Social and Institutional Foundations for Trust in Customer-Financial Advisor Relationships: the moderating role of relationship length

Grayson, K and Johnson, D (2000) Social and Institutional Foundations for Trust in Customer-Financial Advisor Relationships: the moderating role of relationship length. Working Paper. London Business School Centre for Marketing Working Paper.

Abstract

Research on trust in marketing has focused primarily on processbased trust, which is the trust that grows between two specific exchange partners based on their interactions together. Yet, scholars outside of marketing have argued that trust between exchange partners is influenced by types of trust that have a broader scope of influence than processbased trust. These include role trust, institutionbased trust, and generalized trust. Using survey results collected from 586 clients of ficial advisors from four banks, we test competing theories about the influence of these broadscope trusts on processbased trust. Our results show that broadscope trust provides a foundation for processbased trust in exchange relationships. We also show that the influence of different types of broadscope trust can change, depending on the type of trust and on the age of the relationship. Our results also suggest that a serious breach of trust at the individual level can affect trust at a broader level. Lastly, we show that processbased trust can (again depending on relationship length) have a direct association with business outcomes, although the influence of broadscope trust on business outcomes tends to be mediated by processbased trust.