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Buyer-seller
Antecedents and consequences of relationship
buyer-seller relationship quality quality
in the financial services industry
359
Lova Rajaobelina and Jasmin Bergeron
School of Business and Management, University of Quebec in Montreal, Received December 2008
Montreal, Canada Revised April 2009
Accepted May 2009

Abstract
Purpose – The purpose of this study is to develop a model that investigates the antecedents and the
consequences of buyer-seller relationship quality in the financial services.
Design/methodology/approach – Data were collected from a survey of more than 400 dyads (414
financial advisors and 772 clients in Canada) and were analyzed using structural equation modeling
(SEM).
Findings – The results notably show that, for both financial advisors and clients, customer
orientation has an impact on buyer-seller relationship quality, whereas buyer-seller similarity does
not. The link between relationship quality and both consequences (purchase intention and
word-of-mouth) is significant for the two samples.
Research limitations/implications – Limitations and research directions refer to the measure of
word-of-mouth construct, which is only weakly reliable, and the need to consider a multilevel approach.
Practical implications – The study can be helpful for financial advisors to build effective strategies
for enhancing their relationships with clients.
Originality/value – The study is one of the few to consider both perceptions (financial advisors and
clients) in order to analyze buyer-seller relationship quality in the financial services sector.
Keywords Buyer-seller relationships, Financial services, Relationship marketing
Paper type Research paper

Introduction
In an age of increased depersonalization and automation impacting upon financial
service quality and delivery, the relevance of the “relationship” concept could be
brought into question (O’Loughlin et al., 2004). Also, not all customers prefer to engage
in a close relationship with their current service provider (O’Loughlin et al., 2004;
Shekhar and Gupta, 2008). Therefore, it may be neither possible nor profitable to create
close, personal and long-term relationships with all consumers (O’Malley and Tynan,
2000) and a combined transactional and relationship marketing approach may be
necessary in order to recruit new customers and retain existing ones (Walsh, 2002; in
O’Loughlin et al., 2004).
However, the literature proposes that the relationship marketing approach still
takes a preponderant place in the financial services context (Athanassopoulou, 2006;
O’Loughlin et al., 2004). Both academics and practitioners have given credit to the International Journal of Bank
concept of relationship marketing during the last decade (Srinivasan and Moorman, Marketing
Vol. 27 No. 5, 2009
2005). Relationship marketing stresses the development and maintenance of pp. 359-380
long-lasting relationships between the firm and its customers (Sheth and Parvatiyar, q Emerald Group Publishing Limited
0265-2323
1995). Long-term customer relationships are considered to be one of the most important DOI 10.1108/02652320910979889
IJBM business assets for business organizations (Collier and Bienstock, 2006). Many studies
27,5 (Crosby et al., 1990; Morgan and Hunt, 1994; De Wulf et al., 2001) state the positive
impact of relationship marketing on seller’s performance as the increase of selling,
market share and profit.
Owing to the intangibility and complexity of the characteristics related to service
delivery, it is important to manage adequately the relationships with customers in the
360 financial services sector (Eisingerich and Bell, 2007; O’Loughlin et al., 2004; Shekhar
and Gupta, 2008). Even though the clients may be affected by their relationship with
the firm, they are even more affected by their interpersonal relationship (Palmatier
et al., 2007).
Relationship quality is considered as an overall assessment of the strength of a
relationship (Garbarino and Johnson, 1999) and captures the essence of relationship
marketing (Jap et al., 1999, Ural, 2007). It plays a critical role in the study of long-term
relationship maintenance (Finn, 2005). A strong relationship is an intangible asset,
which cannot be easily duplicated by competitors (Wong et al., 2007).
The financial services sector is a competitive sector, which needs to strengthen the
relationship with the clients in order to dissociate from the other companies. Financial
advisors should more than ever develop a good and sustainable relationship with their
clients. Indeed, mutual benefits result from maintaining good relationships. From the
customer’s perspective, the positive benefits of relationship marketing can only be
carried out if customers are willing to engage in long-term relationships (Gwinner et al.,
1998). For financial services companies, since researchers have concluded that it is five
times more expensive to acquire new customers than to keep existing ones
(Athanassopoulou, 2006), the development of a strong customer relationship can
improve customer loyalty, which in turn leads to increased profits for the firm
(Reichheld, 1993, Athanassopoulou, 2006).
The objective of this study is to investigate the antecedents affecting relationship
quality and its consequences between financial advisors and their customers.
Comprehending the essentials of what determines relationship quality can provide
useful management insights into developing effective strategies that allow financial
services companies to retain customers. To best of our knowledge, this study is the
first to consider both perceptions (financial advisors and clients) in order to reach our
goal.
The rest of the article proceeds as follows: in the next section, we describe the
concept of relationship quality. Then, we overview the hypotheses development.
Further, we present the methodology followed by the results. Finally, we discuss the
results and offer conclusions including future research directions.

