Australian Accounting Standards Board
Return on a stock beyond what would be predicted by market movements alone. Cumulative abnormal return (CAR) is the total abnormal return for the period surrounding an announcement or the release of information.
Absolute return fund
A type of hedge fund. Absolute return funds aim to meet objective performance targets rather than benchmark norms.
Account-based income stream
A flexible retirement income stream that gives you unlimited access to your capital but no guarantees on how long the money will last. Account-based income streams include account-based pensions and account-based annuities.
A pension purchased with superannuation money on retirement. You can choose the amount of pension you receive each year within minimum and maximum levels set by law. Your superannuation money is progressively drawn down until it runs out. For most people aged 60 and over, these pension payments have been tax-free since 1 July 2007. Account-based pensions are also known as allocated pensions or transition-to-retirement pensions.
Earnings of a firm as reported on its income statement.
Benefits already accumulated, as distinct from those to be built up in the future, ie. how much you have already saved.
A superannuation fund where your accrued benefit is the total accumulated value of your contributions and interest, less fees and costs. It is sometimes referred to as a defined contribution fund.
An index that measures the movement of both the price and the returns of an index; for example, the movement in a share price and the dividends paid. An accumulation index assumes all returns are reinvested and compounded.
This is the period of time when a superannuation fund member is contributing to their superannuation account balance in the anticipation of funding their retirement at some point in the future, ie. usually when the member reaches retirement stage or drawdown stage.
An investment management style that seeks to achieve returns above a benchmark through asset allocation and stock selection, ie. through the skill of the investment manager. For example, if the Australian share market, as measured by the All Ordinaries Index, earns 10%, an active Australian share manager will try to earn more than 10%.
A portfolio formed by mixing analysed stocks of perceived non-zero alpha values. This portfolio is ultimately mixed with passive market-index portfolio.
See voluntary contributions.
A fee that covers the general running of the fund. A person pays this fee, and often other fees, annually to be a member of a given fund; some funds charge higher fees than others.
In estate planning terms, the administrator is the person appointed by a court to administer the estate of a person who dies interstate. An administrator performs the same function as an executor. A court may also appoint an administrator if a person dies leaving a will, but where there is no executor willing and able to apply for probate.
Adviser service fee
Commission paid to an adviser for recommending a fund.
Forecasts for alpha that are modulated to account for statistical imprecision in the analyst's estimate.
After-tax super contributions
A contribution made into an individual's super fund that is paid from their after-tax income. Also referred to as a non-concessional or personal super contribution.
A regular, fortnightly payment that an eligible person is entitled to receive from the government when they reach Age Pension age. Certain criteria must be met before a person is entitled to receive the government Age Pension. Administered by the government's social security system, the Age Pension is designed to provide income support to older Australians who need it.
Age Pension age
The age at which an Australian can claim the government Age Pension.
Age service pension
A taxpayer-funded income stream payable by the Department of Veterans' Affairs (DVA) to a veteran who 'served in operations against the enemy whilst in danger from hostile forces of the enemy'. Similar to the Age Pension, but is payable to veterans five years earlier than the Age Pension.
Conflicts of interest among stockholders, bondholders, and managers.
Aggressive investment mix
A mix of investments that aims for high long-term returns by taking on greater short-term risk and volatility. Consists mostly of assets such as shares and property.
Car insurance policies are based on either 'agreed' or market' value. An agreed value policy has a set dollar value for your vehicle. Market value policies value your car based on the make, model and condition.
An investment in livestock, farming, horticultural or forestry projects, usually through a managed investments scheme.
The use of computer programs to make trading decisions.
A pension or annuity arrangement where a person chooses to withdraw from their account on a regular basis (e.g. monthly), an amount within prescribed legal limits, until death or there is nothing in the account. On death, the balance may be paid as a lump sum to a designated beneficiary, used to buy a further pension for a surviving spouse or it may continue as a reversionary pension. The main difference between an allocated and a traditional pension is that the former offers access to the invested capital with some flexibility in the regular payment amount, but it offers no protection against the money running out during the person's lifetime.
