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What is the Gamma Factor?

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When it comes to financial planning, households who plan with an advisor have the advantage. Simply put, working with an advisor brings out the gamma factor.

The gamma factor is made up of two elements:

  1. A higher rate of savings with an advisor
  2. The discipline to stay in the market through ups and downs

Working with an advisor to create a financial plan helps clients prioritize saving. A plan can control spending and helps grow wealth. Advisors also help clients understand the market and make smart decisions in times of market uncertainty.

A 2016 study by the Centre for Interuniversity Research and Analysis of Organizations (CIRANO) highlights the impact of the gamma factor. The benefits of planning with an advisor are clear.

  • Canadian households with a financial advisor for 15 years or more accumulated 290 per cent more assets than households who did not use an advisor.
  • Canadians with an advisor had an annual rate of saving of 10.75 per cent compared to non-advised Canadians whose annual rate of saving was 6.7 per cent.
  • Households who no longer used the services of an advisor lost 34.2 per cent of their wealth.
  • Families who maintained relationships with their advisors saw their wealth increase by 26 per cent.

It’s never too late to find an advisor and start planning for your future.