Relationship quality
The relationship marketing literature is abundant (e.g. Berry, 1983; Morgan and Hunt,
1994) and particularly in the banking sector (e.g. Perrien et al., 1993; Ricard and
Perrien, 1999). Regarding the literature of relationship quality in the financial services
(see Table I), Crosby et al. (1990) were the pioneers followed by Wray et al. (1994). The
latest study that encompassed the subject was conducted by Wong et al. (2007) in
Hong-Kong. We also incorporate in Table I some studies from “experience-based”
services sector (e.g. restoration, airlines) in order to compare with the financial services
sector which is inherently “credence quality”. Financial products as complex services

Authors
Crosby et al. (1990)
Wray et al. (1994)
Smith (1998)
Shamdasani and
Balakrishnan (2000)
Lages et al. (2005)
Kim et al. (2006)
Macintosh (2007)
Wong et al. (2007)
Cheng et al. (2008)
Notes: a Sales effectiveness and anticipation of future interaction were non-significant; b Loyalty represents repeat purchases, proportion of purchases,
purchase sequence, and probability of purchase
Literature on relationship
Table I.
quality
Relationship quality
Trust, satisfaction
Trust, satisfaction
Trust, commitment,
satisfaction
Trust, satisfaction
Amount of information
sharing, communication
quality, long-term orientation,
satisfaction
Trust, satisfaction
Trust, satisfaction
Trust, satisfaction
Trust, satisfaction
Antecedents of relationship Consequences of relationship
quality quality Context
Similarity, expertise, relational Nonea Whole life insurance (151
selling (cooperative intentions, policyholders in the USA)
mutual disclosure, and
intensive follow-up contact)
Ethics, expertise, relationship None Financial services (564
duration, selling orientation, customers in the USA)
customer orientation
Relationship duration None 366 members of the
Purchasing Management
Association of Canada
Expertise, customer Loyaltyb 325 Singaporean clients of hair
knowledge, friendliness, salons
similarity
Expertise None Relationship quality between
the exporting firm and the
importer (sample of 111 UK
exporters)
Customer orientation, Commitment, loyalty, 887 dinner patrons at 21
communication, relationship word-of-mouth luxury restaurants in Korea
benefits
Customer orientation, Word-of-mouth, loyalty 220 Canadian business
expertise travelers regarding their
relationships with their travel
agents
Information sharing Willingness to refer, 207 consumers of financial
anticipation of future services in Hong Kong
interaction
Customer orientation, Commitment, loyalty Airline relationship quality:
expertise, interpersonal 252 domestic passengers in
relationship Taiwan
Buyer-seller
relationship
quality
361
IJBM are different from standardized services such as those offered by hotels and airlines
27,5 (Materson, 2008). Customers may, for example, expect the same level of service from
hotels and airlines from one period to another. On the contrary, they are harder to
please regarding mutual funds or stocks (Materson, 2008). Therefore, the
generalization of findings from standardized services to complex services is
questionable. We then mostly dwell on the three studies (shaded in Table I) in the
362 financial services.
Relationship quality has been defined as a bundle of intangible values resulting in
an expected long-term relationship between related parties (Levitt, 1981; Zineldin,
2000; Fruchter and Sigué, 2005). Hennig-Thurau and Klee (1997, p. 751) described
relationship quality between customers and firms as the degree of appropriateness of a
relationship to fulfill the needs of the customer associated with the relationship. This
notion is generally recognized as a higher-order construct (Ural, 2007). Crosby et al.
(1990) suggest that relationship quality consists of two dimensions: trust in the
salesperson and satisfaction with the salesperson. In addition, there seems to be an
agreement on defining this concept as a second-order factor of trust and satisfaction in
the banking literature (Crosby et al., 1990; Wray et al., 1994; Wong et al., 2007) but also
in different context such as restoration, airline relationship, hair salons (Shamdasani
and Balakrishnan, 2000; Kim et al., 2006; Macintosh, 2007; Cheng et al., 2008).
The literature has brought trust as one of the main factors which play an important
role in influencing a customer to develop and maintain relationship with the service
provider (Liang and Wang, 2006; Shekhar and Gupta, 2008). It is generally thought to
be a key determinant of the quality of buyer-seller relationships (Ndubisi, 2007; Swan
et al., 1999). Ganesan (1994) and Doney and Cannon (1997) contends that trust engulfs
two dimensions:
(1) objective credibility, defined as the belief that the other has the expertise to
perform the job; and
(2) benevolence, defined as the belief that the other has motives beneficial to the
target when new conditions arise for which a commitment was not made.

In addition, satisfaction with the relationship is regarded as an important outcome of

buyer – seller relationships (Liang and Wang, 2006). Nowadays, customer satisfaction
still represents an imperative cornerstone for customer-oriented business practices
across a multitude of companies operating in diverse industries (Szymanski and
Henard, 2001) and can be considered the essence of success in our highly competitive
business world (Jamal and Naser, 2002). Relationship satisfaction is defined as a
consumer’s affective state resulting from an overall appraisal of his or her relationship
with a retailer (Crosby et al., 1990; Liang and Wang, 2006). Jap (2001) described
relationship satisfaction as a positive affective state resulting from the appraisal of all
aspects of a working relationship. Geyskens et al. (1999) conceptualized two
dimensions of satisfaction: non-economic (e.g. communication skills, expertise) and
economic (e.g. sales, return on investment).
However, there is no consensus concerning the antecedents and the consequences of
the relationship quality. In Crosby et al. (1990) study, the consequences of relationship
quality were not significant. Also, Wray et al. (1994) did not consider the relationship
quality consequences. Finally, although the consequences of relationship quality were
covered in Wong et al.’s (2007) work, only the information sharing was treated as an
antecedent. Therefore, this study fills the gap by considering most of the antecedents Buyer-seller
and consequences by adapting Crosby et al.’s model. Furthermore, relationship quality, relationship
from the customers’ perspective, has received attention by researchers during the last
decade but no study has dealt with this issue from the financial advisors’ perspective. quality

