Broker-client contact and client satisfaction: Are client attitudes towards brokers bullish and bearish with the stock m
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Marcelline Fusilier is Professor of Applied Management at Northwestern State University of Louisiana. Her research interests include employee health, business ethics, customer relationship management and work life issues in India.
Mark Schaub is Assistant Professor of Finance at Northwestern State University of Louisiana. His previous research has been in the areas of consumer finance, international investments and stock market efficiency.
Abstract The rapidly changing financial services industry requires an intimate understanding of broker clients in order for brokerage firms to increase and maintain a client base. This study uses a questionnaire in order to determine what clients felt were brokers’ strengths and weaknesses in attaining client satisfaction. The results of the survey indicate that clients’ perceptions of brokers’ honesty, aptitude, knowledge and service to its customers are main determinants of client satisfaction. The overall responses during the bull market and the bear market show little change in client attitudes towards brokers. Keywords Broker-client contact, broker-client relationships, client satisfaction, broker performance, broker services, client retention
INTRODUCTION
Marcelline Fusilier 201 Russell Hall, Northwestern State University, Natchitoches, Louisiana 71497, USA. Tel: +1 318 357 5264; Fax: +1 318 357 5990; e-mail: [email protected]
These are volatile times in the US financial services industry. Banks, once championed as the primary haven for individual investor savings lost their lustre as mutual funds, which provided better returns and a higher degree of diversification for small investors, gave brokers a competitive edge. Brokerage firms gained from the growing importance for individuals to invest long term for retirement as stock markets reached record highs and the scepticism surrounding Social Security survival during the baby-boomer retirement years increased. Now, recent legislation in the USA threatens to increase the competition faced by brokerage firms by allowing
# Henry Stewart Publications 1479–1846 (2003)
Vol. 8, 1 63–70
non-brokerage firms to provide some of the same services. In light of all these rapid changes in the financial services industry, brokers need unbiased anonymous client feedback to identify factors affecting client satisfaction in order to retain and increase their client base. This study seeks to determine such factors based on data collected using a questionnaire. Also, client responses before and after the stock market decline are compared to examine volatility of client satisfaction. BACKGROUND The Glass Steagall Act of 1933, passed to combat abuses leading up to the Great Depression, limited the ability of an
Journal of Financial Services Marketing
63
Fusilier and Schaub
individual firm to meet a client’s complete need for financial services. Holding companies tried to supercede the limitations imposed by acquiring a conglomerate of financial service firms meeting different financial service needs (eg Sears owned Discover Card Services, Dean Witte
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