Glossary of Terms

Annuities – 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.

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

CCTS – 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.

CFA – 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 meet 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.

CFP – 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.

CPA – 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.

CRSP – The recognized standard of knowledge and competence for wealth management professionals specializing in retirement services. The CRSP certification signifies that an individual has attained comprehensive training in the following professional knowledge areas: plan type and design, laws and regulations, and investments.

Exchange Traded Funds – 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.

Fiduciary – 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.

PrimeSweep – PrimeSweep links your checking account to a money market fund so you can earn market rates on your excess cash. When the balance in your checking account exceeds a predetermined amount, the excess cash “sweeps” to the higher-yielding account. Similarly, when your checking balance falls below a predetermined amount, money is automatically transferred back to your checking account. It’s a fast, convenient way to keep your excess checking account balances working hard — every day.

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.