Hypotheses development
Antecedents 363
According to the literature (see Table I), expertise seems to be the most cited
antecedent of relationship quality. Also, customer orientation is often mentioned.
Similarity and customer knowledge are sometimes considered as antecedents. Some
constructs such as communication, information sharing, and duration relationship are
seldom stated. In this study, client knowledge, customer orientation, expertise, and
similarity will be considered.
Client knowledge. In the academic literature, customer knowledge has emerged in
the past two decades in research on the quality of services and on relationship
marketing. In relationship marketing, customer knowledge has often been considered
as a significant dimension of the force of the relationship between a service provider
and its clients (Paulin et al., 2000). Knowing the customer is an essential component of
the buyer-seller relationship. It is a determining element of the quality of a sound and
efficient relationship (Blanchard et al., 2001) and it contributes to creating a unique and
inimitable competitive advantage. Teas (1988) observes that knowing the client, and
understanding his/her situation influence the quality of the relationship. Therefore, we
hypothesize that:
H1. Client knowledge is positively related to relationship quality.
Customer orientation. Customer orientation is initially developed in personal selling
management and is often regarded as an indicator of the quality of buyer-seller
relationships (Cheng et al., 2008). Brown et al. (2002) describe customer orientation as a
personality variable that reflects the service seller’s disposition to meet customer
needs. A pillar of a customer-orientation approach is that salespeople must understand
customers’ needs, expectations, and concerns (Saxe and Weitz, 1982). Salespeople that
are customer oriented are concerned with satisfying their needs better than would their
competitors (Wray et al., 1994). Bejou et al. (1996) use artificial neural network analysis
to investigate the determinants of relationship quality and find that the degree of
customer orientation has a significant impact on the customer’s trust and satisfaction.
Hence, we posit the following hypothesis:
H2. Seller’s customer orientation is positively related to relationship quality.
Expertise. Domain expertise is typically assessed by a service provider’s level of
knowledge and experience with regard to the focal product or service. Crosby et al.
(1990) indicate that “a salesperson’s expertise reflects the identification of relevant
competencies associated with the goods or service transaction”. In their study of
insurance salesperson-customer relationships, they find that an insurance
salesperson’s expertise has a significant effect on relationship quality. Experienced
and knowledgeable employees can reduce customers’ perceived uncertainty and
anxiety, which may lead to higher customer satisfaction and trust. The level of
expertise possessed by employees including knowledge, experience or skills relevant to
IJBM a particular domain or activity is a vital determinant of relationship quality. Thus, the
27,5 following hypothesis is offered.
H3. Seller’s domain expertise is positively related to relationship quality.
Similarity. Buyer-seller similarity has been examined in a large number of empirical
studies across literatures in marketing and social psychology, and has been debated in
364 sales research for over 35 years (Dwyer et al., 1998; Evans, 1963; Lichtenthal and
Tellefsen, 2001). Some researchers found statistically significant relationships between
similarity and performance criteria, such as greater relationship investment, trust,
satisfaction, and sales (Crosby et al., 1990; Smith, 1998). As relationship quality is a
second-order of trust and satisfaction, we propose the following hypothesis:
H4. Buyer-seller similarity is positively related to relationship quality.

Consequences
Loyalty, purchase intention (anticipation of future interaction for Wong et al., 2007) and
word-of-mouth (sometimes defined as “willingness to refer”) (see Table I) are the most
common consequences. Notwithstanding, commitment is sometimes cited. In this
paper, purchase intention and word-of-mouth will be considered as consequences.
Purchase intention. Purchase intention refers to the degree of perceptual conviction
of a customer to repurchase a particular product (or service) or to repurchase any
product (or service) at a particular organization. The essence of purchase intention
encompasses concepts such as probabilities and expectations. Kellerman (1987)
identified purchase intention as an outcome goal of dyadic encounters. Given that the
cost of retaining an existing customer is less expensive than prospecting for a new
customer (Spreng et al., 1995), purchase intention is a very important consideration for
businesses. The best predictor of the likelihood that a customer will seek future contact
with a financial services provider is the quality of the relationship to date (Wong et al.,
2007). We therefore suggest that:
H5. There is a positive relationship between relationship quality and purchase
intention.
Word-of-mouth. Getting existing customers to provide referrals should be one of the
effective ways to add new business (Collier and Bienstock, 2006). A referral from a
customer can often open the gates and allow a salesperson access to previously
unreachable prospects. Huntley (2006) found that when the quality of relationship is
high, customers are more willing to recommend the seller’s offerings to colleagues and
they purchase more from the seller. Maintaining high-quality relationships with
customers appears to increase their willingness to provide referrals (Finn, 2005). This
leads to the following hypothesis:
H6. There is a positive relationship between relationship quality and
word-of-mouth.
Our six hypotheses related to the antecedents and the consequences of buyer-seller
relationship quality in the financial services sector lead to the following proposed
model (Figure 1).
 Buyer-seller
relationship
quality

365

Figure 1.
Proposed model

Method
In this research, the financial services sector is used as the arena for investigating the
antecedents and consequences of perceived relationship value in buyer-seller
relationships. We collected data from financial advisors and their clients[1].

