Adoption of a Comprehensive Web-Based Wealth Management Service

Introduction

Wealth management has become more important to consumers. In developed economies, the shapes of population pyramids, the traditional roles of families and the ties between family members have changed. Furthermore, despite the recent recession, consumer wealth has accumulated to levels never before experienced (Hamilton, 2007). A growing number of consumers are left with excess funds after covering the costs of everyday living. These and other developments have impacted social security services both publicly and privately funded. Consumer wealth management is the means to plan and balance income and expenses over longer periods of time and to provide financial security (Asher, 2001), for example, to complement publicly funded social security or to maintain good quality of life after retirement.

Private banking, insurance planning and various investment services have been offered to the wealthiest consumers for a long time. From a service provider’s perspective, it is uneconomical to offer such personalised services to all consumers due to high costs. Other service production and distribution channels, especially those facilitated by the internet and IT, offer the possibility to address the wealth management needs of consumers who are not given access to personalised services. Service production costs can be reduced by combining electronic and personal services, as consumers take care of some service process tasks themselves via self-service, routines are automated and personalised services are restricted to the most demanding service process tasks (Apte & Vepsalainen, 1993). A service provider may also want to offer better integrated overall service to consumers and by doing so to overcome the product silo effect (Lessard & Zaheer, 1996) which is typical for the finance industry.

The complexity of financial instruments, markets and services makes the management of wealth, such as the selection of instruments, financial services or wealth management service provider(s), a challenging task for the consumer. Moreover, the consequences of decisions and wealth management behaviour in general fundamentally impact the consumer’s wellbeing. It can thus be argued that wealth management and related decisions require significant commitment from the consumer, both intellectually and otherwise. Consequently, wealth management is also well suited for research exploring the adoption of services facilitated by the internet.

In light of this, we participated in an R&D project in 2007 and 2009 funded by the Finnish Technology Agency with the target of designing and implementing a new “innovative comprehensive wealth management service for consumers”, used mainly via the internet. In addition to academic researchers from Finland and the US, the project involved a major Finnish banking and insurance group, a major Finnish business media company, the Financial Supervisory Authority of Finland and the Federation of Finnish Financial Services.

Due to high service development investments, one of the key considerations was whether the intended users would adopt the developed service and if so, what factors encouraged them to do so. How the service provider should investigate consumer attitudes in order to understand what drives consumer behaviour is another related issue. This article reports the results of our consumer survey with a focus on two research questions: (1) to what extent does cognitive deliberation explain consumer attitudes towards the developed web-based service and (2) what are the main components of this deliberation? Cognitive deliberation is a concept in cognitive psychology which describes behaviour where an individual determines future action(s) based on consciously processing information as opposed to relying on habits, intuition and situational factors.