingtouse sucha service.Forthe participantswho
responded‘no’, feelingmore confidentinusingafinancial plannerandbelievingafinancial planner
wouldprovide abetteroverall service hadthe highestlevelof agreement;despite this,the sample
indicatedthattheydidnotfell the situationwouldbe toocomplicatedforthe webbasedplatform. For
the participantswhochose ‘yes’,costandconvenience remainedthe primaryreasons,althoughthis
sample believedafinancial plannerwouldstill provide abetteroverallservice.
Thisstudyprovidedsome usefulinsightintothe demographicsof the populationthatuse
financial planningservices,the reasonstheychoosetouse suchservices,andthe effectfinancial literacy
and technologywouldhave onthatrelationship.Helpingtoconfirmpreviousstudies,olderand
wealthierindividualsare more likelytohave consultedafinancial planner.Overall,the samplebelieved
increasedfinancialliteracywouldmake anindividualeithermore likely,orhave noeffecton,the
decisiontouse a financial planner.Thiswouldsuggestthe industryingeneralwouldbenefitfroman
increase inthe general public’sunderstandingof personal finance,perhapsshowingthe population the
complexitiesof the fieldandthe needforprofessional advice.The sample indicatedasimilarresponse
to the increasedaccessto technology,withthe majorityindicatingitwouldmake anindividual more
likely,orhave noeffecton,the decisiontouse afinancial planner. Asparticipantsindicatedsupportfor
a more interactive basedplatform, the industryshouldcontinuetotryto engage consumerswith
increaseduse of technology,asitonlyappeartostrengthenthe advisoryrelationship. Finally,the
sample wasfairlyevenlysplitonthe likelihoodof usingaweb-basedfinancialplanningapplication.Trust
and confidence inanadvisorgatheredthe mostsupportforthose whodidnotsupportthe notion,
whereascostand convenience were the primaryreasonsforthose willingtouse suchan application.
However,there wasnorelationshipbetweenage andwealthonthe likelihoodtouse webbased

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financial planningapplications.Thishelpstorejectconventional wisdomthatayoungergeneration
wouldbe unwillingtoconsult afinancial plannerinperson,butalsorejectsthe notionthatolder
consumerswouldnotbe willingtoadoptsuch services.Financial plannerswoulddowell tounderstand
thisparadox.Youngergenerationsstill seemtovalue the traditionalrole of afinancial advisor,andolder
generationsare quickly adaptingtothe use of technologyandshouldnotbe forgotteninthisprocess.
Althoughfinancialplannerscouldnotcompete oncostwithweb-basedinvestmentmanagement
platforms,the industrywouldbenefitfromincreasingitsconvenience,itsadaptationof technology,its
role as an educational leader,anditsabilitytoprovide the consumerwhatawebsite lacks:the abilityto
provide anoverall service package andtohelpovercome the behavioral andjudgmental faultsof its
clients.

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2. Introduction
The fieldof personal financial advisingiscurrentlyunderdramaticchanges.Increasingly
powerful and accessibletechnologyhas broughtthe computingpoweronce usedonlyinlarge financial
institutionsavailable tothe average consumer. Rasmusen(2014) describesthe new applications:
“In the same way siteslike Mint.comhave triedtotake overpersonal householdaccounting,
thiswave of newonline advisoryfirmsinthe pastfouryearshastakenthe logica stepfartherby
automaticallyinvestingclientmoneyindiversifiedinvestmentstrategies,usingslidersforgoalsandrisk
tolerance,theninvestinginETFsaccordingto what the algorithmsandcalculatorsdecide isthe best
risk/rewardprofile forthe customer”
Along with the rise of these new competitors, the financial industry as a whole has struggled to
regain its trust with the consumer after the 2008 financial crisis. Banks and financial services
were the two least trusted industries in the U.S., while technology remained the trusted
industry (Edelman, 2012). In this new environment, does the consumer still value the role of a
professional financial advisor?
Another emerging trend in the United States is the push to achieve personal financial
literacy. Ben Bernake, then Chairman of the U.S. Federal Reserve Bank, claims:
. “In light of the problems that have arisen in the subprime mortgage market, we are reminded
of how critically important it is for individuals to become financially literate at an early age so
that they are better prepared to make decisions and navigate an increasingly complex financial
marketplace”
Yet, financial professionals receive year of training in order to navigate such a complex
marketplace. Can we expect consumers to have the same expertise in their own daily lives?
Also, conceptually, one would believe that an increase in an individual’s personal financial
literacy would lead to a decrease in the use of professional financial advice. However, literature
reviewed in the next session suggests the opposite effect. I try to explore to what extent
individuals’ value increasing their understanding of financial products and services, and what
effect this will have on their decision to us financial advice.

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Technology is changing the traditional role of the financial advisor. Along with the rise of
new competitors, financial advisors now have many varied means of communication and
powerful technology at their own disposal. I try to explore the role of technology in this
relationship. What do consumer’s value in terms of features in a client portal? Will increased
access and use pf technology make individuals more or less likely to use a financial advisor?
Finally, this study seeks to explore if any individuals would be likely to use a service similar in
feature to companies such as Wealthfront and Betterment. In order to explore these trends, I
have issued a survey to discover who currently uses the services of a financial professional and
for what reasons do they choose to utilize those services, and to what extent this changing
landscape will cause people to modify their traditional role in the advisor/ advisee relationship.

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3. Literature Review
3.1Using Behavioral Finance to Explain Investment Decisions
Much of the basisof modernfinancial theoryderivesfromthe theoryof marketefficiency,
where individualsbehavefullyrational andthereformake optimal investmentdecisionsbasedon
available information.However,the efficientmarkethypothesisdoesnotalwaysstandupto close
scrutiny,nordoesit explainthe existence of bubblesandmarket failures suchasthe crash of 2008
(Shiller,2003; Tversky& Khanemen,1974) . Academicshave beguntouse psychological factorsasa way
to explainthe irrationalbehaviorsof investors. KhanemenwonaNoble Prize forhiswork,showinghow
individuals are susceptibletocognitive illusionsinthe same waywe fall preytooptical illusions
(Benartzi,2012). Researchshows that,“a growingnumberof economistsrecognizethat apsychological
perspective is necessaryineconomicanalysis”(Garling,etal.,2009, p. 32). Thisnew breedof economist
has borrowed ideasspecificallyfrom the sociology fieldof psychology.Otherbelieve,“behavioural
finance hasa pragmatic aim – decision-makinganalysis…[it]shouldnotbe lookedintoasa wayof
generatinginstantreturns,but ratherasa way of approachingor usingthe knowledge tounderstand
decision-makingprocesses”(DeBondt,etal.,2010, pp.31-32). The researchhas suggestedanew wayof
perceivinginvestorbehavior,andthereforeanew wayfor financial service professionalstoapproach
clientrelationships.
Gärling,etal., (2009) showedhow cognitive biasessuchasoverconfidence,over-optimism,
biasedinformationsearch,aswell asmoodandsocial forcesall effectinvestorbehaviorandleadtoover
tradingand inefficiencyinfinancialmarkets. Gärling,etal.,wouldcontinuetodescribe that,“people
highinsensationseeking, extraversion,andopennesstoexperience are likelytotake more andhigher
financial risks,whereaspeople highinconscientiousness,anxiety,andneuroticismare likelytotake
fewerfinancial risks (2009, p. 6). Gambetti and Giusberti (2012) followedthatresearch,usinga
psychometricscale asevaluation,andfoundpersonsdisplayingtraitsof angerandhostilitydisplayed
more risk-takinginvestmentbehavior,butalsomade more efficientlong-terminvestments.Incontrast,
individualsdisplayingthe trait of anxiety “perceivefuture situationsasuncertainand unpredictable”and
are likelytorefrainfrommakinginvestmentdecisionsall together (Gambetti&Giusberti,2012, p.
1068). KlementandMiranda(2012) show that life experience will change aninvestor’sriskpreference.
Otherresearchershave shownthatindividualswithaninternal locusof control (LOC) believeintheir
ownactionsand will thereforepursue optimal investmentstrategies,whereas individualswithan

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external LOC,whobelieve theiroutcomesresultfromoutsideforces,will be lesslikelyto“masterthe
skillsnecessarytoaccomplishtheirgoalsordemonstrate goal-directedarousal”(Perry&Morris,2005,
p. 300). ShihandKe (2014) explainhowaconsumer’s attitudes towardmoney,whichcanvary greatly,
evenat the same income level,affectparticipationinfinancialmarkets.
The emergence of the psychologicaltraitsof riskor lossaversionmaybe the mostimportant
contributionof behavioralfinancetothe personal financialindustry. TverskyandKahneman (1974)
showedthatthe functionforlosseswasapproximatelytwiceassteepasthat forgains.A rational
investorshouldfeel indifferentthat,giventhe same 50% probability of occurrence,inwinningorlosing
$100. However,KhanemenandTversky’sworkshowedthatthe majorityof individualswould needthe
possibilityof a$200 gainto offsetthe riskof a loss.Benartzi explains,“Psychologists speculate thatloss
aversionmakessense intermsof evolutionandsurvival:bettertobe cautiousand give thatsaber-
toothedtigera wide berthratherthantake the riskof confrontingitbyyourself.Whateveritsorigin,
lossaversionaffectsmanyof ourdecisions,includingfinancial ones”(2012, p. 5). Thisresultsinmany
sub-optimal investmentbehaviors.Individualscansuccumbto inertia,where the fearof riskparalyzes
all decisions.Likewise manyinvestorschoosenottosell a stockafterit has lostvalue,due tothe pain
fromactuallyrealizingthe loss,whereastheymightsell againto early,therebyrealizingagainand a
pleasurable feeling.These decisionsstrayfarfromthe optimal,rational decisionsbasedonthe optimal
selectionof aportfolio.
The literature also suggestsnew waystoview the client-advisorrelationship. Academicshave
suggested:“Financialadvisorsare like clinical psychologistswhose servicesare of value perse.They
encourage people to examine theirmostbasicdesiresandpriorities,establish concretegoals,withstand
(andeventakenadvantage of) adverse events,andfeelconfidentabouttheirfuture”(Mardsen,etal.,
2011, p.640). Othershave concludedthat, “the contextsshare commonalityinthatthere isadvice-
giving/takinginarelationshipbetween aprofessionalandalayman,informationissensitive,riskis
present,andthe purpose isto arrive at an actionplanfor the advice-taker”(Sodberg,etal.,2014, p.
246). Financial advisorsshouldacknowledge theirowncognitivebiases,as these professionalshave
beenshowntoexhibitmyopic,riskaverse behaviorandalsopassthese traittothe consumerswith
whomtheywork (Siebenmorgen&Weber,2003; Eriksen& Kvaloy,2010). So, ratherthan basingthe
relationshipsolelyonportfolioreturnandassetgrowth,advisorsshouldview theirrole more asa
consultantor mediatorinthe financial markets.Byknowinginvestorbiasesininvestment decisions,and