Measures
In this study, relationship quality was measured with two global indicators,
satisfaction and trust, which were developed by adding the three individual items
representing satisfaction and trust. Sanzo et al. (2003) argued that satisfaction
measures[2] should include an evaluation of the economic and non-economic aspects of
the relationship. In the case of financial services, economic satisfaction is relevant since
it depends greatly on the salesperson’s advice. One item was employed to assess
economic satisfaction. Non-economic satisfaction implies a positive affective response
towards relationship’s psychological aspects, in such a way that a satisfied customer
enjoys dealing with the salesperson, given the belief that the latter is concerned for
their welfare and will be willing to exchange relevant information (Geyskens et al.,
1999). One item of non-economic satisfaction was derived from Lagace et al. (1991).
A last item was added to capture satisfaction at a global level.
As stated in Swan et al.’s (1999) meta-analysis of customer trust in the salesperson,
the measures of trust have covered three levels of abstraction. First, some measures
focused on specific salesperson behaviors, such as “keep promises” (Crosby et al.,
1990). Second, other authors used attributes that are broader than a specific behavior,
such as “dependable”. A third level of abstraction included general trust measures that
do not reference to either specific behaviors or attributes, such as “trustworthy”. We
employed three items to represent each level.
Three items were derived from Bergeron (2004) to measure a salesperson’s
knowledge of the client’s needs, objectives, and expectations. Saxe and Weitz (1982)
introduced what is probably the most accepted scale of customer orientation: the SOCO
IJBM scale, a tool for measuring the customer orientation of salespeople. Michaels and Day
27,5 (1985) successfully adapted the self-report SOCO scale for customer samples. Thus,
two items were borrowed from Saxe and Weitz (1982) and Michaels and Day (1985) to
measure customer orientation.
To assess the expertise construct, we adapted three items from the scale developed
by Bergeron et al. (2001) in the banking industry. To measure internal characteristics,
366 we adapted Crosby et al.’s (1990) scale of buyer-seller similarity. To answer the call of
Lichtenthal and Tellefsen (2001), we also added one question regarding buyer-seller
similarity of business-related characteristics. The two-item purchase intention scale
was based on the work of Ramsey and Sohi (1997).
Bergeron and Vachon (2008) think that measures should include aspects linked to
intentions (e.g. I intent to buy from this salesperson again) and expectations (e.g. I
expect to purchase from this salesperson again). Since we wanted to adopt a
multidimensional conceptualization of WOM, two items were derived from Bergeron
et al.’s (2001) study. These indicators measured the likeliness of positive and negative
WOM communications in the future. An additional indicator, derived from Boles et al.
(1997), assessed the probability of providing referrals to the salesperson if he/she asked
for them. All measures were on a seven-point scale with anchors of “strongly disagree”
(1) to “strongly agree” (7). Measures are presented in Table II.

Procedures and samples

Before collecting data, a three-step pretest procedure was followed. First, a draft of the
questionnaire was shown to three university professors specialized in banking
research who suggested significant changes to font, character spacing, and question
wording. Second, the questionnaire was analyzed and reviewed by two banking sector
experts. Again, face validity was examined and slight corrections were made. Third, a
reiterative pretest procedure was conducted with 48 financial advisors, as well as 12
customers.
Since the data from buyers and sellers were collected separately, we will examine
each sample independently. Of the 675 questionnaires sent to financial advisors, a total
of 418 were returned by the subjects, representing a response rate of nearly 62 percent.
Among those, four cases were eliminated for outliers[3], leaving 414 data cases
available for analysis.
Approximately 1,672[4] questionnaires were distributed to clients. A total of 778
questionnaires were returned to the university in a postage-paid envelope giving a
good response rate for customers of 46 percent. Of that number, six respondents were
discarded for outliers, resulting in a final sample of 772 customers.

