| A |
1 |
Asset Allocation
Asset Allocation refers to the spread of investments between different asset classes. There are four main asset classes: cash, bonds, equities and property. It is impossible to set an ideal asset allocation for any client, but it is possible to use asset allocation models to set broad parameters. The aim of an asset allocation model is to create a portfolio that is well diversified, giving exposure to a wide range of investments and appropriate given your time to retirement and attitude to risk.
More Information: Risk and Asset Allocation
|
| B |
2 |
Benchmark
An agreed mix of assets that sets the target position for a portfolio.
|
| F |
3 |
Final Salary or Defined Benefit Pension Scheme
A traditional defined benefit (DB) plan is a plan in which the benefit on retirement is determined by a set formula, rather than depending on investment returns. For example, in a basic scheme a maximum pension of two-thirds final salary may be given on retirement where 40 years' service has been given.
More Information: Types of Pensions
|
| F |
3 |
FCA
Financial Conduct Authority - the authority responsible for the regulation of the financial services industry in the United Kingdom.
|
| F |
3 |
Financial Education
Refers to the set of skills and knowledge that allow an individual to make informed and effective decisions in order to achieve their financial goals.
|
| M |
4 |
Money Purchase or Defined Contribution Pension
In a money purchase scheme contributions are paid into an individual account. The contributions are invested, for example in the stock market, and the returns on the investment (which may be positive or negative) are credited to the individual's account. On retirement, the member's account is used to provide retirement benefits, sometimes through the purchase of an annuity which then provides a regular income.
|
| M |
4 |
Mortgage
A mortgage occurs when an owner uses his or her interest (right to the property) as security for a loan. All types of property can be secured with a mortgage and bear an interest rate that is supposed to reflect the lender's risk
|
| O |
5 |
OEICs and ICVCs
The term ICVC stands for Investment Company of Variable Capital. An ICVC is also an open ended pooled investment. ICVC
More Information: Unit Trusts, OEICs and ICVCs
|
| I |
6 |
Investment Management Service (IMS)
A pro-active investment and risk management service that values your investments against a target asset allocation at agreed intervals (either annually or quarterly). After detailed analysis of your portfolio, the IMS produces recommendations to rebalance your portfolio to your agreed target. By rebalancing your portfolio in this way, the IMS ensures you maintain exposure to the level of risk that you feel comfortable with.
|
| I |
6 |
ISA
ISA stands for Individual Savings Account and it's simply a special type of tax efficient savings and investment account. So an ISA isn't actually an investment itself, but more of a protective wrapper into which you can invest your money. There are two types of ISA
More Information: Quick guide to ISAs, Pensions vs ISA for Retirement
|
| P |
7 |
Platforms
A service that enables investments to be held and viewed in one place for administrative and reporting ease.
|
| P |
7 |
Portfolio
A portfolio is a collection of investments.
|
| R |
8 |
Retail Distribution Review (RDR)
On January 1st 2013, significant changes came in to force within the Financial Services Sector. These changes have been in development for some years and have been designed to raise the standards within the industry. The Retail Distribution Review, as it is called, groups the changes into 3 main areas:
- Adviser Qualifications and Professionalism – advisers are required to attain a higher minimum level of professional qualification
- Adviser Charging – advisers are required to explicitly disclose all client charges
- Service clarity – advisers are required to clearly describe their services as either independent or restricted
Should you wish to read more widely about these changes, a good place to start would be at the following link: http://www.fsa.gov.uk/rdr
Alternatively, any questions you may have can always be raised with your adviser either as part of a regular review or with a specific meeting to discuss which service(s) would best suit your needs. Please call the Woking office on 0800 368 7511 to arrange a meeting.
|
| S |
9 |
Stakeholder Pension
Stakeholder Pensions are a low cost pension product aimed at encouraging retirement savings. A stakeholder plan is not allowed to charge more than 1.5% as an annual management charge for the first 10 years of it being established, and thereafter, only 1%. Limits on contributions are low. You can invest as little as
|
| S |
9 |
Strategic Advice
A description of one of our services. Under this service we provide bespoke strategic advice around all aspects of your financial affairs including:
- Tax year-end planning
- Pensions (self invest and other)
- ISAs and other tax efficient investments
- Investment of lump sums and regular amounts
- Protection and Wills
- CGT and IHT issues
|
| T |
10 |
Today's Terms
Refers to the value of an investment at the end of a savings period in present value terms (i.e. discounted for inflation).
|
| T |
10 |
Tomorrow's Terms
Refers to the value of an investment at the end of a savings period in future value terms (i.e. without discounting for inflation).
|
| U |
11 |
Unit Trust
Unit trusts are a type of 'pooled investment'. A fund manager buys shares in a range of different companies and pools these in a fund; you then buy 'units' in the fund. Because the fund contains a range of shares the risk is spread. The fund is 'open ended' - the number of units rises and falls as investors buy and sell units. There is typically a difference between the buying and selling price of units, known as the bid-offer spread.
|