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recognizingtheirown,advisorscanworkto create a more comprehensive planningapproachtoaddress
not onlythe value of client’sportfolios,butalsotheiremotional well-being.
3.2 The Impact of Financial Literacy
As the retirementmarketinthe UnitedStates hasswitchedfromdefinedbenefitsystemssuchas
pensionto defined contributionplans,individualshave beguntoassume the role of directing
investments towards one’retirement.Therefore,consumermustnow take individual responsibilityto
choose the amounttheysave and investamongstacomplex menuof financial products(Cole &Shastry,
2008). Finke (Finke,2012,p. 1) has arguedthat thisrepresentsan opportunity forthe financialservices
industry:
“Householdsare facedwithgreaterresponsibilityforfundingretirementthroughanincreasingly
complex mix of financial instruments.Makingthesedifficultchoicesontheirownwouldrequire an
investmentinspecificfinance-relatedhumancapital thatisneitherefficientforthe householdnorfor
society.Giventhe large potential lossinwelfare frompoorfinancial decisions,rentingthe expertiseof
financial professionalsshouldbe evenmore commonthanseekingthe servicesof anattorneyoran
accountant”
Researchconcludesthe majorityof Americanslack the appropriate financialliteracy tomanage the
complexity of retirementplanning (Willis,2011; Hathaway& Khatiwada,2008). Hastings,et al., (2013),
usingdata froma national survey,foundthatonly39% of respondentscouldanswerthree basic
questionsmeasuringfinancial literacy.The same surveyshowedthat consumersrankedtheirownability
inunderstandingfinancial mattershigh,with69% of respondentsratingtheirabilityhightoexcellent
(FINRA InvestorEducationFoundation,2009).The disparitybetweenthe individual’sbelief andthe
actual data suggestconsumersmayevenlackthe knowledge of financial marketstoaccurate assestheir
ownshortcomings. Therefore,some have suggestedpromotinganincrease infinancial education to
increase consumers’ knowledge of acomplicated marketplace tobettermaximizetheirdecisionsand
improve publicwelfare. However,howfinancial educationshouldbe promoted,andwhetheritwill have
the desiredeffects,have notyetbeen conclusively answered.
Lusardi and Mitchell state,“Ordinaryconsumersmustmake extraordinarilycomplexfinancial
decisionsonadaily basis,yetrecentresearchshowsthattheyoftenmake these decisionswithoutwhat
wouldseemtobe essential financialknowledge (2007,p. 2)” Yet,wouldimprovedfinancial literacylead
to betteroutcomes,andat whatcost? Cole andShastry (2008)found noeffectformgovernment-

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mandatedfinancial literacyprogramsinhighschool onpersonal savingdecisions.However,the authors
concludedthatlevelsof educationandcognitive abilitywere important indicatorsof financial market
participation. HathawayandKhatiwada(2008)foundthatgreaterfinancial knowledge didleadtobetter
financial behavior,butcouldnotshowthatfinancial literacyprogramscouldfill the gapforthe financial
illiterate. Lusardi andMitchell (2014) laterfoundhigherdegreesof financial literacyassociatedwith
betterretirementplanningandaccumulationof wealth. Lusardi andMitchell alsoconcluded thatalack
of knowledge ledtopoorsavingsandinvestment decisions aswell asthe increase indebtandcredit
card usage.
One mightbelievethatincreasesinconsumereducationwoulddecreasethe needforfinancial
advice.Thiswouldsuggestthatadvisorshave benefited fromholdingasymmetricinformation
advantages,andthat well-informedconsumerswouldbe more inclinedtomanage theirownfinances.
Yet,a growingbodyof researchhas suggestedthe opposite;thatanincrease infinancial literacyleadto
a greaterconsumptionof financial advice.ShihandKe (2014) foundthat the level of financialliteracy
was the mostimportantfactor inthe decisiontoseekinvestmentadvice. BellandEisingerich (2007)
showan increase ineducation,andthereforeexpertise,hasincreasedloyaltyininvestmentservices.
Collins(2012) and Finke (2012) have arguedthat financial educationshouldserveasa complementto,
rather thana substitute for,the advice of atrainedfinancial professional.Winchester,etal.,believe
“resourcesspentonincreasingthe financialliteracyof individualsmaynotbe the bestapproach to
helpinginvestorsovercome theirbehavioral biases.Publicfunds maybe betterspentmaking
professionalfinancial services affordable forthe massesratherthanfocusingon financial literacy
educationalone (2011, p.49). These resultsindicatethatthe financial advisoryindustrywouldbenefit
froman increase inthe general public’sknowledgeof personal finance.Perhapsawell-educated
consumerwouldunderstandthe benefitsfromproperfinancial planning.Advisorsin practice couldseek
to bettereducate andinvolve theirownclients,therebycreatingmore loyalty andincreasingsatisfaction
intheirclients.
3.3 Portfolio Performance and Trust
The previoussectionshave shownthatbothbehavioralbiasesandfinancial educationwill have
an effectonthe relationshipbetweenfinancial advisorsandtheirclients. Trustandinvestment
performance will alsohave animpactonthisrelationship. Finke(2012,p. 2) claims, “Theoretically,a
householdhiresafinancial adviserif the expectedincreaseindiscountedlifetimeutilityfromreceiving
professionaladvice exceedsthe expecteddiscountedcostof feesandexpensesleviedbythe adviser”.

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But where doesaconsumerreceive thatutility?Hackenthal,etal., (2012) foundthat investorswhoused
financial advisors hadlowerreturnsafterexpenses.Kramer (2012) alsofoundthatno effectonportfolio
performance whileMardsen,etal., (2011) foundno shortterm growthinassetvalues. Bodnarukand
Simonov (2012)showedthatfinancial advisorsdidnotoutperformthe average investorevenintheir
ownpersonal investments. ChalmersandReuter(2012) discoveredthatadvisordirectedportfolioshad
lowerreturns,netof fees,andalsowere directedintofundswithhighercommissionratesthanself-
directedinvestments. Likewise Mullainathan,etal., (2012) foundthatfinancial advisorswouldactin
theirowninterestanddirectinvestorsawayfromefficient portfoliosinordertoincrease commissions.
Mullainathan,etal., (2012, p. 4) continue:
“Advisersmayprovide manyotherbenefitsfortheirclients,forexample,bygivingthemthe
confidence toinvestinthe firstplace,byprotectingthemfromlosing moneyinfraudulentfunds,orby
reducingtransactioncosts.These reasonsmightbe asimportantas the actual contentof the advice
Thissuggeststhatfinancial advisorsdoaddvalue totheirclientsbesidesportfolioperformance.A
growingbodyof researchdiscussesthisvalue addedactivity.”
Many researchershave found thatusingprofessional adviceleadstogreaterdiversification,and
therefore avoidablerisk,ininvestors’portfolios (Mardsen,etal.,2011; Kramer,2012; Hackenthal,etal.,
2012; Calcagno& Monticone,2014). Doesthe value of diversificationoutweighthe potential lossof
returnor the cost of fees?Maybe not,but perhapsthe advisor’sprimarygoal shouldnotbe tocreate
excessreturnsinhisor herclient’sportfolio. Collinscontends“the impactsof advice extendbeyond
financial returnstoinclude non-pecuniaryfactors”(Collins,2012, p. 310). Winchester,etal., (2011)
showthat investorswhouse professional advice have betterassetallocationandreallocation,as well as
receive helptoovercome the impulsestobehave irrationally. Finke,Huston,andWaller (2009) findthat
usinga financial plannerleadsto more comprehensiveinsurance coverageandriskmanagement. These
studiessuggestadifferentrationalefor seekingfinancial advice.Perhapsconsumerswouldplace greater
value byconsideringafinancial plannertobe like afinancial therapist[insertworkingalliance here]
helpingthemovercomecognitive biasesandcreatingvalue beyondthe simple statistics of portfolio
returns.
The role of trust inthe financial advisor/clientrelationshiphasreceivedlittle attentioninthe
academicliterature,althoughit remainsamainconcernwiththe general public].A surveybyState
StreetGlobal Advisors (2006) showedthat69% of consumersplacedtrustas the most important
characteristicinan advisor,more thanperformance andunderstandingthe consumer’ssituation.