Sample characteristics
Sample characteristics results are presented in Table III. The financial advisor sample
represented ten different financial institutions. In this sample, there were more women
(271; 65.6 percent) than men (142; 34.4 percent). A majority of financial advisors (75
percent) were aged 35 to 54. Nearly half (47 percent) of the sampled financial advisers
had a household annual income of more than $80,000 and 33.2 percent had an income of
$50,000 to $79,000. The respondents were well educated, with over 63 percent having a
university degree or the equivalent. The average tenure with their firm was 13.9 years,
 Buyer-seller
Constructs Authors
relationship
Relationship quality
Trust Swan et al. (1999)
quality
Usually keeps his/her promises
Is dependable
Is trustworthy 367
Satisfaction Lagace et al. (1991)
Satisfied with the information provided Sanzo et al. (2003)
Satisfied overall with the financial advisor
Satisfied with the monetary benefits provided
Antecedents of relationship quality
Customer knowledge Bergeron (2004)
Knew the client’s financial needs
Knew what the client expects
Knew the client’s financial objectives
Customer orientation Michaels and Day (1985); Saxe and Weitz (1982)
Was sincerely interested in satisfying the
client’s needs
Helped the client achieve his/her financial goals
Expertise Bergeron et al. (2001)
Had a good financial expertise
Knew well his products and services
Buyer-seller similarity Crosby et al. (1990)
Appearance Lichtenthal and Tellefsen (2001)
Behaviours
Personality
Consequences of relationship quality
Purchase intention Ramsey and Sohi (1997)
Intend to do business with financial advisor again
Expect to purchase financial products and/or
services from financial advisor in the future
Word-of-mouth Bergeron et al. (2001); Boles et al. (1997)
Client will talk positively about financial advisor
to people he/she knows
Client would provide referrals (e.g. friends, family,
and colleagues) to financial advisor if he/she
asked for them
Table II.
Notes: 7 points scale: 1 ¼ strongly disagree and 7 ¼ strongly agree Measurement summary

with an average of approximately 9.3 years experience selling financial products and
services.
The client sample consisted of 404 men (52.5 percent) and 366 women (47.5 percent).
Their median age ranged from 44 to 54 years and their median household annual
income ranged between $50,000 and $60,000. More than 43 percent of the respondents
had a university degree. On average, each respondent had done business with his/her
financial advisor for four years.
IJBM
Variable Range Bankers (%/sd) Customers (%/sd)
27,5
n 414 100.0 772 100.0
Gender Male 142 34.4 404 52.5
Female 271 65.6 366 47.5
Age 18 to 34 years 91 22.4 140 18.5
368 35 to 44 years 152 37.3 178 23.5
45 to 54 years 151 37.1 215 28.5
55 þ years 13 3.2 223 29.5
Height – to 1.65m 194 48.7 264 37.3
1.66m to 1.75m 129 32.4 274 38.7
1.77m þ 75 18.8 170 24.0
Income – to $49,999 81 19.8 279 38.1
(household) $50,000 to $79,999 138 33.2 231 31.6
$80,000 to $99,999 91 22.3 99 13.5
$100,000 þ 101 24.7 123 16.8
Level of studies Primary/High school 84 20.4 249 32.5
Some college 68 16.5 186 24.3
University 260 63.1 332 43.2
Civil status Single 52 12.7 150 19.5
Boyfriend/girlfriend 135 32.9 159 20.7
Married 180 43.9 338 44.0
Separated, divorced or
widowed 43 10.5 121 15.8
Financial advisors
Total selling experience (years) 9.3 7.5
Selling experience with the firm
(years) 13.9 10.1
Average number of client met
per week 11.9 5.7
Average number of times they
contacted their client per year 2.8 1.7
Clients
Experience with the institution
(years) 14.1 11.1
Experience with the advisor
(years) 4.0 4.8
Average number of institutions
with which the client dealt 2.0 0.9
Average percentage of banking
Table III. business done with this
Samples characteristics institution 72.6 30.4

Analysis and results

Reliability and validity
Three sets of analyses were conducted to assess for scale reliability for each sample: the
corrected item-total correlation, the Cronbach alpha and the composite reliability (see
Table IV). Results indicate that all the items had corrected item-total correlations
greater than 0.35, which represents the cutoff suggested by McKelvey (1976). Cronbach
alphas and composite reliability indexes were computed. Results[5] presented in
Table IV show that the alphas varied between 0.726 (for the “customer orientation”
 Factor loadings Corrected item-total Alphas of Cronbach Composite reliability Average variance
from CFA * correlations (a ) index (C.R.) extracted
Financial Financial Financial Financial Financial
Constructs advisor Client advisor Client advisor Client advisor Client advisor Client

Relationship quality 0.760 0.856 0.765 0.888 0.429 0.686

Trust 0.794 0.846 0.783 0.839 0.514 0.538
Usually keeps his/her promises 0.693 0.844 0.600 0.696
Is dependable 0.935 0.920 0.728 0.808
Is trustworthy 0.730 0.642 0.551 0.622
Satisfaction 0.731 0.874 0.731 0.873 0.417 0.563
Satisfied with the information provided 0.725 0.789 0.559 0.752
Satisfied overall with the financial
advisor 0.758 0.933 0.594 0.829
Satisfied with the monetary benefits
provided 0.651 0.768 0.522 0.706
Antecedents of relationship quality
Customer knowledge 0.798 0.917 0.793 0.917 0.465 0.617
Knew the client’s financial needs 0.842 0.889 0.621 0.820
Knew what the client expects 0.641 0.873 0.613 0.833
Knew the client’s financial objectives 0.762 0.872 0.688 0.844
Customer orientation 0.726 0.856 0.648 0.845 0.432 0.561
Was sincerely interested in satisfying
the client’s needs 0.645 0.831 0.480 0.735
Helped the client achieve his/her
financial goals 0.795 0.842 0.480 0.735
Expertise 0.753 0.876 0.753 0.865 0.510 0.615
Had a good financial expertise 0.867 0.933 0.604 0.763
Knew well his products and services 0.708 0.806 0.604 0.763
(continued)
relationship
Buyer-seller

factor and reliability

analyses
Measures and relevant
quality

369

Table IV.
 27,5

370
IJBM

Table IV.
Factor loadings Corrected item-total Alphas of Cronbach Composite reliability Average variance
from CFA * correlations (a ) index (C.R.) extracted
Financial Financial Financial Financial Financial
Constructs advisor Client advisor Client advisor Client advisor Client advisor Client