The price at which a unit in a unit trust is purchased.
The abnormal return on an overvalued or undervalued investment.
A strategy in which you invest in positive alpha positions, hedge the systematic risk of the investment, and finally establish market exposure where you want it using passive index.
The abnormal rate of return on a security in excess of what would be predicted by an equilibrium model.
American depository receipts (ADRs)
Stocks that trade in the United States, but represent a specified number of shares in foreign stocks.
An American option can be exercised before and up to its expiration date. Compare with a European option, which can be exercised only on the expiration date.
A type of exercise style that allows the holder to exercise the warrant at any time up to and including the expiry date.
Date on which particular news concerning a given company is announced to the public. Used in event studies, which researches use to evaluate the economic impact of events of interest.
Annual member statement
A statement, required by legislation to be produced at least annually, sent to each superannuation fund member displaying specific information about their personal details and benefits. Information includes (but is not limited to): the amount at the beginning and end of the period and the calculation method; preserved amounts; member/employer contributions during the period; net earnings allotted; death benefit; and fees, charges and expenses.
Annual percentage rate
Interest rate is annualised using simple rather than compound interest.
A comprehensive report on a company's activities and financial performance throughout a given year. For superannuation funds, this is a document that gives fund members a snapshot of the benefits that members receive, details of the fund's performance in regard to different investment portfolios and other important fund information.
A series or stream of regular payments (e.g. a monthly pension), purchased with a life insurance or superannuation lump sum to provide a retirement income. Where a superannuation fund makes the payments, the word 'pension' may be used. Payment amounts depend on the lump sum, expected future investment return, frequency of payments, expenses and the life expectancy of the individual purchaser or the term, if it is a fixed-term annuity. Generally, the annuitant chooses a payment value of any amount between prescribed upper and lower limits.
Patterns of returns that seem to contradict the efficient market hypothesis.
The person specified in a trust deed or will who can appoint or dismiss the trustee of a trust.
The signal-to-noise ratio of an analyst's forecasts. The ratio of alpha to residual standard deviation.
All margin lenders publish a list of shares and funds against which they are prepared to lend. A maximum loan-to-valuation is assigned to each security. In recent years equity derivatives, such as options, have been included on approved lists.
A trustee company approved by the Australian Prudential Regulation Authority (which must be satisfied that the company can be relied on to perform the duties of a trustee in a proper manner) and fulfills other minimum liquidity/financial requirements. Only approved trustees can promote a public offer superannuation fund.
Australian Prudential Regulation Authority
A zero-risk, zero-net investment strategy that still generates profits.
Arbitrage pricing theory
An asset pricing theory that is derived from a factor model, using diversification and arbitrage arguments. The theory describes the relationship between expected return and factor exposure that follows from the absence of risk-free arbitrage opportunities.
Australian Securities and Investments Commission
The price at which a dealer will sell a security.
Ordinarily, gross income before any deductions are allowed.
Anything of value in the form of cash (including amounts owed), fixed assets such.as property or equipment, or intangibles such as a company's goodwill or brand. A superannuation fund's assets might include shares, property, cash or fixed interest investments. For accounting purposes, assets are resources held to produce future economic benefits, for example providing future cost savings or generating future revenue or capital gain.
The distribution of a super fund's money across a range of asset types.(shares, property, fixed interest and cash) to make up their investment portfolio. Superannuation fund trustees base their asset allocation decisions on the relative investment outlook of the asset classes as well as the investors' risk profiles.
A category or class of investments that your superannuation fund can hold. The major asset classes are shares, property, fixed interest and cash, which in turn can be broken down further to include, for example, domestic or international and direct or indirect property investments.
A specialist consultant expert in helping a super fund devise its investment strategy and select investment managers to execute that investment strategy. Sometimes also called investment consultants.
Asset-test exempt income stream
Reflects the one-sided nature of the relationship large scale suppliers of natural resources have with their customers.
Money that be withdrawn from an account whenever required.