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Finance wasreportedasthe leasttrustedindustryinthe UnitedStatesforthe thirdyearina row
(Harper,2013). However,thisencompassesbothlarge banksandfinancial servicescompanies,and
perhapsnotthe role of an individualadvisor.Krishnan,Ramaswamy,Meyer,andDamien (1999) found
customersatisfactionwithfinancial companiestobe dependentof productofferingsand clientservice.
Llewellyn (2005)showedhowbuildingtrustisa competitive necessary:“financial transactionsare
fundamentallydifferentfrommostothereconomictransactions…trustandconfidence are central
ingredients”(p. 334). Llewellynalsonotesthatthe presence of asymmetricinformationandthe
complexityof financial productscreatesagreaterneedfortrustinboth the salespersonandthe
financial institution,andcouldprovide firmswithacompetitive advantadge. Likewise,Lachance and
Tang believe,“several factorsmake trustparamountina financial context:large sumsof moneyare
entrustedtoadvisors,significantinvestmentriskispresent,sales-basedincentivescancreate conflicts
of interest,andfee schedulesoftenlacktransparency”(2012, p. 209). The authorsnote some important
findings,notablythattrustincreasesthe use of financial advice anditisthe mostimportantdeterminant
of seekingfinancialadvice,alongwithcost.Roman (2003) demonstrated thatethical salesbehaviorby
financial professionalsledtogreatersatisfactionwithproductsandmore trustinthe company.
Expandingonthe researchof relationshipmarketing,researchershave foundthattrustledtoa greater
commitmenttoservice organization,andmore loyaltytofinancial servicescompaniesingeneral
(Fullerton,2011; Auh,et al.,2007).
3.4 The Role of Technology
The role of technologyinthe servicesmodel of financial plannershasseenrelativelylittle
coverage inthe academicliterature.Withthe rise of so-calledrobo-advisorssuchas Wealthfrontand
Betterment,technologymayhave agreaterimpactof the financial marketif the future. Thispaperseeks
to addressif people wouldfeelcomfortable allowingcomputersoftware tocompletelymanage their
investment,orif there issome combinationof humanadvice andtechnological processedthatcould
strengthenthe relationship.Financial planneruse varyinglevelsof technologytohelpmanage clients
investmentandtohelpmanage the efficiencyinrunningafinancial planningpractice.This paperseeks
to explore inwhatwaysa plannercoulduse emergingtechnologiestohelpstrengthenand extendthis
relationship.
Technological simulationsandgaminghave longbeensuggestedasa tool to enhance education
inschools. The recentpushfor comprehensive personal financialliteracysuggestsapossiblerole for

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technologytoachieve thisgoal. Hamilton(2012) notesthatsimulationscansupportdecision-making,as
theyare capable of elaboratingoncomplex systemsandprovide amethodof experimentation,allowing
usersto testa range of inputvaluesfordecisionvariablesandobservethe resultsonoutputvalues”(p.
33). She alsonotesthat “manyfinancial conceptsare tooabstract to be easilyunderstoodwithoutthe
use of visual aids”(2012, p. 39), and that simulationscanhave apositive effectbyremovingthe
mathematical burdenawayfromthe consumerand helpingaddressthe inertiabiasin risk-adverse
consumers.The authorcontinues tobreakdownthe simulations intolow,mid,andhigh-fidelity,with
the latterinvolvingcomplex anddramaticstorylinesfocusingon the use of characters. Way and Wong
(2010) alsosuggesta role for gamesinsimulationinenhancingfinancial literacy,pointingtopopular
gamingmodelssuchas Worldof Warcraft andThe Sims,in whichpeople engage invirtualeconomies.
What type of technologywouldhelpenhance aconsumer'sfinancialchoices? How wouldthis
software be designed,presented,andutilized? The fieldof visualanalyticshasresearcheshow people
interactwithtechnology.Savikhindefinesvisual analyticsas“represent[ing] large amountsof
informationvisuallyonthe computerscreenand allowsthe decision-makertointeractwiththe
information,enablinghimorherto gain insight,draw conclusionsandmake improveddecisions”(2011,
p. 7) Savikhin,etal., (2008) showedthatvisual analytics couldimprove the economicdecisionmakingof
participantsundercognitivelimitations. Intermsof anindividual’sparticipationinfinancialmarkets,
“The fundamental questioniswhetherthe individual hasaclearunderstandingof the risklevel of
differentassetsandwhetherhe orshe can choose a portfoliothatisappropriate forhisor herrisk
tolerance”(Savikhin,etal.,n.d.).The authorsshow thatindividualsrelyon subjective,notobjective,
measuresof probabilityandrisk,andthat visual representationsof datacan helptosolve thisproblem.
The authors thencommentonthe explosionof online financialservices,especiallyamongyounger
individuals,thatcouldpotentiallyreduce the needfor financialadvisors. Theyissue awarning
“However,onlinefinancial planningmayresultinanoverloadof information,givingthe
consumerinstantaccessto a myriadof financial instrumentswithdifferentriskandreturnattributes.
The negative effectof informationoverloadoncognitionhasbeenreportedfordecisionsindomains
such as healthcare,accountingandbusiness”(Savikhin,etal.,n.d.,p.1)
In developinga‘financialtime machine’,Scott-Brown,etal., (2010) demonstratedawayto reinforce
propersavingsdecisionsusingagame-likeandinteractiveinterface:

18. 18
“The beautyof the multi-touchinterface andgame formatarise here - the formatallowsusers
to imagine scenariosandplayat‘whatifs’.Ina formal banksalesconsultancyscenario,where the useris
immediatelypinneddowntotheirownfinancial situationthe user canfeel inhibited.A game-based
more format allowsforpeople notcommittothe actual figurestheypossess.Thiscanhelp reduce
embarrassment,particularlyforpeople whomayhave a problem,anexperience suchasthismay be an
easierwayto make the transitiontoacknowledgementof aproblemthanan full on debtcounseling
session”(Scott-Brown,etal.,2010, p.5)
The authors caveatthat such a systemwouldwork ideally withatrainedprofessional toprovide
feedbackandcounselling. Thissuggestsanimportantrole forthe financial advisor,evenastechnology
helpsempowerconsumerstomake more appropriate financial decisions.
Technologyandvisual analyticscanbe usedtoenhance a consumer’sfinancial literacyand
overall understandingof financial markets,butprofessionalswill still have arole inseparatingthe white
noise inthe market.Fernandez-Saboite andRoman (2012) show that,in a retail setting, online value
assessmentswere influencednotonlybythe performance of the online channel,but alsobythe wayin
whichthe two channelsworktogethertooffer the total service experience”(p.43) and suggestthat
companiespractice amulti-channelstrategyusingbothanonline andofflineexperience. Sillence and
Briggs(2007) showthat a large proportionof people use the internetforfinancial advice,andthe layout
and designof the webinterface influences the trusta consumerhaswitha core product. These
examples,takenfromaretail perspective,canbe easilyappliedtothe marketforfinancial advice.There
issome researchto suggesttechnologycanhelpaidconsumersandguide themtoproperfinancial
decisions,butpeople still valuethe advice of aprofessionalandsee technological-basedservice
deliveriesasa complementtoaphysical presence.

19. 19
4. Methodology
4.1 Introduction
Thisresearchprojectwas designedunderapositivisticparadigm, whichseekstofindfactsand
causesfor the relationshipbetweenindividualsandthe perceptionof the financial servicesindustry
(Hussey&Hussey,1997). It wasconductedundera deductive approach,totesthypothesissurrounding
the viewsof an individual inregardstoprofessional financialadvice (Saunders,etal.,2003).This study
will use amixed-methodresearchstrategy,butthe emphasiswillbe onobtainingandanalyzing
quantitative data(Bryman&Bell,2011). Qualitative datawill be usedtosupportdataanalyzed
quantitatively. The datawill be analyzedtocompare the effectsof certaindemographicvariables,such
as gender,age,educationlevel,andincome onthe decisionstouse financial advice andthe value
perceivedfromparticularservicesofferedbyaprofessional financialadvisor.
4.2 Research aims and hypotheses
Thisresearchattemptsto discoverthe consumers’overall perceptionof the financial planning
industry. Inorderto discoverthese details,thisresearchcoversfourinterrelatedaims:what
demographicvariablesare associatedwithcurrentlyusingafinancial plan;the value andeffectof
financial literacy;the valueconsumersplace incertainfinancial planningservices,andthe role of
technologyinsupportingorweakeningthisrelationship.Infollowingthe previousresearchof Elmerick,
Montalto,& Fox (2002), Chang (2005), and Hanna (2011), the firstaimof thisresearchisto dicover
whichdemographicvariableshave aneffectonthe decisiontoseekfinancial advice.Thisleadstothe
firstresearchhypothesis:
H1: Age,Gender,andIncome will have aneffectonthe decisiontoseekfinancial advice.
The secondaim of thisresearchisto discoverthe value individualsplace onincreasedfinancialliteracy,
and whetherthiswill serve asacomplementtoprofessional financialadvice,asdiscoveredby Collins
(2010) and Finke (2012),and leadsto the secondresearchhypothesis:
H2: Financial literacywill serveasa complementtoprofessional financial advice.
The third aimof thisresearchisdiscoverwhatservicesindividualsvalue,orwouldvalue,fromafinancial
advisor. ResearchbyBodnaruk& Simonov (2012), Hackenthal,etal., (2012), and Mullainathan,etal.,
(2012) provedcritical of a financial advisor’sabilitytoprovideexcessreturnstoaninvestor.However,
researchby Garling,etal., (2009) and Bernartzi (2012)suggestthanan advisor’spivotal role istomanage
the behavioral biasesof anindividual investor.Inthisexploratoryresearch,thisthesisseeksto