Buyer-seller similarity 0.800 0.856 0.792 0.856 0.508 0.541

Appearance 0.705 0.681 0.633 0.674
Behaviors 0.876 0.889 0.722 0.765
Personality 0.781 0.863 0.576 0.782
Consequences of relationship quality
Purchase intention 0.787 0.860 0.763 0.860 0.494 0.597
Intend to do business with financial
advisor again 0.780 0.930 0.621 0.768
Expect to purchase financial products
and/or services from financial advisor
in the future 0.781 0.779 0.621 0.768
Word-of-mouth 0.387 0.850 0.364 0.848 0.295 0.622
Client will talk positively about
financial advisor to people he/she
knows 0.741 0.937 0.287 0.752
Client would provide referrals (e.g.
friends, family, and colleagues) to
financial advisor if he/she asked for
them 0.352 0.811 0.287 0.752
Notes: * All factor loadings were significant (0.05)
construct in the financial advisor sample) to 0.917 (for the “customer knowledge” Buyer-seller
construct in the client sample), and were above the recommended 0.7 threshold level
(Nunnally, 1978). Composite reliability indexes ranged from 0.648 to 0.917, which also
relationship
exceeds the 0.6 threshold necessary for measurement reliability (Bagozzi and Yi, 1988; quality
Fornell and Larcker, 1981).
Convergent validity can be assessed by examining the factor loadings and squared
multiple correlations from the confirmatory factor analysis. Following Hair et al.’s 371
(1998) recommendations, factor loadings greater than 0.5 are considered to be very
significant. All of the items in the research model had significant factor loadings
greater than 0.5. Also, squared multiple correlations between the individual items and
their prior factors were high (above 0.5 in all cases[6]). Thus, all factors in the
measurement model had adequate reliability and convergent validity.
Furthermore, we also assessed discriminant validity by following the suggestions of
Fornell and Larcker (1981): if proportion of variance extracted[7] in each construct
exceeds the square of the F coefficients representing its correlation with other factors,
discriminant validity is demonstrated. After comparing the correlations between other
constructs and there respective variance extracted estimates, we found an adequate
discriminant validity. Only one pair of scales (customer orientation and word-of-mouth)
did not respect the condition and then constitutes a weakness of this paper. The
correlation between them was (F ¼ 0:817 for financial advisors and F ¼ 0:884 for
clients, F2 ¼ 0:667 for financial advisors and F2 ¼ 0:781 for clients; see Table V). The
variance extracted estimates for customer orientation were 0.432(financial
advisor)/0.561(client) and 0.295(financial advisor)/0.622(client) for word-of-mouth.

Measurement model
Confirmatory factor analyses (CFAs) were used to test the adequacy of the
measurement model using EQS 6.1. The results indicated a good fit between the model
and the observed data. The overall fit indices of the measurement model were
x2 ¼ 189.679 (d.f.142) (financial advisor)/220.175 (client) (d.f.142), p ¼ 0.000/0.000,
GFI ¼ 0.941/0.936, AGFI ¼ 0.913/0.906, CFI ¼ 0.990/0.995, SRMR ¼ 0.045/0.040,

Customer Customer Purchase Word-of-

knowledge orientation Expertise Similarity intention mouth

For financial advisor sample

Customer knowledge 1
Customer orientation 0.554 1
Expertise 0.584 0.424 1
Similarity 0.228 0.051 0.155 1
Purchase intention 0.498 0.634 0.410 0.106 1
Word-of-mouth 0.666 0.817 0.493 0.224 0.835 1
For client sample
Customer knowledge 1
Customer orientation 0.825 1
Expertise 0.762 0.773 1
Similarity 0.351 0.380 0.345 1 Table V.
Purchase intention 0.752 0.832 0.647 0.284 1 Correlation matrix among
Word-of-mouth 0.744 0.884 0.694 0.402 0.829 1 factors
IJBM RMSEA ¼ 0.030/0.030. Although the chi-square is not significant in each model, it is
27,5 known to be sensitive to sample size and trivial discrepancies (Fornell and Larcker,
1981; Doney and Cannon, 1997) and thus, is a poor indicator of model fit (Singh, 2000).
In contrast, other fit indices such as CFI, SRMR, and RMSEA are more appropriate for
assessing model fit (Bagozzi and Yi, 1988).
The comparative fit indices (CFI) for the two samples were 0.990 and 0.995, which
372 constitute another good indication that each measurement models represented an
adequate fit to its respective data (higher than 0.950) (Kline, 2005). Both GFI and AGFI
exceeded the recommended 0.9 threshold level (Bollen, 1989). In addition, SRMR and
RMSEA were lower than 0.06 and 0.05, respectively (Hu and Bentler, 1999; Kline, 2005).

