ADV - A legal disclosure document required to be produced by Registered Investment Advisers to register with the SEC and with state securities authorities. Includes Part 1, 2A and 2B. See www.sec.gov/answers/formadv.html for more information.
Accredited Investment Fiduciary® Designation - the AIF® designation training is offered by fi360 and offers instruction covering pertinent legislation and best practices for investment fiduciaries and professionals. AIF® designees have the ability to implement prudent processes into their own investment practices and to assist clients with policies and procedures. Designees must complete the training and examination requirements, adhere to a code of conduct and complete annual continuing education requirements. For more information, please visit www.fi360.com.
Broker-Dealer (Securities) - A company or person whose business is to buy or sell stocks and other securities. Also called a stock brokerage firm. A broker-dealer acts as a broker or agent when transacting on behalf of their clients, as a dealer or principal when trading for its own account, or both at the same time. Broker-dealers have registered representatives who receive commissions for selling products.
CFP® - CERTIFIED FINANCIAL PLANNER™ Professional registered with the CFP Board. Only investment professionals who have fulfilled the certification and renewal requirements of the CFP Board can identify themselves as CERTIFIED FINANCIAL PLANNER™ Professionals and are allowed to display the CFP® certification trademarks. They have completed a comprehensive program of study at a college or university approved by the CFP Board, have several years of professional experience related to financial planning, and have passed a comprehensive CFP® certification exam covering financial planning, tax, retirement and estate planning, investment management and insurance. CFP® professionals are held to the highest standards of ethics and professional responsibility. They act as a fiduciary in the best interests of their clients. They are required to complete a number of continuing education courses annually. To find a CFP® Professional, see www.cfp.net/utility/find-a-cfp-professional.
CRD® - Central Registration Depository. Operated by FINRA, Web CRD® is the licensing and registration system for the US securities industry. It contains records of over 6,800 registered broker-dealers along with the history and information of about 660,000 active registered individuals. Contact the FINRA Gateway Call Center at (301) 590-6500 for more information, or visit www.finra.org.
Custodian or Custodian Bank - A financial institution that holds, or custodies, clients’ securities such as stocks in an account for safekeeping to protect against theft or loss. Clients’ assets should be held in a custodian bank separate from the investment advisor.
Equity - A percentage of ownership in a company, often represented by stocks. Stockholders are the owners of the company.
ERISA - the Employee Retirement Income Security Act of 1974, a federal law that sets minimum standards for those in private industry who choose to establish pension plans including defined benefit and defined contribution plans such as 401(k) Profit Sharing Plans.
ETF - Exchange-Traded Fund, a type of security that generally tracks an index or group of equities, commodities or other assets, which trades like an individual stock on an exchange.
FINRA - Financial Industry Regulatory Authority.
FPA - Financial Planning Association®, a membership organization for CFP® professionals and others who support the financial planning process. FPA members are held to the highest standards of professional competence, ethical conduct and disclosure requirements. They are CERTIFIED FINANCIAL PLANNER™ professionals, educators, students and others. The FPA® website is www.OneFpa.org, and the Hawaii chapter, FPA of Hawaii, can be found at www.FPAHawaii.org. The FPA's website for the public to help find a CFP® professional is www.plannersearch.org.
Fiduciary Standard for Registered Investment Advisers - A legal requirement for fiduciaries to (1) Act in good faith, loyalty and care, (2) Place clients' highest and best interests above their own and (3) Avoid self-dealing and conflicts of interest.
The Hawaii Estate Planning Council - A professional association of Attorneys, CERTIFIED FINANCIAL PLANNER™ Professionals, Certified Public Accountants, Chartered Financial Analysts, Chartered Financial Consultants, Chartered Life Underwriters and Trust Officers. Their mission is to promote the interests of members and to further the growth and scope of the financial service professional. Their website is www.hawaiiestateplanningcouncil.org.
IAR - Investment Adviser Representative of a Registered Investment Adviser .
IARD™ - Investment Adviser Registration Depository, an electronic filing system for investment adviser registration and public disclosure requirements. Operated by FINRA.
IRA - Individual Retirement Account.
Mutual Fund - An investment products consisting of a pool of money from many investors in order to purchase stocks, bonds, cash instruments or other assets. A money manager is responsible for making the investment decisions for the investors according to the objectives stated in the fund's prospectus.
Prospectus - A legal document required by and filed with the SEC which provides detailed information about an investment, such as a mutual fund, offered for sale to the public.
QRP - Qualified Retirement Plan under the terms of ERISA, such as a 401(k) Profit Sharing Plan or a Defined Benefit Pension Plan.
RIA - Registered Investment Adviser, an entity registered with the SEC or the securities agency of a state for the purpose of giving advice on investing in stocks, bonds, mutual funds and other financial instruments. Individual representatives of the RIA are called Investment Adviser Representatives (IARs) and must be properly licensed and registered with the state and/or the SEC.
RMD - Required Minimum Distribution for certain retirement accounts. Must begin at age 70 1/2 in most pre-tax retirement accounts.
Roth IRA – A type of Individual Retirement Account that is funded with after-tax money and grows tax-deferred, with withdrawals that may be tax free if certain rules are followed.
SEC - Securities and Exchange Commission, a government organization for the regulation of the securities industry.
Suitability Standard for Broker-Dealer Representatives - Unlike the higher fiduciary standard which requires Registered Investment Advisers to place clients’ highest and best interests first, registered representatives of a broker-dealer are held to a “suitability” standard. This means that they are required to recommend investments that are suitable, or adequate for the client - even if these products may benefit themselves financially more than another product that may be in the client's best interests.
SPD - Summary Plan Description for QRPs. A summary document that discloses the important features of a QRP.