20. 20
determine if individualsvaluebehavioral associationsoverinvestmentperformance,andleadstothe
thirdand fourthresearchhypotheses:
H3: Individualswill valuebehavioral associationsmore thaninvestmentperformance
H4: Age,Gender,andIncome will have aneffectonthe value of financial planningservices
The fourthaim of thisresearchwill be to explore the evolvingrole of technologyinthe financial
planningindustry. ResearchbySavikhin,etal., (2008), Savikhin(2011) suggeststhatvisual analyticsand
portal designcan improve individual’seconomicandfinancial decisionmaking.Scott-Brown,etal.,
(2010) and Benartzi (2012) showhowinteractive interfacescanalsoimprove decisionmaking.Hamilton
(2012) providesdetailsintohowgame-like simulationscanimprove deliveryof financial educationand
therefore financial decisionmaking.Thisresearchaimstoexpanduponthisresearchandto explore to
whatextenttechnologywill supportorweakenthe financial advisingrelationship,whatclientswould
desire asfeaturesina clientinteractionportal,andwhetherindividualswouldbe willingtoadopta web
basedfinancial managementsystemsuchasWealthfrontorBetterment. Thisleadstothe following
researchhypotheses:
H5: Interactive technologywill increase the consumptionof financial advice
H6: Individualswill valuescenariotestingasa feature inaclientportal
H7: Age,Gender,andIncome will effectanindividual’svalueof clientportal features
H8: Youngerparticipantswill be more likelytoadopta web-basedplatform
H9: Income will have anegative effectonthe decisiontoadoptaweb-basedplatform
4.3 Research design
A surveyof over 6,000 Americansconductedbythe Financial PlanningAssociation (2008)
showedonly60%had a financial planinplace.Furthermore,the studyshowedthatonly34% of
participantswithafinancial plannerhadusedthe advice of aprofessional toestablishthe plan.Iwanted
to discoverwhy,orwhynot, the general populationdecidestouse the servicesof aprofessional
financial planner. Thispapertriestodetermine whatservicesanindividualwouldvalue mostfroma
financial planner.Forexample,dopeopleonlycare aboutportfolio performance,andseekafinancial

21. 21
advisorto outperformaninvestmentallocationtheycouldchoose bythemselves?Dopeople seek the
advice to helpovercome theirfearof investingandaversiontorisk? Dotheyvalue financial education,
or do theyprefertoleave all investmentdecisionstotheirprofessionals? Whatkindsof featureswould
people value onatechnological portal? Finally,the rise of sophisticated softwareplatformssuchas
BettermentandWealthfront,thispaperseekstoaddresstorole of technology inthe financial advisor
relationship. Wouldconsumersbe comfortableallowingsoftware tocompletelymanage theirfinances,
or do theyprefera combinationof technologyandhumaninteraction?
The firstpart of thisresearchwill gatherdemographicinformationandsee if there isany
relationshipbetweengender,age,relationshipstatus,numberof dependents,level of education,
householdincome,orlevel of assetsonthe decisiontouse a financial advisorinthe pastfive years.The
researchwill continue totest if there isanyassociation forthe demographicvariablesandhow and
whenan individual wouldliketocommunicate withafinancial advisor,andinwhatformatwouldthe
participantsprefertoreceive acustomizedfinancialplan. Robb,etal. (2012) foundthat age income had
a significanteffectonthe decisiontoseekfinancial advice.Iwould alsoexpectthatlevel of investable
assetsand level of educationwouldalsohave aneffecton the decisiontouse a financial planner.
Thoughnot studiedbefore,Iwouldexpectthatyoungerconsumerswouldpreferelectronic
communication(e-mail,videoconferencing,andsocial media)tomore traditional channels.Iwouldalso
youngerconsumersto desire tomeetwithafinancial advisormore infrequently.
The fieldof behavioral economics,andbehavioral finance,hasbeengrowingfordecades.Basedonthe
workof scholarssuch as TverskyandKhanemen (1974) and Shiller(2003) many people have questioned
the efficientmarkethypothesis of scholarssuchas Fama (1970). For the financial planningindustryin
particular, muchof the academicliterature hasfocusedonthe quantitativenature of financialadvisor’s
advice.Many have focusedonthe overall performance of a financial advisordirectedportfolio versusan
efficientandlowcostindexedportfolio (Hackenthal,etal.,2012; Chalmers& Reuter,2012; Kramer,
2012). Some articleshave shownthe improvementinan individual’s diversificationwithanadvisor
(Mardsen,etal.,2011; Kramer,2012) However,there issome informationtosuggestthata financial
advisor’smostimportantrole istohelpde-biastheirclientbehavioral misconceptionsand judgmental
hues(Finke,2012). Thispaperseekstoexpanduponthatnotion,andto see if consumersvalue
behavioral viewliketrust,relationships, andeducation more thanquantitativeperformance.
In orderto compare an individual’spropensitytovalue servicessuchastrust,education,risk
mitigationoverservicessuchasinvestmentperformance wouldexpectthat,onLikertscale questions,

22. 22
participantswill give highermeanrankingscorestothe questions Feeling prepared forretirement,
Having adequateinsurancecoverage,and Having a professionalreducemy fearsand anxietiesabout
investing than to questionsjudgingthe valueof investmentperformance.Iwill alsotesttosee if any
demographicvariable have animpactonthe meanvalue rankings.
A growingbodyof literature hasdiscussedthe goalsandeffectivenessof financial literacy
programsin the country.Perhaps,increasedfinancial literacyeducationmaynotbe appropriate public
policy:
“In an idealized first-best world, where all people are far above average,education
would train every consumer to be financially literate and would motivate every consumer
to use that literacy to make good choices. The costs of the education model would be low
enough and the benefits high enough that empowered citizens of the ownership society
could flourish, and more rather than less education would be desirable. Unfortunately,
such an education is not possible, or, if it were possible, the price of such an education
would be so high as to reduce social welfare. In the real, second-best world, less rather
than more financial literacy education may be better.” (Willis, 2008, p. 57)
If the movementcontinuestogrow,whatwill be the effectonthe financial planningindustry? InWillis’
ideal world,eachconsumerwouldbe able tooptimally manage hisorherownfinancescompletely.
However,herresearch concludedthatthe complexityof the financial marketplace requiresprofessional
attention. Intuitively,one wouldbelieve anincrease infinancial educationwouldleadtoadecrease in
the use of professional advice.However,some have concludedthatfinancialknowledge isanimportant
indicatorinseekingfinancial advice (Collins,2012; Finke,2012; Shih& Ke,2014). I wouldexpectthat
individuals wouldindicatethatincrease financial educationwouldleadtoanincrease inthe use of a
financial planner.
The role of trust inthe financial advisor/clientrelationshiphasseenlittle coverageinthe
academicliterature.The finance industry,still reelingfromthe crisisof 2008, has beennamedthe least
trustedindustryinAmerica.Clearly,thiswill have animpactof the personal financial industry,andthe
nature of the clientrelationship. Althoughthe overallview of the financial service industryisnegative,it
remainsanimportantand necessaryforindividuals tosave forand fundretirement.Llewellyn(2005)
showedhowtrustisfinancial transactionisfundamentallydifferentandmore importantthanmost
retail transactions.Othershave demonstratedthatethical service behaviorfromsalespeople will
generate more trustinthe clientrelationship (Auh,etal.,2007; Roman,2003). Overall,there islittle

23. 23
academicresearchonthe role of trust inthe relationshipbetweenaconsumerandan individual advisor.
Thispaperseeksto expanduponthe role of trustin the financial servicesindustry,andtodiscoverthe
degree towhichtrustplaythe largestrole inseekingfinancial advice. Iexpectthatconsumerswill have a
highmeanvalue ranking forquestionspertainingtotrustin theirfinancial professional.
The increasingsophisticationandreducingcostsof financial software meanspowerful
technologyisnowavailableatcompetitivepricestothe average consumer.Thoughself-directedonline
brokerage accountshave longofferedcertaintoolsandeducational materialstodo-it-yourself investors,
the most sophisticatedplatformshave beenreservedforfinancial professionals.The emergence of
companiessuchas BettermentandWealthfrontprovidesthe consumerwithan avenue tothese
technologiesata fractionof the costsof utilizingaprofessionaladvisor. Researchhasshownthatweb-
basedapplicationsplayanimportantrole inservice delivery,butthatconsumersstill value aphysical
presence andtraditional services (Fernandez-Sabiote&Roman,2012). Otherresearchhas shownthat
improvedvisual designcanhelpanindividual make betterfinancial choices (Savikhin,etal.,n.d.;Scott-
Brown,et al.,2010). Trahan, etal., (2012) showedthata marketwouldexistforvirtual financialplanning
basedon the price and reputationof the vendor.The authorsnotedthatthe industrywouldface “major
challengestobroadmarketacceptance”includingcomplexityandavailability (p.115).The authorsalso
pointto interface designasan importantpartof the successof anyproduct.This research,andthe
evolutionof technologyandthe overall acceptance of technological solutions,wouldsuggestthatthe
model of a face-to-face financial plannermaybe comingto an end. Howeverthere isenoughresearchto
suggestthatpeople still valuethe knowledge of afinancial professional,andthattechnology,like
financial literacy,shouldbe seenasa complement,ratherthanasubstitute for,professional financial
advice.
In orderto assessthe role of technologyinthe financial planningprocess,thislastpartof this
researchwill seektogatherconsumerviewsonclientportal design,the impactof increased accessto
technologyonthe decisiontouse afinancial planner, andwhether,andforwhatreasons, individuals
wouldbe willingtouse a web-basedapplicationtomanage investmentportfolios.Iwouldexpectthat
younger,more educatedindividualswouldmore likelytouse aweb-basedfinancial planning
application.Iwouldalsoexpectthatthose withhigherincome andlevelsof investable assetswouldnot
be likelytouse a web-basedfinancial planningapplication.Iwouldalsoexpecttosee anassociationof
age andthe reasonsanindividual wouldchoose touse suchanexplanation.