At the money
The option's exercise price and the price of the underlying asset are equal.
A card that provides access to your own money via ATM and EFTPOS facilities.
A market where all traders in an asset meet (either physical or electronically) at one place to buy and sell.
Automatic teller machine (ATM)
A machine found in public places and outside banks used to withdraw cash from your account 24 hours a day.
Australian taxation office
ATO's role is to manage and shape the tax, exercise and superannuation systems that support and fund services for Australians.
Australian financial services licence (AFSL)
The licence required to provide financial advice legally. Any organisation (or person), including super funds, can't provide financial advice unless it holds an AFSL.
Australian government guarantee on deposits
Refers to the Financial Claims Scheme (FCS) which provides protection to depositors of up to $250,000 per account-holder per authorised deposit-taking institution (ADI) (bank, building society or credit union) in the event of the ADI failing.
Australian Prudential Regulation Authority (APRA)
One of the Federal Government agencies which regulates superannuation funds, and other financial sector bodies, ensuring they operate within specific financial guidelines.
Australian Securities and Investment Commission (ASIC)
One of the Federal Government agencies regulating superannuation funds and the financial services sector. ASIC's main areas of responsibility are the Corporation's Law and the Financial Services Reform Act. In broad terms, consumer disclosure issues (i.e. fees) are regulated by ASIC while prudential matters are regulated by APRA.
Average collection period
The ratio of accounts receivable to daily sales. Also called days' receivables
An employment standard that sets out minimum wages and conditions for an industry or occupation. Awards cover things like rates of pay, overtime, penalty rates and allowances.
Certain employer super contributions specified in industrial awards representing 3 per cent of an employee's wage, paid into a super fund. The unions and employers established industry funds to accept these contributions
Historically, individuals born between the years 1946 and 1961. You may also be a considered a member of the baby-boomer club if you were born in 1961-1965-at least for the reporting purposes of the Australian Bureau of Statistics
A super fund or investment option that spreads its investments across a range of asset classes, but where usually around 70 per cent of the fund is held in shares and/or property. A balanced fund aims to produce high rates of return over the medium.to long term and will usually occupy a middle position in terms of risk - more volatile than a primarily cash and fixed interest fund but less volatile than a fund investing only in shares and property. A balanced fund may also be referred to.as market linked, managed, capital growth, growth, managed growth.
Bank bill swap rate (BBSW)
The central benchmark interest rate in Australian financial markets at which banks will lend to each other (via bank bills) for periods of 6 months or less.
An investment option that can have more than half of a fund's assets in shares and the rest in property, fixed interest and cash. A balanced option often has a similar meaning as a growth option, but is generally more conservative than growth. You need to check the underlying assets rather than rely on terminology.
A process for individuals to be legally declared as being unable to meet their debt obligations.
A commonly used measure of movement in investment return or fees/charges. One basis point equals one hundredth of one per cent. For example, if interest rates increase from 6.00 per cent to 6.25 per cent, it has moved by 25 basis points.
In investing, an index that can be used to evaluate the performance of an investment.
Focuses on absolute returns and not wired to specific indices like the MSCI World Index
A person for whose benefit assets are being held. Beneficiaries of a superannuation fund are the members and their dependents.
The amount of money in the superannuation fund to which the fund member is entitled.
The rate at which a dealer is willing to buy the base currency.
Binding death benefit nomination
A binding nominations means a fund trustee must follow a member's instructions relating to what happens to the member's super benefit if he dies. For a nomination to be binding, a member must nominate that his death benefit be paid to one or more dependants or is to be paid to the member's state.
When an investor choose a number of model portfolios, in the proportions of their choice, to construct their personal portfolio.
Blue chip share
A share in a well-established company with a record of stable earnings over a long period, typically a market leader or among the top companies in its sector.
A medium to long-term investment issued by governments and companies which pays a regular, fixed interest amount for the term of the investment. The invested funds (the principal) are repaid at the end of the term (maturity).
