The below regression output is generated from a dataset used in the evaluation of these changes.

The dependent variable is Satisfaction (with the Financial Advisor)

The independent variables are:

Commission: This is a scale variable that reflcts an index of the value of the commission charged by the FA. 1 would reflect a lower commission and 10 would reflect the highest commission paid by the client

Tenure: This is a scale variable representing the number of years the FA has been involved iin selling products.

Size: A scale variable representing the relative size of the product's forecasted final value.

CPD: This variable indicates how many Continuous Professional Development Points the FA has accumulated in the previous CPD cycle provider.

Not__RA This variable is a dummy where where 0 is the reference category of Retirement Annuity products and 1 is coded as all other financial products sold by the FA.

Relcost: Relates to the relative cost of the products monthly premium

NOTE The SPSS Regression output is in the excel ouputs file.

4a. Evaluate the regression model in terms of its validity and usefulness. Be sure to highlight any model issues which are apparent and make recommendations as to how the model could be restructured. (15)

4b Some financial advisors argue that the costs of CPD are prohibitive and do not add any value to clients. They argue further that tenure of the FA in the industry is a better proxy for the skillset that leads to customer satisfaction.

Use the model to assess this argument.

(5)

Descriptive Statistics

Mean Std. Deviation N

Satisfaction 5,442 1,2084 100

Commission 7,810 1,3963 100

Tenure 3,672 0,7005 100

Size 5,365 1,5305 100

CPD 58,400 8,8609 100

Not_RA 0,48 0,502 100

Relcost 3,6240 0,64537 100

Correlations

Satisfaction Commission Tenure Size CPD Not_RA Relcost

Pearson Correlation Satisfaction 1,000 0,106 0,140 0,097 0,610 -0,037 0,120

Commission 0,106 1,000 -0,137 0,096 0,569 -0,111 -0,075

Tenure 0,140 -0,137 1,000 0,001 0,138 0,102 0,920

Size 0,097 0,096 0,001 1,000 -0,011 0,001 -0,006

CPD 0,610 0,569 0,138 -0,011 1,000 -0,223 0,154

Not_RA -0,037 -0,111 0,102 0,001 -0,223 1,000 0,130

Relcost 0,120 -0,075 0,920 -0,006 0,154 0,130 1,000

Sig. (1-tailed) Satisfaction 0,146 0,082 0,169 0,000 0,358 0,116

Commission 0,146 0,087 0,172 0,000 0,137 0,230

Tenure 0,082 0,087 0,497 0,086 0,157 0,000

Size 0,169 0,172 0,497 0,458 0,496 0,476

CPD 0,000 0,000 0,086 0,458 0,013 0,062

Not_RA 0,358 0,137 0,157 0,496 0,013 0,098

Relcost 0,116 0,230 0,000 0,476 0,062 0,098

N Satisfaction 100 100 100 100 100 100 100

Commission 100 100 100 100 100 100 100

Tenure 100 100 100 100 100 100 100

Size 100 100 100 100 100 100 100

CPD 100 100 100 100 100 100 100

Not_RA 100 100 100 100 100 100 100

Relcost 100 100 100 100 100 100 100

Variables Entered/Removeda

Model Variables Entered Variables Removed Method

1 Relcost, Size, Commission, Not_RA, CPD, Tenureb Enter

a. Dependent Variable: Satisfaction

b. All requested variables entered.

Model Summaryb

Model R R Square Adjusted R Square Std. Error of the Estimate Durbin-Watson

1 .702a 0,493 0,460 0,8877 2,001

a. Predictors: (Constant), Relcost, Size, Commission, Not_RA, CPD, Tenure

b. Dependent Variable: Satisfaction

ANOVAa

Model Sum of Squares df Mean Square F Sig.

1 Regression 71,283 6 11,880 15,077 .000b

Residual 73,281 93 0,788

Total 144,564 99

a. Dependent Variable: Satisfaction

b. Predictors: (Constant), Relcost, Size, Commission, Not_RA, CPD, Tenure

Coefficientsa

Model Unstandardized Coefficients Standardized Coefficients t Sig. 95.0% Confidence Interval for B Collinearity Statistics

B Std. Error Beta Lower Bound Upper Bound Tolerance VIF

1 (Constant) 0,790 0,847 0,932 0,354 -0,892 2,472

Commission -0,337 0,082 -0,389 -4,112 0,000 -0,499 -0,174 0,609 1,641

Tenure 0,089 0,332 0,052 0,268 0,789 -0,571 0,749 0,147 6,811

Size 0,112 0,059 0,142 1,910 0,059 -0,004 0,229 0,982 1,018

CPD 0,119 0,013 0,870 9,062 0,000 0,093 0,145 0,592 1,690

Not_RA 0,295 0,185 0,123 1,592 0,115 -0,073 0,664 0,918 1,090

Relcost -0,198 0,358 -0,106 -0,552 0,582 -0,908 0,513 0,149 6,695

a. Dependent Variable: Satisfaction

Collinearity Diagnosticsa

Model Eigenvalue Condition Index Variance Proportions

(Constant) Commission Tenure Size CPD Not_RA Relcost

1 1 6,372 1,000 0,00 0,00 0,00 0,00 0,00 0,01 0,00

2 0,485 3,623 0,00 0,00 0,00 0,00 0,00 0,89 0,00

3 0,072 9,434 0,00 0,00 0,01 0,74 0,00 0,00 0,01

4 0,049 11,367 0,00 0,15 0,02 0,15 0,04 0,03 0,01

5 0,010 25,305 0,27 0,79 0,01 0,00 0,35 0,01 0,02

6 0,009 27,079 0,72 0,03 0,00 0,10 0,60 0,06 0,00

7 0,003 50,481 0,00 0,04 0,95 0,00 0,01 0,01 0,96

a. Dependent Variable: Satisfaction