24. 24
As thispaperintendstocapture highlysubjective anddifficulttoquantifydata,the perceptions
of the financial industry,Ihave chosenamixedmethodapproachof gatheringquantitative and
qualitative data. A self-administeredsurvey,distributedthroughthe websiteSurveyMonkey,was
chosenforboth cost andease of distribution. Asthe surveyswouldbe bothanonymousandtaken
withouta supervisor,itshouldreduce the biastoanswerquestionsinwhatwould be perceivedasa
socially acceptable manner.The sensitivityof the datawouldalsorequire anonymityanddiscretion.I
useda mixture of multiplechoice,ranking,andLikertscale questionstospreadresponsesandgather
the requireddata.
4.4 Survey Method
The surveybeginsbycollectingdemographicdatathat will aidincategorizingandcomparing
responses acrossage,income,andotherdemographicfactors.The firstpage was alsousedto ‘ease’the
respondentsintothe surveybyplacing thesequestionsfirst.The endof the firstpage asksthe question,
“Have yousoughtthe advice of a financial professional inthe lastfive years?”inordertocompare the
responsesof peoplewhocurrentlyuse anddon’tuse financial planningservices. Forrespondentswho
useda financial planner,multiplechoice questions soughttoclassifythe mostvaluedof financial
planningservices,buildingonthe researchof Warschauerand Sciglimpaglia (2012).For respondents
that have yetto establisharelationshipwithafinancial planner,the multiple choicequestionsoughtto
discoverconsumerviewsaboutthe industry,gatheringquestionsonperceivedperformance,trust,and
financial knowledge.
To establishacomparison,participantswere asked,basedona0-6 Likertpointscale,with
promptsrangingfrom‘No Value’to‘ExtremelyValuable’,how theyfoundstatementrelatingto
investmentperformance,trust,behavioral characteristics,andincreasingfinancial literacy.The nest
stage of questionsoughttounderstandwhen andhow anindividual would liketocommunicate witha
financial advisor.Iexpectedthere tobe arelationshipbetweenage,householdincome,andlevel of
investableassetsonthese choices.Youngerparticipantswouldbe more likelytochoose electronic
meansof communicationinfrequently,whereaswealthierindividualswouldprefertomeetmore
regularlyandin-person.The followingquestionsseek todiscoverthe importance of certainfeature if the
participantwere tohave accessto a clientportal,includingabilitytoscenariotestdataandthe abilityto

25. 25
track and categorize spending.Again,Iexpecttofinda statisticallysignificantrelationshipbetweenage,
income,andlevel of assetsandthe preference forusingaclientportal.
To furtherexplore the relationshipbetween technologies andthe financial planningprocess,
individualswere asked if increasedaccesstotechnologywouldmake the more orlesslikelytoconsume
financial advice orif this wouldhave noeffect.Inline withthe researchshowinganincrease infinancial
literacywithanincrease inthe use of professional financialadvice,Iwouldexpecttechnologytoactas
complementtofinancial services.Participantswere thenasked if theywouldbe willingtouse aweb-
basedapplication thatusedcomputer-drivenalgorithms tomanage theirfinances.Iwouldexpect
younger,more educated,andlesswealthyindividualstohave apreference forusingthistype of
technology,anolderwealthierclientstobe more likelytoanswerno.Inadditiontothismultiple choice
response,individualswere askedtoexpandupon theiranswersbyselectingtowhatextenttheyagree
or disagree withstatementsaboutthe benefitsorproblemswithusingsuchaservice.Iexpectthat
individualswhochose toanswernowouldexpressmore confidence andtrustinusinga professional
advisor,alongwitha distrustof computertechnologytoaccuratelymanage theirfinances.Conversely,I
wouldexpecttofindthatpeople whochose yeswouldagree thatcomputerswould doasuperiorjobat
a lowercost.Lastly,participantswere askedtwoopen-endedresponsesaboutwhattype of features
wouldtheylike tohave ona clientportal,andwhat otherserviceswouldtheylike tosee formafinancial
advisor.
4.5 Pre-test
To testthe surveyanemail linktothe self-administeredsurveywassenttoa total of 8 people.
As suggestedbyMonroe andAdams (2012), the pilotparticipantswere chosentorepresentsampleof
the surveypopulation,andaskedif there were anydifficulties due toformatting,language,andlength.
No significantissueswere broughtforth,sonochangeswere made.However,whenattemptingtoenter
thissample dataintoSPSS,I noticedthatsoftware couldnotdecipherananswerbetweenthe marked
promptson the Likertscale (althoughthere were sevenpointsforindividualstocheck,only the
minimum,mean,andmaximumanswerswere labeled) andquestionsthatwere leftblank. Afterthe
change to these questions,the software wasable toexceptthe answerstobe analyzed.

26. 26
4.6 Sample and Location
Invitationstotake thissurveywere distributedthrough aFacebookaccount.A total of 423
people were askedtocompletethe surveywithalinktoSurveyMonkey.A total of 205 persons
completedthe survey,fora completionrate of 48%. The Facebookaccountwas chosenforease of
distributionandnotification.Italsoprovidedagoodcrosssectionof age andgender.

27. 27
5. Analysis and Discussion
5.1 Respondent profiles
Individualswere askedtoprovidecertaindemographicdataforcategorizationandcomparative
purposes.The responsesare summarizedinthe tablesabove.Respondentswere mainlyfemale
(76.5%).The age group 25 to 34 appearedmostfrequently(53.4%) followedby55 to 64 (14.7%) and45
to 54 (11.8%). Overall 96.1%of respondentswereunderthe age of 65 and69.6% of respondents were
underthe age of 45, suggestingayoungerdemographicthannational averages[probablyneedtocite
censushere].The majority of respondentswere married(58.8%).Includingdataoncivil partnerships
and those whocohabitate withasignificantother,74.5% of respondents reportedbeingina
relationshipwithanotherindividual.The mostlikelylevelof educationforrespondents wasaBachelor
degree (45.8%),with73.9% of individual achievingacollege orgraduate degree.Mostindividuals
reportedanannual oncome of $75,000-$124,999, withthe majorityof responsesindicatinghouseholds
of above $75,000 (60%). However,amajority of responsesshowedindividualsinlowerclassesof
investableassets,with<$49,999 the mostchosenresponse at39.4%, with60.1 % of respondents
indicatinginvestable assetsunder$149,999. Respondentswere fairlyevenlysplitonobtainingfinancial
advice inthe last five years,with47.5%indicatingtheyhave receivedsome sortof professional
financial advice and52.5% indication theyhave notusedthe advice of aprofessional.
5.12Consumption of Advice
Maleswere evenlysplitonhavingsoughtout financial advice inthe lastfive years,whilefemaleswere
slightlymore likelytorespondno53.2%.Age seemstohave an effectonthe decisiontoreceive financial
advice.Only23.1% of dependents age 18 to 24 usedsome formof professional financial advice.Only
40% of respondentsinthe in35 to 44 age bracketusedprofessional financial advice,comparedto66.7%
and 63.3% forthose inthe 45 to 54 and 55 to 64 yearold age group.Respondentswere fairlyevenly
splitas yesor noanswersbasedonall levelsof educationalattainment.Bothwealthandinvestable
assetsappearto have an effectonchoosingtoseekfinancial advice,with63.2% of respondents
reportingusingaprofessional advisorforincomesover$125,000. Likewise,66.7% individualswith
investableassetsbetween$500,000-$999,999 soughtprofessional financialadvice. 92.9% of individuals

28. 28
withinvestableassetsover$1,000,000 reportusinga financial advisorinthe lastfive years,andonly
30% of people withassetsunder$49,000 usedsimilaradvice.
Chi Squaredtestsforassociationwere runto helpsee if there wasasignificantrelationship
betweenage,gender,andincome onthe choosing toseekfinancial advice.Of the variablestested,only
income showedastatisticallysignificant relationship.Resultsshowedasignificantrelationshipatthe 1%
level (p-valueof .009).These resultsdonotsupportthe hypothesisthatage andgenderhave aneffect
on the decisiontoseekfinancialadvice,anddonotsupportthe findingsof Elmerick, Montalto,andFox
(2002). However,the resultsdosupportthe hypothesisthatincome hadaneffectonusinga financial
advisor. These resultssupportthe conclusionreachedbyElmerick,Montalto,andFox (2002) ,Chang
(2005) and Hanna (2011). Perhapspeople withlargerincomesfeel there isavalue-addedactivityin
seekingadvice fromaprofessional financial planner,orthe effectcouldcome fromsimplyhavinga
surplusof investableassets.
5.13 Reasons for choosing to see a financial advisor
For the reasonswhypeople chose toseekfinancialadvice,individualswere askedtocheckall
answersthatapply.The most commonresponseswas To help pan and saveforretirement (57.45%)
followedby To havea professionalmanagean investmentportfolio (41.49%) andTo havea professional
providea comprehensivefinancialplan (38.30%).Responses To plan fora trustor estate,To reduce
debts, andTo establish adequateinsurancecoverage all receivedunder20% of marks.