The four emerging economies of Brazil, Russia, India and China which collectively represent a powerhouse of future growth opportunity
Bring forward rules
Rules that allow you to bring forward up to two years of non-concessional
A person who arranges a contract between you and, for example, an insurance or mortgage service provider. Brokers usually receive a commission or fee for arranging a contract.
A fee charged by a broker for service.
A number that identified a specific branch or other financial institution within Australia. The BSB number plus an account number identifies a particular account.
To accommodate small fluctuation in share and unit prices, margin lenders will allow the loan to valuation ratio to exceed the limit by a certain amount before making a margin call. This is called the buffer and is five or 10 per cent above the maximum LVR, depending on individual lenders.
Community-based financial institution usually owned by its members that offers traditional banking services like savings accounts and loans, listed on the APRA website as a building society. Also called a mutual building society.
The difference between the buying and selling price of shares or units in a unit trust or superannuation fund.
A check that prevents you from going over your limit on calls, texts or data.
Money, or assets, or amount available to invest.
A decrease in the value of a capital asset.
A profit that a fund makes on the sale of an asset.
Capital gains tax
Tax payable on any profit made from selling an investment property or other type of assets
Capital gains tax (CGT) cap
Additional lifetime limit of $1.515 million (for the 2019/20) in non-concessional contributions, from the disposal of qualifying small business assets.
Capital gains tax (CGT) discount
A discount that a super fund can take advantage of when it sells an asset previously held for more than 12 months. The CGT discount is one-third of the capital gains, which means that the tax applicable is effectively 10 per cent.
Capital gains tax (CGT) exempt component
The capital gain from the sale of active business assets that a small business owner can roll over into a super fund to finance retirement. This component represents when a person disposes of any business assets and claims the capital gains tax retirement exemption.
Capital gains tax (CGT) retirement exemption
A special tax exemption for small businesses that sell business assets and put the money towards retirement. Any capital gains on the disposal of business assets up to a life time maximum of $500,000 are tax exempt, provided the moneys are used for retirement purposes.
The increase in value of an asset over time. Also known as capital gain.
A product where investors are protected against significant loss of the amount invested. Can contain clauses and performance hurdles that limit the protection. Also called capital protection.
Capital stable fund
A fund that invests across a range of asset classes but with a significant portion in defensive assets such as fixed interest investments and cash and a small portion in growth assets such as shares and property. This type of fund aims to provide a moderate level of income with some capital growth.
A low-risk asset that delivers a positive return; for example, a term deposit.
Cash withdrawn from a credit card account. A transaction fee is usually charged, as well as interest
Money invested in short-term, interest-paying investments. Having money in a bank account is an example of a cash investment.
Cash management account
A transaction account used to receive cash from investments such as dividends or proceeds of sales, and from which new investments are purchased.
Cash out facility
Offered by many retailers such as supermarkets, where you can take out extra cash from your cheque or savings account when you pay for purchases with your debit card.
The interest rate charged on overnight loans between banks. The Reserve Bank of Australia (RBA) sets a target cash rate in order to control monetary policy.
In relation to property law, a caveat is a legal notice that shows who has an interest in your property. You can't register a dealing (for example, to sell the property) until all caveats are removed or you get the consent of any people who hold a caveat. To put a caveat on your property or remove a caveat, contact your state's Land Titles Office.
The Federal Government agency that administers Australia's social security system.
Centrelink Assets Test
A means test that assesses the value of the assets you own against asset thresholds, and determines your eligibility for the Age Pension and other social security payments
Centrelink Income Test
A means test that assesses the level of income you receive each your against income thresholds, and determines your eligibility for the Age Pension and other social security payments.
Certified Financial Planner (CFP) or CFP Professional
The highest level of FPA (Financial Planning Association of Australia) membership, requiring strong tertiary qualifications and significant experience.
A contract between a seller and a buyer who are effectively betting on the short-term movements in the price of shares or other traded investments. The gain or loss is the difference between the price of the asset when the contract was made and the price in the future when the contract is closed out. If the price increases, the seller pays the buyer. If the share price decreases, the buyer pays the seller. Contracts are usually made with borrowed money (leveraged) which can magnify gains or losses.
