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

2. Anne Sunikka and Liisa Peura-Kapanen IAREP 5 Sept. 20082 Overview of the presentation 1.Interview / Focus Group Themes and Research Questions 1.Methodology 2.Pertinent Concepts 3.Model of Investment Behavior 4.Discussion and Conclusion

3. Anne Sunikka and Liisa Peura-Kapanen IAREP 5 Sept. 20083 Interview / Focus Group Themes and Research Questions Interview / Focus Group Themes –consumers’ perception of wealth –reasons for accumulating wealth and –perceived risks related to wealth management Research Questions –What are the most common triggers for investment behavior? –What elements influence investment behavior? –In addition, comparison of the opinions and perceptions of two groups of informants

4. Anne Sunikka and Liisa Peura-Kapanen IAREP 5 Sept. 20084 Background information of the informants Focus groups Expert interviews Number of participants 3311 Number of female173 Avg. age of participants 50 (range 27 - 78) 41 (range 30 - 46) Avg. yrs of financial work experience -17

5. Anne Sunikka and Liisa Peura-Kapanen IAREP 5 Sept. 20085 Pertinent Concepts Involvement: ”The extent of interest and concern that a consumer brings to bear on a purchase decision task” (Mittal 1989). –Assumption: savings and investment products are highly and enduringly involving. Information Search: ”The motivated activation of knowledge stored in memory or acquistion of information from the environment” (Engel et al. 1991). –Assumption: consumers are rational decision makers and capable of understanding the information they acquire. Trust: ”Individual's willingness to accept vulnerability on the grounds of positive expectations about the intentions or behaviour of another in a situation characterized by interdependence and risk” (Ennew and Sekhon 2007). –Assumption: trust is essential for a relationship that is characterized by a high degree of uncertainty.

6. Anne Sunikka and Liisa Peura-Kapanen IAREP 5 Sept. 20086 Investment Triggers Similar triggers mentioned Importance of triggers differed –Previous personal experience – Friends, world-of-mouth –Family – not mentioned by low involvement consumers –Media – influential especially in portraying negative news –Internet – mentioned and found useful by high involvement consumers, distrusted by financial experts –Financial institutions and advisors – perceived as the most influential by financial experts and low involvement consumers.

7. Anne Sunikka and Liisa Peura-Kapanen IAREP 5 Sept. 20087 Involvement Trust 2. Civil duty saver Low involvement High trust 1. Disinterested by- stander Low involvement Low trust 4. Convenience- driven investor High involvement High trust 3. Cost-aware investor High involvement Low trust Investment triggers

8. Anne Sunikka and Liisa Peura-Kapanen IAREP 5 Sept. 20088 Involvement Trust - Financial advisors, WOM - Recommendations - Convenience - Simple istruments - No funds - Human capital - Ethical values - No action - Several information sources - Own FA appreciated - Partial distrust - Convenience - Complex instruments - Internet, several information sources - Independent decision- making - Fees, ROI - Complex instruments Investment triggers

9. Anne Sunikka and Liisa Peura-Kapanen IAREP 5 Sept. 20089 Discussion and Conclusion Theoretical implications –Involvement: Investing is not necessarily highly and enduringly involving activity –Information search: Emotions play an important role in decision making & consumers do not understand all the information they access –Trust: Service providers and consumers emphasize different facets of trust, trust in engineering issues is not an issue Mangerial implications –Importance of ”knowing your customer” –Marketing should be adapted to different groups –Elucidation of investment data is important –Trasparency of information increases trustworthiness –Internal human resource policies