29. 29
5.14 Reason for choosing not to see a financial planner
Table 1: Reasons for not seeking financial advice
For those whochose not to use financial advice.Forindividualswhodidnotchoose touse a
financial planner,28.9%citeda lack of knowledgeorunderstanding,andanother22.5% believingthe
serviceswouldbe tooexpensive.Thissuggeststhe possibility thatincreasedfinancial education[cite
studies…..] shouldleadtoanincrease inthe consumptionof financialservices.The confusionover
expenseslendstoamodel of more transparencyoverfeesandcommissions[cite researchhere].Only
5.6% of respondentsexpressedalackof trust infinancial advisors.Thisresultissurprisingconsidering
general surveysaboutthe viewof the financial industry ingeneral [cite surveysandresearchhere].
Perhapsindividualshave anegative viewof the system, orof large institutions,buthave more trustin
certainindividual’s traits,whichwouldbe interestingtoexplore further.Only19% of respondents
claimedtheycouldoutperformfinancialprofessionalsininvestmentreturns,suggestingpeople
consume financial advice forreasonotherthannetreturns.
Chi-Squared testforassociationcouldnotbe completedonage,numberof dependents,level of
education,income level,andlevel of investable assets.However,resultsshow astatisticallysignificant
relationshipbetweengenderandthe reasonswhyan individual chose tonotseekfinancial advice[insert
p-value here].A cross-tabulationwasusedtoshow the percentage betweengendersforthe reasonsnot
to seekfinancial advice.Specifically,38.9% of maleschose I don’tthinkan advisor can provideany more
growthin my investmentsthan Iwould be able to providefor myself, comparedwithonly23% for
females.Thissupports researchthatmenfeel more over-confidentintheirabilitytoselectinvestments,
and that womenare more likelytouse aprofessional forfinancial advice.
I thought the
services
would be too
expensive
I don't trust
financial
advisors to act
in my best
interests
I am afraid of
losing my
savings in the
market
I don't think an
advisor can
provide any
more growth
in my
investments
than I would
be able to
provide myself
I don't know or
understand
what services
are offered by
a financial
advisor
Other
Male 16.7% 5.6% 5.6% 38.9% 19.4% 13.9% 100.0%
Female 24.5% 5.7% 6.6% 12.3% 32.1% 18.9% 100.0%

30. 30
5.2 Values for Financial Advice
Table 2: Mean Value Ranking
N Mean
Having investments thatoutperform the marketor close benchmarks 121 3.90
Having adequate insurance coverage (life,health, liability,etc.) 136 5.24
Having a written financial plan 117 3.92
Having a greater understanding offinancial prod 115 4.58
Receiving advice to minimize tax expenses 123 4.38
Trusting that my advisor is acting in my bestinterests 124 5.54
Feeling that I am adequatelyprepared for retirement 119 5.58
Establishing a close relationship with advisor 125 3.98
Having a professional reduce fears ofinvesting 120 4.14
Individualswere askedtogive theirresponse tohow valuabletheyfoundcertainstatements,
and to rank fromno value toextremelyvaluable.Responseswereweightedona1-7 Likertscale.Soas
to not overloadanyindividuals,the responses were gathered overtwoquestions.The responseswere
listedabove inone cartas a meansto helpvisualize the data. Feeling adequately prepared for
retirement and Trusting thatmy advisoris acting in my bestinterests receivedhighestmeanranking,
indicatingahighervaluedactivityforrespondents.Respondentsalsolistedhavingadequate insurance
coverage as a valuable goal. Trusting thatmy advisorisacting in bestinterests alsoreceivedthe most
responses listedas ‘ExtremelyValuable’,with104. The lowestmeanvalueswere Having investments
thatoutperformthemarketsorbenchmarks andHaving a written financialplan. (supportingthe
researchhypothesisthatthe populationingeneral wouldfindtrustingtheiradvisorandbehavioral
[methods] more valuable than havingafinancial professionalprovideexcessportfolioreturns).
5.21 Behavioral Values
FeelingPreparedforRetirement
For the value of “feelingpreparedforretirement”, aone-wayanalysisof variance waschosento
testif there were anysignificantdifference inthe meanvalue rankingsacrossthe subsetsof the
groupingvariables. Resultsshowednostatisticallysignificantdifference inthe meanresponseacross
age,gender,numberof dependentchildren,orassets. There wasastatisticallysignificantdifference

31. 31
betweenthe meanscore valuesacrossrelationshipstatus (p-value of .000),educationlevel (.019),and
income (p-value006).The lackof difference wasfurtherexploredbyusingtwopopulationindependent
meantestfor income,age,andlevel of assets inordertofurtherconfirmor denyresearchby[find
researchto enterhere].,Inordertofurtherexplore the relationshipbetweenage andretirementvalues,
the sample groupsof 25 to 34 and55 to64 were chosenforan independentsample t-test.The age
groupswere chosenforlarge sample size andas wide difference inage. There wasa statistically
significantdifferenceinthe meanweighting forthese age groups (p-value of .001). Income level was
furtherexploredbycomparingmeansof twogroups. Thiswasconfirmedusingthe independentt-test
for groups$25,000-$49,999 and $125,000-$249,999 showinghigherincome levelstohave highermean
scores.The t-teston twoage groupwouldsuggestthatage hasan impact onthe importance of feeling
preparedforretirement,whilethere isnotenoughevidence tosupportthisnotionacrossall age groups,
perhapsbecause of the close (10 years groupingof the age variable.Surprisingly,incomewasshownto
have an effectonthe value of feelingprepared,whereasthe level of investable assetswasshownto
have no effect.Perhapsthose withlarge amountof assetshave noneed floorafinancial advisortomake
themfeel anymore prepared,whereasatlowerlevelsof assets,afinancial plannercanhelp individuals
feel more secure throughavarietyof methods.
Having a professional reduce my fears and anxieties about investing
For the question, please describe how important the following statements are to you, with
respect to having a financial professional alleviate my fears and anxieties about investing, there
was found to be no statistically significant difference of mean value between the groups of age,
gender, relationship status, number of dependents, level of education, income or investable
assets. These results were further explored by using an independent t-test to test two
representative proportions for age and investable assets. The independent t-test results confirmed
there were no difference in the mean value response for the age group 25 to 34 and 55 to 64; also
there was no statistically significant difference in the mean value response for income levels
$50,000-$149,999 and $500,000-$999,999. These results indicate that individuals across all
groups place the same value on helping to overcome risk aversion. Additionally, the results could

32. 32
indicate that the ability to tolerate risk has no correlation with any of the grouping demographics
used in this survey and could be an area for further research.
Having adequate insurance coverage
Overall,respondentslistedhavingadequate insurance coverage,the majority of respondents
rankedthe statementas‘extremelyvaluable’ (59.6%) and83.1% respondentsrankedthe categoryasat
least‘greatlyvaluable’.Afterrunningaone wayanalysisof variance byeachgroupingcategory, there
was foundtobe nosignificantdifference inthe meanvalue rankingforthe groupingfactorsof gender,
age,numberof dependents,level of education,incomelevel,oramountof assets.Thiswasconfirmed
for age by runninga two sample meantestusingrepresentativepopulationof 25 to 34 and 55 to 64; for
income byusinga two sample meantestusingthe groupingsof $25,000-$49,000 and $125,000-
$249,999, andfor assetsby usinga twosample meantestandthe grouping$50,000-$149,999 and
$500,000-$999,999. There wasa statisticallysignificantdifference inthe meanvalue rankingfor
relationship status.
5.22 Financial Literacy
Having a greater understandingoffinancial products and services
In orderto assessthe level of value individualsplace onimprovingtheirpersonal financial
literacy, were respondentswere askedhow valuablehavingagreaterunderstanding of financial
productsand services wastothem.Responseswere rankedona sevenpointLikertscale withresponses
from‘No Value’to‘ExtremelyValuable’. Overall, individuals placedameanvalue of 4.58. A One way
analysisof variance test waschosento see if anysubsetof the groupingvariablesrecordeddifferences
inthe meanranking. Resultsshowednostatisticallysignificantdifference inthe meanvalue response

33. 33
across any of the sample groups.Thiscontradictsthe researchhypothesisthathigherlevelsof income
and educational attainmentwouldhave apositive effectonvaluingincreasedfinancial literacy.
However,the highmeanrankingacrossall groupslendssupporttothe notionthat consumers,asa
whole,wouldvaluefinancial educationascomplement toprofessionalfinancial advice.
Education offeredthrough a clientportal
In orderto assessthe effectof increasedaccesstofinancial literacyonthe decisiontouse a
financial planner,individuals were giventhe followingprompt:
“Some clientportalsoffereducational materialsaboutfinancial productsandservicestargetedtoyour
specificsituation.Some of these portalsare offeredthoughthe servicesof anadvisor,whilesome are
offered throughself-directedaccountsthatallow youcomplete control overhow tomanage your
finances.Giventhesetwooptions,checkwhichof the followingstatementsbestdescribesyou.”
The multiple-choice responses soughttoascertainhow willinganindividual wouldbe tocontinue touse
an advisor’s services if theyhadmore accesstoeducation.The majorityof respondents(54.5%) chose
the response Iwould accesseducationalmaterials frequently,in order to become a more informed
consumer;however,Iwould still prefer to hear an advisor’srecommendations. 87.3% of respondents
indicatedusinginteractive educational materials,butstillretainthe servicesof anadvisor.Only5.2%of
respondentsindicatedthattheywouldchoosetotake control overtheirfinanceswithincreasedaccess
to education. These resultssupportthe researchhypothesisthatincreasedaccesstofinancial education
wouldincrease anindividual’s consumptionof financial advice.
Effectof IncreasedAccess to Education
Followingthe previousquestionof how anindividualwouldprefertoaccesseducational
materials,participantswere askeddirectlyif increasedaccesstoeducationwouldmake them more or
lesslikelytouse the servicesof aprofessional financialadvisor,orif increasedfinancialliteracywould
have no effectonthe use of an advisor.51.1% of individualschose No Effectwhile48.9% of individuals
respondedthatincreasedaccesstoeducationwouldmake themmore likelytoconsultafinancial
advisor.Noparticipantrespondedthatincreasedaccesstoeducationwouldmake themlesslikelyto
consulta financial advisor.Theseresultsgivestrongsupporttothe researchhypothesisthatfinancial
educationwill increase consumptionof financial advice.Since alarge majorityof indivdualsclaimed
educationwouldhave noeffectontheirdecisiontouse afinancial advisor,one couldalsoincludethat