A return of funds from a retailer or service provider to a consumer's bank account, line of credit or credit card, often initiated by the consumer's bank.
This stands for Clearing House Electronic Sub register System and means the system established and operated by ASTC for the clearing and settlement of CHESS approved securities, the transfer of securities and the registration of transfers.
The process of moving a customer from one financial product to another in order for an adviser or broker to earn a fee. This practice usually has little or no benefit to the customer.
A clearout occurs when your lender has not been able to get in touch with you, despite making reasonable efforts to contact you.
A person who borrows money jointly with you. Each person is responsible for the loan, so if one of you does not pay, the other person must pay the full amount.
A payment made by the Government to the super fund of a low or middle income earner to reward them for making personal contributions to super.
An unexpected call or visit by an unknown person, trying to sell something.
Property or assets you put up as security for a loan.
Collateralised debt obligations (CDO)
A bundle of individual loans such as car loans, credit card debt or corporate debt put together and sold as a single investment.
Items that are rare or in demand and may increase in value over time. Examples include artwork, antiques, coins and wine.
A fee paid to an adviser or salesperson as an incentive for selling a particular product. An upfront commission is based on the sale amount of the product. An ongoing commission is based on the balance of the account.
Process of converting part or all of a pension or annuity into a lump sum.
A rate that helps you work out the true cost of a loan. It includes the interest rate, and most fees and charges relating to a loan, reduced to a single percentage figure.
Interest paid on the initial principal and the accumulated interest on money borrowed or invested.
Cover that provides the policy holder with broad protection. For example, comprehensive car insurance will cover loss or damage to your car and any damage you may accidentally cause to other people's property.
Federal Commissioner of Taxation (in charge of administering the income tax, GST, FBT, HECS, the Medicare levy and superannuation taxes).
Commonwealth Seniors Health Card (CSHC)
A cardholder pays a concessional price for prescriptions under the Pharmaceutical Benefits Scheme. This card is available of Age Pension age who don't receive the Age Pension and earn less than the income threshold for the card.
The conversion of an income stream into a lump sum amount
See employer sponsored fund
Complying Fund Status
The status a super fund attains when the fund allows all the rules under the superannuation and tax laws, including complying with the fund's trust deed.
Complying Income Stream
See complying pension
Complying Life Expectancy Income Stream
A complying income stream that's payable for a person's life expectancy
Complying Life Income Stream
A lifetime income stream that satisfies specific rules and, if started before 20 September 2007, receives favourable treatment for Age Pension eligibility.
Compulsory Superannuation Contributions
Employer contributions made under the Superannuation Guarantee Scheme.
Complying Superannuation Fund
A superannuation fund that has chosen to be regulated under the Superannuation Industry (Supervision) Act 1993 (SIS) and which meets the Government's operational standards for superannuation funds. Only Regulated Superannuation Funds can be complying funds. If a fund is not a Regulated Superannuation Fund and/or is non-complying, it is ineligible for taxation concessions and so it will be taxed at full company rates rather than the concessional superannuation fund rates.
A pension arrangement that satisfies extra prescribed conditions and so qualifies for higher RBL thresholds.
Compound Interest (or compound earnings)
Interest earned on interest or, in the case of a super fund, investment returns on returns.
Compulsory cash component
The percentage of cash held with the account to facilitate trading and payment fees.
This term applied to pre-July 2007 benefits. Certain redundancy and invalidity payments that were made before 1 July 1994.
Before-tax contributions that can include employer contributions, contributions made under a salary sacrifice arrangement and tax-deductible contributions by an individual.
Concessional contributions cap
Before-tax contributions receive concessional tax treatment up to this cap
Concessional super contributions
Concessional super contributions are payments put into your super fund from your pre-tax income and are tax deductible for self-employed people. They include your employer's super guarantee (SG) contributions. Concessional super contributions are taxed at 15% when they are received by your super fund.
