Characterising and Segmenting Financial Advisors based on influences on investors during their information search Characterising and Segmenting Financial Advisors based on influences on investors during their information search

Abstract

The purpose of this paper is to segment financial advisors based on the characteristics portrayed by them during the information search phase of investors. It attempts to understand various segments of advisors based on their influence on investors to make use of the information provided to them. A structured questionnaire was administered to investors with 11 items and 432 responses were collected. Factor analysis was conducted to find out the components and based on that, Cluster analysis was done to identify the segments. Statistical techniques like regression analysis was done to find out, for which reason the investors would prefer to consult others.

Four factors were identified based on the preferences of the investors and subsequently four clusters of financial advisors have been identified. Regarding the preference to consult others, the main reason is to take better decisions.The individual investors can approach the suitable advisor based on the segmentation and take suitable advice. The advisors can understand where they fit in and appropriately tailor their services

In the best of the researcher’s knowledge, perhaps this is the first study to segment financial advisors based on influences on investors.