34. 34
time constraintsorotherfactors wouldmake people unwillingtoincrease theirownfinancial literacy,
and therefore prefertouse anadvisor.
5.23 The Value of Trust
Trusting that my advisor is acting in my bestinterest
For the whole sample,the meanvalue rankingof trustingone’sfinancial advisortoact inthe
bestinterestof the clientwasthe highestof all meanrankingsat5.54. 83.9% of respondentsrankedthis
statementasextremelyvaluable,the highestof all value-rankedstatements. Theseresultswould
indicate supportforthe researchhypothesisthatconsumerswill value trust overinvestment
performance. One wayanalysisof variance testwere rantotestif there were anystatisticallydifferent
meanrankings forany of the groupingfactors. Resultsshowedno statistically significantdifference in
the meanrankingfor the variablesof gender,age,relationshipstatus,educationlevel ornumberof
assets. Results have shown astatisticallysignificantdifference inthe meanvalue rankingacrossincome
levelsatthe 1% level (p-value of .009).
In orderto explore the researchhypothesisthathigherlevelsof educationalattainmentwould
leadto lowerlevelsof trust,the sample populationof those havingahigh school degree orequivalent
and those havingaBachelorsand Doctorate degreeswere chosentotestif there wasanydifference in
the meanvalue rankingsacrossthese groups.These particularsample werechosenasa good
representationof higherandlower educational attainmentandbecause of large sample sizes. There
was a statisticallysignificantrelationshipbetweenhavingahigh-schooldegreeorequivalentanda
Bachelor’s degree atthe 1% level (p-valueof .008), and betweenahighschool degree orequivalentand
a doctoral degree at the 10% level (p-value of .056).The resultsindicate higherlevelsof trustin an
advisorwithhigherlevel of educational attainment,rejectingthe researchhypothesis.

35. 35
5.24 Value of Performance
Having investmentsthat outperformthe market
The sample populationgave the statementHaving investmentsthatoutperformthe market, a
meanvalue rankingof 3.90. 36.4% of respondents chose ‘Valuable’,the mostselectedresponse. This
response hadthe lowestmeanrankingamongstthe value questionsforthe sample population.This
supportsthe researchhypothesisthatindividualswillvalue otherservicesof afinancial professional
overinvestmentperformance.Anindependentsamplest-testwaschosentotestthe research
hypothesisthatwill have aneffectonvaluinginvestmentperformance.Resultsshow nostatistically
significantmeanvalue rankingforeithergender,rejectingthe hypothesisthatmaleswouldbe more
likelytovalue investmentperformance.Inordertotest the researchhypothesisthatindividualswith
higherlevelsof income andinvestableassetswouldvalue investmentperformance more thanthose
withlowerlevelsof income andinvestableassets,aone-wayanalysis of variance waschosentotestfor
significance.Resultsshowednostatisticallysignificantdifference inthe meanvalurankingsacrossanyof
the subgroupsforincome andinvestable assetlevels.These resultswouldrejectthe hypothesisthat
income or assetshave aneffectonthe value of investmentperformance.Althoughwealthhasbeen
shownto have a positive effectonseekingfinancial advice,perhapsitisonlythe presenceof surplus
assets,andnot the desire forexcessreturns,thatdriveswealthierhouseholdstoseekinvestment
advice.

36. 36
5.3 The Role of Technology in the Financial Planning Relationship
5.31 Important Features of a Client Portal
Table 3: Importance of Client Portal Features
N Mean
Linking all financial accounts on one portal 93 5.49
Tracking and categorizing spending 97 5.21
Providing a comparison ofportfolio returns to benchmarks 97 4.79
Ability to scenario test with real data 94 5.31
Detailed cash flow statements 94 5.16
Graphical representation ofall accounts 99 4.88
Participants were asked the following, “If you were given access to a client portal…how
important would the following features be to you.” Responses were weighted on a seven point Likert
scale from ‘Not at all Important’ to ‘Extremely Important’. Overall, the highest mean importance ranking
was the ability to link all financial account on to one portal (5.49). The sample population chose the
ability to scenario test with realdata as more important than the ability to compare portfolio returns,
suggesting support for the research hypothesis that individuals would value a more interactive experience
with a financial planner over pure investment return. As having graphical representations of all accounts
received the second lowest mean importance ranking, it would reject the hypothesis that individuals
would place a high value on aesthetic design. However,surprisingly, participants ranked both liking all
accounts together and tracking and categorizing spending relatively high. This would suggest that
consumers value organization and utility over design, against the research of [cite research].
Linking all Financial Accounts in One Portal
In order to test the research hypothesis that older clients would prefer this particular
feature, a one-way analysis of variance was used to see if there was any statistically significant
difference in the mean ranking of importance across any age group. The results showed no
statistically significant difference on the mean ranking of importance for the grouping variable of
age. In order to expand upon this data, two representative sub groups were chosen for an

37. 37
independent sample t-test. The age groups 25 to 34 and 55 to 64 were chosen because of large sample
size and as a good measure of ‘younger’ and ‘older’ participants. The results showed no statistically
significant difference in the mean rankings of importance across these two age groups. Both results have
to help reject the hypothesis that older clients would prefer this particular feature.
Tracking and categorizingspending
Overall,the sample population responded withameanvalue rankingof 5.21, whichwouldbe
classifiedasslightlyabove the response titled‘SlightlyImportant’. One analysisof variance didnotshow
any statisticallyrelationshipbetweenthe meanvalue rankingsof anyof the groupingvariables. 2sample
populationtestshowedadidnot showa statisticallysignificantdifference inthe meanimportance
rankingbetweenthe age groupsof 25 to 34 and from55 to 64. Independentsamplet-testdidshow,
however,asignificantdifference inthe meanimportance rankingbetweenthe incomelevel groupings
of $25,000-$49,999 and $125,000-$149,999 and betweenthe assetlevelsof $50,000-$149,999 and
>$1,000,000. These results anda visual comparisonof the meanimportance ranking
suggest that, at higher levels of income and assets,an individual place more importance on being able to
track and categorize spending. However,there was also found to be no significant relationship between
the groups of investable assets of $50,000-$149,999 and $500,000-$999,999. Overall, the results are
inconclusive to suggest a relationship between any of the grouping variables and placing importance on
the value of being able to track and categorize spending
Providing a Comparison ofPortfolio Returns to Benchmarks
The sample population gave a mean ranking of importance of 4.79, the lowest of all statements
concerning the feature of a client portal. The most chosen response (38.1%) was ‘Neutral’, and the lowest
percentage of participants (23.2%) chose ‘Extremely Important’ for this portal feature. As consumers
gave a relatively low importance ranking, it would add support to the hypothesis that consumers value
many factors other than pure investment performance. As it showed with questions pertaining to the value
provided by a financial advisor, consumers want a ore holistic experience extending to the technology
involved in the financial advisor relationship A one-way analysis of variance test was used to determine if
there was any difference in the mean rankings of importance across the subgroups of income and assets.
There was no statistically significant difference in the mean rankings for the subsets of both household
income and investable assets. This helps to reject the hypothesis that individuals with higher incomes and

38. 38
levels of investable assets would prefer comparing portfolio performance to the overall market on a client
portal.
Scenario Testing
The sample population scored a mean weighting of 5.31 for the importance of being able to
scenario test with actual data. The mean ranking, and the percentage of individuals (37.2%) rating this
feature as ‘Extremely Important’ was second only to feature of inking all accounts in the same portal.
Overall, this would neither confirm nor deny the hypothesis that individuals would find extreme value in
the ability to use powerful scenario testing technology in their relationships with advisors. A one way
analysis of variance was chosen to determine if there were differences in the mean value rankings
between the subgroups of gender and age. Results showed no statistically significant difference in the ,ean
ranking of importance between males or females or across any age groups. These results would help
reject the hypothesis that males would prefer a more interactive role in technology. In order to further
explore the effects of age on this feature,the age groups 18 to 24 and 55 to 64 were chosen as a
representative ‘younger’ and ‘older’ population. An independent sample t-test was used to determine if
there was a statistically significant difference in the mean rankings of importance between these two age
groups. At a p-value of .759, there was no statistically significant in the mean rankings of importance
across these two age groups. These results were surprising, helping to reject the hypothesis that younger
individuals would prefer a more active and interactive role with technology.
Graphical Representations ofAll Accounts
The sample population gave a mean ranking of importance of 4.88, with the most participants
(34.3%) ranking this feature as ‘Somewhat Important’ and only 23.2% of respondents choosing
‘Extremely Important’. This does not either confirm or deny the hypothesis that individuals would value
design over numeric importance. To test the hypothesis that older consumers would value this particular
design feature,a one-way analysis of variance was used to determine if there was any difference in the
mean value ranking across the different age groups. At a p-value of .358, there was no statistically
significant difference in the mean rankings of importance across all of the age groups. To further test this
hypothesis, the sample age groups of 18 to 24 and 55 to 64 were chosen as a representative ‘younger’ and
‘older population. An independent sample t-test, at a p-value of .793, indicated no statistically significant
difference in the mean rankings of importance across these two age groups. This help to reject the
hypothesis that older consumers would value a more visual interface in client portal.