Concessional Tax Rate
A rate of tax that's less than what a person ordinarily pays on income received during the year
Concessional Tax Treatment
A tax assessment that's subject to a concessional tax rate.
A process the Superannuation Complaints tribunal uses that attempts to get the parties to a complaint (the trustee and member) to resolve it by mutual agreement.
Condition of release
A term that means a member can take his super out of the super system after satisfying a condition, such as retiring, or becoming permanently disabled.
Records the condition of a rental premises at the start of a tenancy.
Conflict of interest
A situation in which someone in a position of trust has competing professional and personal interests which could make it difficult for them to remain impartial.
Ordinarily, a low-risk investment option - a significant portion of the investments in cash and fixed interest investments.
Money collected from taxpayers to run the Australian Government.
Consumer credit insurance (CCI)
Insurance that covers you if something happens that affects your capacity to meet the payments on your loan. CCI usually covers risk such as illness, death, disability or involuntary unemployment.
A consumer lease is an agreement where you get a hire an item (eg tv, fridge, washing machine), receive the item straight away and make regular payments until the term of the agreement finishes. At the end of the agreement term you will have paid more than the purchase price of the goods. These agreements might also be known as a rent to own, rent to buy agreement.
Consumer Price Index (CPI)
A measure that tracks quarterly changes in the price of goods and services . CPI increases are also known inflation.
The document that sets out the system of fundamental principles that the Federal Parliament can make law in. A matter not listed in Australia's Constitution us automatically a State issue.
Upfront fee payable to an adviser or a financial organisation on contributions an individual makes to retail superannuation fund.
Ordinarily includes non-concessional contributions made from 1 July 2007.
A tax of 15 per cent on before-tax contributions
A term that means to transfer assets into a superannuation fund rather than contribute money
Contract for difference
A contract for difference or CFD is an agreement which allows you to make a profit or loss from fluctuations in the price of the underlying instrument.
A period of time in which you can get out of a contract for the purchase of goods or services, if you change your mind. The rules on cooling-off periods vary between states and territories. Details of a cooling-off period will be included in the contract, if the good or service has one.
An action taken by an entity for the purpose of giving an entitlement to holders of a class of the entity's securities
A debt security issued by a company to investors to raise money to finance its business activities. Sometime called fixed-income securities because the issuer promises to pay a specific amount of interest on a regular basis and repay the principle on a set date.
Corporate master trust
A publicly offered master trust targeted at larger employers, normally marketed through superannuation consultants, which may offer discounted fees and other optional services.
Corporate superannuation fund
A superannuation fund established for the benefit of employees of a particular company, or group of companies, that is directly managed by the company. A corporate superannuation fund is sometimes referred to as an "in-house" fund.
Where the trustee of a superannuation fund is a company. The directors of that company are trustee directors of the superannuation fund. A corporate trustee may be a professional trustee company, a separate company specifically established to take on the responsibilities of a particular fund or the company sponsoring an employer plan.
The strength of a linear relationship between two variables. In investing, highly correlated assets tend to move together in response to changes in market and economics conditions. Adding assets with low correlation to existing assets in a portfolio improves diversification.
The annual interest rate on a bond, paid by a bond issuer, relative to the face value of the bond.
A plastic card that gives you access to money the bank has agreed to lend you for a certain period of time.
A document that contains the details of a loan, including the term, interest rate, fees and charges, and repayments. Credit providers must provide you with a credit contract.
A file kept by a credit reporting agency that shows your credit history. Lenders access the information in your file to help them decide whether to lend to you. They can also record a default on your file if you make loan repayments late, or don't pay a utility bill. Every time you make an application for finance an entry is recorded on your file showing the lender you applied to, the type of finance, the amount and the date.
Anyone engaging in credit activities (for example, by providing credit or credit assistance to you) must give you a credit guide. A credit guide will contain information about the lender, such as their licence number and external dispute resolution (EDR) scheme membership. It will also include the sort of costs you might pay if you take a loan from the lender.