Structural model
Overall model results. The hypothesized relationships in the model were tested
simultaneously using structural equation modeling. The resulting x2 were 217.933
(financial advisor) and 318.859 (client) with 159 degrees of freedom and the ratio of x2 to
degrees of freedom below 1:3 ( p ¼ 0.000/0.000; GFI ¼ 0.933/0.910; AGFI ¼ 0.911/0.881;
RMSEA ¼ 0.032/0.041; NFI ¼ 0.957/0.981; CFI ¼ 0.988/0.990), suggesting that the
hypothesized model fits the data. In Table V, the resulting standardized parameter
estimates are presented. The proposed integrated model explains 70.8 percent (for
financial advisor) and 91 percent (for clients) of the variance in relationship quality, 71.1
percent (for financial advisor) and 83.1 percent (for clients) of the variance in purchase
intention, and 87.6 percent (for financial advisor) and 81.8 percent (for client) of the
variance in the word-of mouth construct. We can conclude that the model presented
explains pretty well the variance of the main constructs.
Hypotheses testing. In Tables VI-VII, we present the resulting standardized
parameter estimates. Within the model, the estimates of the structural coefficients
provide the basic tests of the proposed theory. Following the proposed model, we first
addressed the antecedents of relationship quality and then discussed links among
relationship quality, purchase intention, and word-of-mouth.
Antecedents of relationship quality. H1 through H4 address the relationships among
relationship quality and its antecedents. H2, which predicts that customer orientation
has a positive impact on relationship quality is supported for both financial advisors
(g ¼ 0:635, p , 0:05) and clients (g ¼ 0:837, p , 0:05). H4, which suggests that
seller-buyer similarity affects relationship quality is not supported (g ¼ 0:061 (n.s.)
(financial advisor)/0.056 (n.s.) (client)). H1 and H3 which expect that customer
knowledge and expertise have positive impact on relationship quality show different
results. Whereas customer knowledge and expertise have an impact on relationship
quality for financial advisors (g ¼ 0:181, p , 0:05; g ¼ 0:156, p , 0:05), these links
are not significant for clients.
Relationship quality and its consequences. H5 and H6 pertain to the relationships
among relationship quality, purchase intention, and word-of-mouth. H5 predicts a
positive relationship between relationship quality and purchase intention. As
hypothesized, the path estimate is positive and significant for both entities
(g ¼ 0:839=0:912, p , 0:05), thus confirming H5. H6 expects that relationship
quality will display a positive relationship with word-of-mouth. Path estimate is
consistent with this prediction as evidenced by a positive path estimate
(g ¼ 0:936=0:905, p , 0:05). Hence, H6 is supported.
 Buyer-seller
Standardized parameter
estimates t-value relationship
(first number: financial (first number: financial Hypothesis testing quality
advisor sample/second advisor sample/second (financial advisor
Relationship number: client sample) number: client sample) sample/client sample)

Customer 373
knowledge ! RQ Supported/Not
(H1) 0.181/0.104 2.004 */1.233(ns) supported
Customer
orientation ! RQ
(H2) 0.635/0.837 5.030 */7.169 * Supported/Supported
Expertise ! RQ Supported/Not
(H3) 0.156/0.035 2.008 */0.512(ns) supported
Similarity ! RQ Not Supported/Not
(H4) 0.061/0.056 1.185(ns)/1.825(ns) Supported
RQ ! Purchase
intention (H5) 0.839/0.912 6.509 */15.353 * Supported/Supported
RQ !
Word-of-mouth
(H6) 0.936/0.905 6.665 */15.350 * Supported/Supported Table VI.
The structural model
Notes: * Significant; ns ¼ non-significant results

Fit statistics Value (Financial advisor/client) Recommended value

x2 217.933/318.859
Degrees of freedom 159/159
p value 0.000/0.000 $ 0.05
x 2/d.f. 1.370/2.005 # 3
GFI 0.933/0.910 $ 0.90 (Bollen, 1989)
AGFI 0.911/0.881 $ 0.90 (Bollen, 1989)
CFI 0.988/0.990 $ 0.95 (Kline, 2005)
NFI 0.957/0.981 $ 0.90 Table VII.
RMSEA 0.032/0.041 # 0.05 (Hu and Bentler, 1999; Kline, 2005) The structural model
SRMR 0.048/0.045 # 0.06 (Hu and Bentler, 1999; Kline, 2005) results

Discussion and implications

This paper has described the antecedents of relationship quality and its consequences
in the financial services sector, more exactly between the financial advisors and their
clients. To our knowledge, it is the first study to examine at the same time both entities’
perceptions of the relationship quality.
Customer orientation is the only antecedent, which has a significant impact on
relationship quality for both financial advisors and clients (see Figure 2). This result
validates Kim et al.’s (2006) study in luxury restaurants or Cheng et al.’s (2008) paper in
airline relationship quality. Likewise, the results corroborate Wray et al.’s (1994) work
on relationship quality in financial services. Consequently, financial advisors should
have customer-oriented attitudes and behaviors. They should maintain their
relationships with their clients by taking time to meet their needs and personalizing
IJBM
27,5

