ASPECTOS PSICO-SOCIALES

By comparing those participants who foresee a life event in the near future with those who do not it can then be determined whether they are more (or less) inclined to seek advice from a financial planner. This provides further substance to the research question of whether life events have an influence on decision making for financial services.

RQ2: Do life events influence consumer behaviour for financial services amongst mature consumers?

A series of Mann-Whitney U tests were undertaken to compare the differences in the participants’ likelihood to seek advice from a financial planner if they were a) likely to experience an event or b) unlikely to experience an event.

Table 4-5: Categorisation of life event questionnaire items in line with bimodal distribution Group Category Description

1 Highly unlikely those that scored 1-2 (highly unlikely) on the seven point scale 2 Medium those that scored 3-5 on the seven point scale

3 Highly likely those that scored 6-7 (highly likely) on the seven point scale

Categorisation of the data into three simpler groups is consistent with the nature of the distribution. As can be seen in the examples of retirement, Figure 4-1 and Figure 4-2, there are participants that ‘do’ consider an event likely and participants who ‘do not’

consider an event likely. There are few participants in between. The research from this point on is only concerned with the differences between those who ‘do’ and those who

‘do not’ consider an event likely. The ‘differences’ provide the comparison required to determine whether life events influence consumer behaviour.

Mann-Whitney U tests use a ranked order methodology to ascertain the differences between groups. They were used in this study because the data failed the underlying

assumption of normality required for comparable parametric methods. The results of this analysis are presented in Table 4-6 (p. 131).

Table 4-6 (p. 131) demonstrates that mature consumers who foresee a life event occurring to them within five years are more likely to seek advice from a financial planner. This indicates that an impending life event raises the ‘need’ for financial advice in an individual’s mind. The life events presented in Table 4-6 (p. 131) all report statistically significant differences between groups after examination with the Mann Whitney U test. The magnitude of effect varies with different life events. Some events have a greater synergy with the product than others. The direction is unanimously a greater inclination to seek advice.

The theory that life events have an influence on consumer decision-making for financial services can be supported from the results presented in Table 4-6 (p. 131). Foresight of a life event has the ability to change a consumer’s minds and evoke needs that were not previously recognised. Using the retirement focus of the research as an example this can be explained. Table 4-4 (p. 128) shows that retirement is an event which is highly likely to have mature consumers seek financial advice. The life event of retirement has a mode of 7 (highly likely to seek financial advice if retiring) and a median value of 6. This implies that at least half of the participants consider it likely they would seek advice from a financial planner if they were retiring (as per Table 4-1, p. 121). Table 4-6 depicts those mature consumers who are likely to retire within five years and are more likely (Md=3, n=210) to consider seeking advice from a financial planner if they retire than those who are not retiring, (Md=2, n=413). This result is statistically significant, (p=0.000, U=32697, z=-5.580) with a small to medium effect r = 0.2 (J. Cohen, 1988).

Therefore those consumers who foresee retirement as imminent are moderately more likely to consider they would seek advice from a financial planner. This supports the relationship that imminent retirement elevates the need for financial planning.

Table 4-6: Results of the Mann Whitney U test comparing differences in likelihood of seeing a financial planner as a result of an impending life event⁵

Seek financial advice - receiving an allocated (non government) pension 3 2.6 173 1 1.73 504 21355 -10.866 0.000 0.40 Seek financial advice - getting married/remarried 3 2.34 50 1 1.25 606 6260 -9.657 0.000 0.35 Seek financial advice - to have increased responsibility for the care of a parent/aged relative 2 1.95 207 1 1.36 321 19656 -9.000 0.000 0.33 Seek financial advice - receiving a superannuation payout 3 2.64 158 2 1.96 503 24126 -8.145 0.000 0.30 Seek financial advice - moving to a smaller home 2 1.87 101 1 1.24 433 13451 -8.030 0.000 0.29 Seek financial advice - receiving a government pension 3 2.27 152 1 1.66 530 25939 -7.367 0.000 0.27 Seek financial advice - reducing the number of hours you work 2 1.86 187 1 1.39 360 23772 -6.537 0.000 0.24 Seek financial advice - retiring 3 2.49 210 2 2.06 413 32697 -5.580 0.000 0.20 Seek financial advice - moving to a larger home 1 1.7 57 1 1.24 597 11782 -5.459 0.000 0.20 Seek financial advice - receiving an inheritance 3 2.41 70 1 1.79 469 10342 -5.411 0.000 0.20 Seek financial advice - sending a child to secondary school 1 1.41 63 1 1.12 683 16489 -5.411 0.000 0.20

5 Three items were removed from this analysis because the sample size was too small: lose your business, have your last child move out of home and lose your job.

The relationship between an imminent life event and increased need for financial planning is replicated for each of the life events presented in Table 4-6. The results suggest similarities with the scholarly findings in chapter two, supporting the notion that a life event influences consumer decision making.

The life events in Table 4-6 are listed in rank order in terms of the largest effect.

‘Receiving an allocated (non government) pension’ is the life event which explains the largest variance between those participants that would seek a financial planner if the event occurred. The latter is a valuable finding because the higher the life event on the list the greater the affect of the life event on the inclination to change behaviour.

Marketers of financial planning services could use this to evaluate which events provide the biggest change in sentiment towards their product.

Whilst Table 4-6 shows an increased need to seek financial advice for each life event the statistics report the increased need as an aggregate for all consumers. The heightened need will not occur universally. There will not be a uniform 20% increase in need for financial services across all consumers experiencing a life event. Some consumers’ financial planning needs will be already met, some will have acted pre-emptively and some will never recognise the need. Therefore as surmised in the literature review there are consumers at different stages. Life events potentially move some consumers to a higher level of aroused need which changes their decision making process.