The maximum amount a bank will lend you under a loan or a credit contract.
The interest rate allocated to individual members' accounts after the deduction of all fees, costs and taxes. The crediting rate is based on the fund's actual earning rate, less any amounts paid into a reserving pool, after allowances for fund costs. If the trustee has a reserving (or smoothing) policy, the fund may build up a reserve asset pool by crediting a lower amount in years of high actual earnings and using this pool to credit a higher amount than expected in years of lower actual earnings. For retail superannuation funds, the performance reported in the media is usually always the crediting rate.
An assessment of the credit-worthiness of individuals and corporations, based on their borrowing and repayment history.
Credit report (credit reference)
A report that details your credit history, including every time you have applied for credit or defaulted on a repayment. It is held by a credit reporting agency and a lender must ask you for permission to get this report.
Credit reporting agency
An organisation that collects and sells credit information on individuals and companies.
Community-based financial institution owned by its members that offers traditional banking services like savings accounts and loans, listed on the APRA website as a credit union.
A person to whom you own money.
Critical information summary (CIS)
A document supplied by a telecommunications provider that contains information about what you will pay and what you will get for your money. The information is presented in the same way so you can easily compare one provider's price and service with others.
Super funds must calculate a crystallised segment as at 30 June 2007, representing certain ore-July 2007 benefit components. This calculation must be done by 30 June 2008.
The risk that the value of your investments will be affected by changes in foreign currency exchange rates.
An entity, usually a company, used by your super fund to hold assets on its behalf with the main benefit being administrative efficiency and closer monitoring of invested assets. It brings together the fund's investment portfolios, collects income, reports on asset values, and provides registered addresses of offshore investments and, if the trustees of a plan are individuals, eliminates the necessity to transfer ownership of assets to a new individual each time there is a change in the trustee.
On the death of a member, a payment from a super fund in the form in the form of a lump sum payment ( a superannuation lump sum death benefit) or income stream (a superannuation income stream death benefit).
Death benefits dependent
A spouse or child under the age of 18, and anyone (including adult children) who has an interdependency relationship with the member. Any other person who is financially dependent on a member is also treated as a dependent.
Death benefit pension
See superannuation income stream death benefit
Death benefit termination payment
A lump sum amount payable by an employer on a member's death. Contact the Australian Taxation Office for more information
Death and Disability Insurance
An insurance policy that provides death cover and disability insurance
The amount of money paid out to dependents or other beneficiaries on the death of the person covered.
A medium-term investment issued by a company where investors lend them money in exchange for a regular and fixed interest amount for the term of the investment. The invested funds (principal) are repaid at the end of the term (maturity) and are usually secured by tangible property. They may be offered at call or for a set period.
A plastic card that gives you access to your bank accounts via ATM and EFTPOS facilities.
A legal agreement for the repayment of unpaid debts that is less formal and intrusive than bankruptcy. The agreement is between you and all of your unsecured creditors and allows you to pay back your debts over an extended period of time at an amount per week you can afford.
When several loans are combined into one, with the aim of reducing repayments. Also known as loan consolidation.
Comprises cash and fixed interest investments. You lend money to an organisation in return for interest payments. The company you lent to now owns you or is indebted to you.
Debt to equity ratio
Total debt divided by total equity. A company's equity represents the amount of shareholder's funds.
The property owned by a deceased individual that can be inherited under a will. Most individuals also have other assets that they own or control that are dealt with on death outside will, e.g. joint property, life insurance or a family trust.
A borrowing facility that allows the borrower to operate a number of loan sub-accounts within a single loan contract.
Income that is based on rate of return that's assumed for an investment even when that rate isn't what the investment actually returns.
Rates used to determine deemed income when assessing eligibility for Centrelink entitlements against the Centrelink income test.
A set level of income for a single person or a couple at which the deeming rate increases to a higher percentage.
An amount of money that you may be charged if you fail to make a repayment when it is due on a loan or credit card.
Since 1 July 2005, the super fund where an employer's super contributions must go, if an employee doesn't choose a fund.