374

Figure 2.
Summary of results

the offer. Customer-oriented employees should always keep clients’ interests in mind,
take steps to clarify their needs and expectations, and engage in activities and
behaviors to satisfy the clients’ needs in a helpful way. Promoting customer orientation
among the personnel can be fruitful, coming from the person in charge of the financial
advisors. Also, during the recruitment stage, it is worthy to consider the employees’
customer orientation aptitudes such as being empathic. Finally, some coaching or
training focusing on improving employees’ customer orientation can be appropriate.
Doing consulting simulations or being supervised can help the employees to improve
their skills.
Surprisingly, there is no significant link between similarity and relationship quality
according to both financial advisors and clients. Contrary to the results of Crosby et al.
(1990), similarity does not constitute an antecedent of relationship quality though we
based our scale on items provided by these authors. Similarity may be an important
issue during the beginning of a relationship between financial advisors and their
clients; but after a while (the average length of relationship being four years in our
study), it would not be considered as a major factor.
We could also emphasize some interesting results related to the influence of client
knowledge and expertise on relationship quality. Whereas we found an impact of client
knowledge and expertise on relationship quality according to financial advisors, the
results are different for clients. Again, we could explain this non-significant influence Buyer-seller
of client knowledge and expertise on relationship quality by the relationship duration relationship
(average of fours years). In fact, duration may reassure the clients while reducing their
fears of financial advisors’ incompetency and of lack of knowledge. quality
Our study empirically supported the link between relationship quality and purchase
intention and thus confirmed the findings of Wong et al.’s (2007) study in Hong-Kong
financial services. Also, we found that word-of-mouth is linked to relationship quality. 375
In conclusion, relationship quality, a higher order construct made up of trust and
satisfaction, strengthens buyer-seller relationship. It improves customer purchase
intention, which in turn leads to increased profits for companies. Clients will have a
long-term relationship with their respective financial advisors and will be prone to
provide referrals.

Conclusion, limitations and research opportunities

This research adds to the relationship quality literature by focusing on the perceptions
of both entities. As expected, customer orientation constitutes a principal antecedent of
relationship quality. In this study, the buyer-seller similarity does not show a
significant influence on relationship quality.
Our study also has limitations that suggest avenues for further research. First of all,
the word-of-mouth construct for financial advisors was not reliable[8] and presented a
lack of discriminant validity with customer orientation construct. In addition, we
consider purchase intention as a consequence of relationship quality but not loyalty,
which is more common in the literature. Then, we can extend the current model in
including other antecedents such as relationship value[9] (Ulaga and Eggert, 2006),
communication, or length of relationship. We could also attempt to find out if there is a
significant link between relationship quality and financial advisors outcomes.
Future research could fruitfully examine potential differences in male-male,
male-female, female-male, and female-female financial advisors-clients relationships.
Such study could reveal and make us understand possible barriers to effective
buyer-seller relationships. Finally, we could consider a multilevel analysis (with clients
in level-1 and financial advisors in level-2) as we asked the financial advisors to give
the questionnaire to their four clients. We sincerely hope that the results and insights
presented in this research will be used as a spring-board for future research in a
domain growing in theoretical and practical importance.

Notes
1. Financial advisors would give a questionnaire to their four clients for self-administration.
2. Note that the measures were the same for the clients and the financial advisors. Only the
formulation changed. For example, if the measure of satisfaction for the client is (1) I am
satisfied with the information provided by the financial advisor, the measure of satisfaction
for financial advisor will be: the client is satisfied with the information that I provided.
3. Outliers are cases with the largest contribution to normalized multivariate Kurtosis.
4. A total of 418 participating bankers X four clients.
5. Only the word-of-mouth construct for financial advisors was weakly reliable (Cronbach
alpha and composite reliability below the threshold level).
6. The exception is the squared multiple correlation of item wom2 (for financial advisor) which
is 0.124.
IJBM 7. The formula
Pfor
ðl2 Þ
Average Variance Extracted (AVE) is:
27,5 AVE ¼ P 2 iP l: factor loading; d: error of measurement.
ðli Þþ d
8. The item wom2 poorly loads with the factor word-of-mouth for financial advisors. We could
not delete this item as we only have two items for this measure.
9. Most definitions present customer-perceived value as a trade-off between benefits and
sacrifices perceived by the customer in a supplier’s offering (Zeithaml, 1988; Monroe, 1990).
376
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About the authors

Lova Rajaobelina, MBA, is a PhD Candidate at the Business School of the University of Quebec
in Montreal, Canada. He is also a researcher for the financial services management department
Chair at the same university. His research interests are in bank marketing, hospitality and
tourism strategies, online consumer marketing, and research methodologies.
Jasmin Bergeron is Professor of Marketing at the Business School of the University of Quebec
in Montreal, Canada. He has delivered more than 1000 practical conferences in more than 50
financial institutions around the world. He has also published articles in journals such as the
Journal of the Academy of Marketing Science, the Journal of Retailing, the Journal of Business
Research, and the Journal of Service Research, among others. He has also authored several books
on selling and negotiating strategies in the financial industry. Jasmin Bergeron is the
corresponding author and can be contacted at bergeron.jasmin@uqam.ca

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