Glossary of Terms

Commonly used, industry terms

Glossary of Terms

A form of a contract sold by life insurance companies that guarantees a fixed or variable payment to the annuitant at some future time, usually at retirement.

Requires a large, lump sum payment at maturity to pay off the debt.

The acknowledged professional credential for financial services professionals whose primary function and expertise focus on the provision of corporate trust services. The CCTS designation signifies that an individual working in this field has attained comprehensive training in the following professional knowledge areas: laws and regulations, accepted policies and procedures, and market environment.

A global professional credential offered through the CFA Institute. The Chartered Financial Analyst (CFA) program is a graduate level program for investment professionals. A CFA Charterholder has met education and applicable work experience requirements and passed three sequential exams covering ethical and professional standards, quantitative methods, economics, financial reporting and analysis, corporate finance, equity and fixed income investments, derivatives, alternative investments, and portfolio management and wealth planning.

A professional certificate offered through the Certified Financial Planner Board of Standards. In order to qualify for a CFP, one must complete a series of tests measuring knowledge of retirement issues, estate planning, tax, and financial planning. One must also remain current on continuing education requirements. CFPs often advise clients on how best to manage their money.

Collateralized Mortgage Obligations
Mortgage-backed bond that separates mortgage pools into different maturity classes called tranches.

Common Stock
Units of ownership of a public corporation.

Corporate Bonds
Debt instruments issued by a private corporation.

A professionally licensed accountant. In the US, a CPA has passed the Uniform Certified Public Accountant Examination, and has met additional state education and experience requirements. One must also remain current on continuing education requirements.

Exchange Traded Funds (ETF)
Investment vehicle traded on stock exchanges, much like stocks or bonds. An ETF holds assets such as stocks or bonds and trades at approximately the same price as the net asset value of its underlying assets over the course of the trading day.

A person or organization entrusted with the property of another party and in whose best interests the fiduciary is expected to act when holding, investing, or otherwise using that party’s property.

Government Agency Bonds
Securities issued by U.S. government sponsored entities (GSEs) and federally related institutions.

Initial Public Offerings (IPOs)
Corporation’s first offering of stock to the public.

Municipal Bonds
Debt obligation of a state or local government entity.

Preferred Stock
Class of capital stock that pays dividends at a specified rate and that has preference over common stock in the payment of dividends and the liquidation of assets.

Treasury Bonds
Negotiable debt obligations of the U.S. government, secured by its full faith and credit.

Unit Investment Trusts
Investment vehicle that purchases a fixed portfolio of securities such as corporate, municipal, or government bonds, mortgage-backed securities, common stock, or preferred stock.