39. 39
5.32 EffectofTechnologyontheConsumptionofFinancial Advice
Table 4: Effect of Technology on Using a Financial Planner
Frequency Valid Percent
I would be MORE likely to consulta
financial advisor
45 33.8
I would be LESS likely to consulta
financial advisor
21 15.8
Access to more powerful technology
would have NO EFFECT on my decision
to consulta financial advisor
67 50.4
In order to understand the effect of technology on the decision to use a financial advisor,
participants were asked to choose one of three multiple choice responses would most likely describe
them. The questions asked if increased access technology would have more, less, or no effect on the
decision to use financial planner. Only 15.8% of participants responded that they would be less likely to
use a financial planner with increase access to more technology, whereas 33.8% of people thought access
to technology would make the more likely to use a financial planner. The most common response was that
technology would have no effect on the decisions to use a financial planner. As 89.2% of respondents
indicated that technology would either have a positive or no effect on the subsequent decision to use the
services of a financial planner, this data supports the hypothesis that technology can be used as a
complement to professional financial advice.
In order to support the research hypothesis that males would be less likely to use a financial
advisor if given technology, and that, at higher levels of income and investable assets,individuals would
still be more likely to use the services of a financial professional. Of the variables of age, gender, income,
and investable assets that were tested,only gender showed a statistically significance. At a p-value of
.065, there was a statistically significant relationship at the 10% level for the gender. 27% of males
responded that increase access to technology would lead to a decrease in the need for financial advice,
compared with on 12% for females. This again gives support to the notion that men are more likely to be
overconfident and more likely to manage investments themselves. The lack of relationship between age
and the effect of technology helps to does not support the hypothesis that younger individuals would be
more likely manage investments on their own if given access to technology. Results also help to disprove

40. 40
the hypothesis that at higher levels of income, individuals would prefer the services of a financial
professional.
5.33 Theuseof web-basedfinancial planningsoftware
In orderto more specificallydiscoverindividuals’propensitytouse a new webbasedfinancially
planningsystemsuchasBettermentor Wealthfront, the participantwere giventhe followingprompt:
“There are manynewweb­basedapplicationsthatuse computersoftware tomanage aclient's
investmentportfolio.The softwareletsyouinputyourpersonal dataandwill automate manyof the
actionscompletedbyafinancial advisorincludingselectinginvestments.The applicationsuse algorithms
and formulastoconstruct efficientportfolios.The applicationsgenerallyuse low costindexfundsand
therefore charge lessinfeesthantraditional financial advisors”
The participants were fairlyevenlysplitonwhethertheywouldconsiderusingsuchservices,
with46.7% choosingyesand53.3% choosingno. A Chi squaredtestforassociationwaschosentosee if
there wassignificantrelationshipbetweenanyof the groupingvariablesandthe responses. Of the
variablesage,gender,andincome,noneprovedsignificant. Theseresultswouldnotsupportthe
hypothesisthatyoungerindividualswouldbe more willingtouse awebbasedapplicationtomanage
theirfinances.The resultsalsodisprove the theorythatindividualswithhigherincomeswouldbe less
likelytouse suchan applicationandthereforepreferthe use of a financial planner.
Table 5: Mean Ranking for No Answers
Mean
I do nottrust software tomake accurate predictions andrecommendations 4.58
I feel more confidentusingaprofessional financialadvisor 5.63
I feel myfinancial situationistoocomplicatedforfinancial software 3.94
I do notbelieve the software will provide agoodbenefitforthe money 4.18
A professional financial advisorwillprovideabetterservice 5.30
I wouldnottrust sensitivefinancial datatothe software 5.23
Overall,the participantwhoanswered‘no’tousingaweb-basedfinancial applicationmoststrongly
agreedwiththe statement;“Iwouldfeel more confidentusingaprofessional financialadvisor”.The

41. 41
responsesalsoindicatedparticipantsfelt financialadvisorswouldprovide abetteroverall service,but
didnot stronglyagree thatthe webbasedsoftware wouldbe inaccurate orunable torespondtoa
complicatedfinancial situation.There were nostatisticallysignificantdifferencesinthe responsesacross
gender,age,income,andlevelof assets.Again,thishelpstorejectthe hypothesisthatyounger,less
wealthyindividualswouldprefertouse sucha service.
Table 6: Mean Ranking for No Answers
Mean
I feel the software will make accurate predictionsandrecommendations 4.60
I feel the software will provide agoodbenefitforthe cost 4.77
I trust the software will be free frombiasesandconflictsof interest 4.55
I feel the software will provide abetteroverall service thanaprofessional
financial advisor
3.49
I wouldlike the convenience of aweb- basedapplication 4.95
For the participantsthatindicatedtheywouldbe likelytouse a webbased platformforfinancial
services,cost(4.77) andconvenience (4.95) were the objectivesrespondentshadthe highestoverall
level of agreement. The sample populationwasleastlikelytoagree thatthe web-basedservice would
provide abetteroverall service.Again,therewasnostatisticallysignificantdifference inthe mean
rankingforany of the questionsacrossgender,age,income,andlevelof investable assets.Both‘yes’
and ‘no’respondentsseemedtoagree thata professional financialadvisorwouldprovideabetter
overall service.However,costandconvenienceseemedtobe adeterminingfactorinthe willingnessto
try a webbasedapplication.Thisprovidesacontextforfinancial plannerstocompete againstthese new
web-basedfinancialplanning platforms,bymakingtheirservicesmore convenientandmore cost
effectivewhile alsohighlightingthe strengthsof theirtotal approachtofinancial planning.

42. 42
6. Conclusion and Further Research
The sample populationwasfairlyevensplitbetweenthosewhohave usedafinancial advisorin
the last five years(47.5%) andthose whohave not usedadvice(52.5%).Income andwealthwere the
onlydemographicvariablestohave anassociationwithseeking financial advice.Thissupportsprevious
studiesthatsuggestwealthierindividualstendtobe more likelytouse afinancial professional.Though,
thisstudydoesnot testforcausation,itis possible thatsurplusassetsdrivewealthierindividualstose ek
investmentadvice,orthatpeople inthisincome bracketperceive more value fromthe service pf a
financial advisor.There wasalsoasignificantrelationshipbetweengenderandoutperforminganadvisor
inregards to investmentperformance.
Feelingadequatelypreparedforretirementandtrustinganadvisorisactingin theirbest
interestwere the highestvalued responses amongparticipants.Having investmentsthatoutperformthe
marketsand havinga professional reduce fearaboutinvestingwere the lowestvalued responses.This
data helpssupportthe notionthatconsumersvalue trust,relationship,andgeneral feelingsof
preparationoverquantifiableperformance.The low meanrankinggiventoreducingfearsof investing
mightsuggestthatindividuals donotfullyunderstandtheirownriskperception.Thisisanarea where
advisorscouldbenefitfromincreasedcollaborationwithhisorherclients.Individualsalsogave alow
meanvalue rankingtohavinga greater understandingof financialproductsandservices,suggestingthat
an increase infinancial literacy throughan advisorisnota primarygoal of individuals.
Age,income,relationshipstatus,andlevel of educationhadastatisticallysignificantrelationship
withthe feelingof preparednessforretirement,while none of the groupingvariable hadanimpacton
the meanvalue rankingof increasedunderstandingof financial productsandservices.Trustina financial
advisorwasbasedon income andeducationlevel,withbothhigherlevel of educational attainmentand
higherlevelsof income reportingagreatervalue intrustingone’sadvisor.The meanrankingof the
value of investmentperformance didnotvarysignificantlyacrossanypf the groupingvariables.This
resultwassurprising,Iassumed those athigherincome andassetlevelswoulddesire greater
investmentperformance.However,itispossible,thathigherlevel of incomesvalue riskmanagement
overperformance.
An increase inaccessto more powerful technologyhadeithernoeffect,or wouldincreasethe
likelihoodthatanindividual woulduse afinancial planner.Thisgivessupporttothe notionthat
technologycanbe viewedasa complementto,andnot a substitute for,professional financial advice.
The defectof technologywasevenly distributedamongall groupingvariableswiththe exceptionof

43. 43
males,whichshowedahigherpercentage selectingthatan increase inaccessto technologywouldlead
to a decrease inthe use of financial advice.Participantswere fairlyevenlydistributed betweenchoosing
yes(46.7%) or no (53.3%0 on the acceptance of a web-basedfinancial managementsystem.
Interestingly,therewasnoeffectof age,gender,income,orassetlevels.Ihadassumedyounger
individualswouldbe more likelytochoose yes,and thatolderandwealthierclientwouldbe more likely
to choose no.Thisprovidesauseful insightthatperhaps eachindividual’spreference andacceptance of
technologydoesnotfitexactlywithorpre-determined notionsbasedon demographics.Forthe
respondentswhochose no,the statement receivingthe highestmeanrankingof agreementlevel was
feelingmore confidentdealingwithapersonal advisor,suggesting,again,thattechnologyshouldbe
viewedasa complementto,andnot a replacementfor,the servicesof afinancial professional.
These conclusionsare limitedgiventhe small sample size andpotential biasgivenpersonal
relationshipswithmanyof the participants.Also,despite tryingtoassessindividual’spropensityfor
technological use inthe financial servicesindustry,the questionswere difficulttophrase ina survey
format.It ispossible thatmanyrespondentsdidnotfullyunderstandthe questions.The datadoesgive a
goodstartingpointfor future researchintothe role of technologyinthisrelationship.A larger,unbiased
sample couldprovide intriguingresultsonthe role of age,gender,andincome onthe decisionstouse
software applications.A case studycouldbe the bestway to determineconsumer’stechnological
preferences.Actual simulationsof bothexistingweb-basedapplicationsandfinancialadvisorportals
couldaddressconsumer’sattitudestowardeach.Experimentsintointerface designandusabilitycould
capture individual’spreference forcertainfeatures.Atthe present, itappearsthata majorityof
consumersviewtechnologyasacomplementtomeetingdirectlywithafinancial advisor.Astechnology
becomesstrongerandmore widelyavailable,theseresultscouldpossiblychange dramatically.

44. 44
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