AbstractIt is no secret that Singapore’s population is ageing. With greater longevity, Singaporeans will need to plan better in order to sufficiently provide for their parents’, as well as their own, needs in old age. However, many people do not know how to plan for their financial future. This is why many different types of financial advisory organisations have been set up: to assist these individuals to have a proper financial plan for the future. This research focuses on the performance of independent financial adviser (IFA) organisations that are owned by individuals and provide personal financial planning services to the public. There are bigger financial institutions, like banks and life insurance companies, providing the same types of services, which means IFA organisations are not competing on a level playing field. To survive, IFA organisations in Singapore must attract more customers in this highly competitive and tight market. Unlike bigger financial institutions, IFA organisations are considered small enterprises; they do not attract a lot of attention. This is why their competing factors remain unexplored. In order to understand how IFA organisations survive in this fierce market and how they can stay competitive, this study examines the relationship between service quality, customer satisfaction and customer perceived value of financial advisers working in IFA organisations in Singapore. Empirical studies show that service quality and customer satisfaction are important concepts that every service provider must understand in order to remain competitive in business. Hence, the key objective of this study is to use the available literature to build a theoretical framework. The thesis suggests that there is a link between the dimensions of service quality and customer satisfaction, and that customer perceived value mediates the relationship between service quality and customer satisfaction in IFA organisations operating in Singapore.
Four research questions were formulated to answer the main research question. This research uses a quantitative method of hypothesis testing to validate the proposed theoretical model. A survey questionnaire was designed using a five-point Likert scale to measure the constructs. Exploratory factor analysis (EFA) was performed to explore the dimensions, and confirmatory factor analysis (CFA) was performed to confirm the validity of the dimensions. Then, the developed hypotheses were tested using a structural equation model (SEM) and analysis of a moment structures (AMOS). As a result, several knowledge gaps were identified.
The results generally confirmed the partial conceptualisations of the model. Service quality dimensions – that is, reliability, assurance, empathy and responsiveness – were found to have a statistically significant influence on overall customer satisfaction, but tangible factors were found to be insignificant. Similarly, perceived value dimensions – that is, professionalism, price, quality, emotional value and social value – were found to have a statistically significant impact on overall customer satisfaction, but the functional value of installation was found to have no impact. The hypothesis on the mediating effects of the relationship between service quality and customer satisfaction was partially supported. The results prove that service quality and customer perceived value have direct and significant effects on customer satisfaction. In addition, customer perceived value was found to partially mediate the relationship between service quality and customer satisfaction. The findings reinforce the claims that, when a higher level of service quality is extended to customers, customer satisfaction is achieved; further, if the service provider provides a higher level of perceived value, the customer will be even more satisfied.
The implication of this study is a theoretical contribution to new knowledge: the dimensions of service quality and customer satisfaction in IFA organisations are valuable for managers in the context of assessing and managing the quality of their service. There is no doubt that managerial awareness of the way dimensions of service quality influence customer satisfaction will help to develop competitive advantages for IFA organisations in Singapore. In addition, linking perceived value to the relationship between service quality and customer satisfaction, and testing its direct and indirect effect on customer satisfaction, makes a valuable contribution to knowledge. Thus, in order for managers to increase customer satisfaction, special considerations need to be carried out in their practice.
The findings of this study will open up new directions for future research in the financial advisory industry in particular, and, in terms of wider research, for the financial service sector as a whole. This research is unique as it is the first to test the application of SERVQUAL in IFA organisations, and it modifies the SERVQUAL measurement scales to be utilised in a developed country – that is, the city state of Singapore. From a management perspective, it enriches the theoretical basis for understanding the customer–adviser relationship, which leads to higher customer satisfaction in the financial advisory delivery process.
Keywords: service quality, customer satisfaction, customer perceived value, tangibles, reliability, responsiveness, assurance, empathy, SERVQUAL, independent financial adviser (IFA), financial advisers, financial planners
|Date of Award
|Cheng Teo (Supervisor) & Milind Sathye (Supervisor)