The Gamma Factors and the Value of Financial Advice

Claude Montmarquette and Nathalie Viennot-Briot
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Nathalie Viennot-Briot: CIRANO

Annals of Economics and Finance, 2019, vol. 20, issue 1, 387-411

Abstract: This study, based on a new Canadian survey and adjusting for the causality issue, reconfirms the positive value of having financial advice. As in our earlier paper, the discipline imposed by a financial advisor on households' financial behavior and increased savings of advised households are key to improving the value of household assets relative to comparable households without an advisor. Benefitting from a subset of participants in both surveys, we found that dropping an advisor between 2010 and 2014 was costly: households who kept their advisor saw the value of their assets increase by 16.4%, while households who dropped their advisor increased the value by only 1.7%. Thus, the value of financial advice goes largely beyond the traditional alpha and beta factors.

Keywords: The value of advice; Econometric models; Causality issue; Survival principle (search for similar items in EconPapers)
JEL-codes: C51 G11 G23 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (2)

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Related works:
Working Paper: The Gamma Factor and the Value of Financial Advice (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:cuf:journl:y:2019:v:20:i:1:montmarquetteviennot-briot

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