Default Investment Option
Where a superannuation fund offers member investment choice, the default option is the option in which members' contributions and accrued balance are invested if the member does not actually elect a specific option.
Cash or fixed interest investments that are generally low risk and less volatile than growth investments.
Deferred establishment fee
A fee charged by a lender when a loan is paid off before a set period has elapsed e.g. 3 years. Also known as an exit fee. It's to cover the costs the lender incurred in setting up the loan.
A debt that can be paid off at some time in the future.
Defined benefit fund (Plan)
Where a member's retirement benefit is calculated using a formula relating years of employer service, or fund membership, and average salary during the years prior to retirement (e.g. a retiring member may receive 15 per cent of final average salary for each year of membership). As a result, end benefits do not strictly depend on investment returns as the employer-sponsor carries the long-term investment risk and so may have a greater say in how the fund invests the money than is the case in accumulation funds.
Defined benefit pension
A term-certain (such as life expectancy) pension or lifetime pension that's payable from a super fund.
Defined contribution fund
See accumulation fund
The process by which individuals or businesses reduce the relative size of their assets (debt) to equity.
The rate of change of a warrant price with respect to a change in the price of the underlying instrument.
Department of Veterans' Affairs (DVA) Cards
Concession cards available to recipients of the Age Service Pension. DVA cards entitle recipients to discounted prescriptions and in some cases, free medical care.
See death benefits dependant and dependant under the superannuation laws.
Dependant under the superannuation laws
A spouse, or child of any age, or anyone who has an interdependency relationship with the member. Any other person who is financially dependent on a member is also treated as a dependant. adult children, however, aren't considered dependants under the tax laws (see death benefits dependants).
Can be used in place of a deposit when a buyer exchanges contracts on a property. It guarantees that the buyer will pay the full deposit by an agreed date.
A decrease in the value of an asset
An instrument which derives its value from the value of an underlying instrument (such as shares, share price indices, fixed interest securities, commodities, currencies etc.). Warrants and options are types of derivatives.
A formal written decision of the Superannuation Complaints Tribunal
A payment collection method that allows loan or service providers to draw money from your bank account on a regular basis.
Refers to permanent or temporary, short or long term sickness or incapacity. The definition spectrum ranges from a person's inability to perform their normal occupation to an inability to perform each and every duty of any occupation for which they are qualified by education, training or experience. The definition applied to an individual case depends on the type of disability and the insurance policy terms and conditions. The permanent disablement definition is usually more strict than temporary disablement, meaning there are more requirements and it is more difficult to prove permanent disability than temporary disability. Superannuation and tax legislation also define 'disablement'. The tax legislation definition is used to determine whether benefits receive concessional tax treatment on payment.
Disability insurance (or disability cover)
An insurance product that pays the policyholder a lump sum or income stream if he becomes disabled
The document prepared by the warrant issuer which is dispatched to prospective subscribers of a warrant series. Disclosure documents are also known as either a product disclosure statement (PDS) or an offering circular.
Discretionary investment option
An investment option where the individual investor selects the underlying investment product or investment manager.
A way to resolve issues instead of going to court. All Australian Financial Services (AFS) licensees, banks and other credit providers must belong to a dispute resolution scheme
Refers to when investments are spread across a number of individual assets, classes of assets, countries or investment managers. The objective of diversification is to reduce total overall risk.
A payment made by a company to its shareholders. The payment is a share of the profits of the company and is based on the number of shares a person holds. A franked dividend consists of profits the company has already paid tax on.
A financial ratio that measures how much a company pays out in dividends each year relative to its share price.
Division 293 tax
An extra 15% tax on the super contributions of high income earners. This tax is charged if your income plus your concessional super contributions are above $250,000. There are different tax rules for members of defined benefit super funds. More details are available on the Australian Tax Office website. Find out more about tax and super.
DIY super fund (self managed superannuation fund or small APRA fund)
A super fund with four or fewer members
Dollar cost averaging
A technique that consists of regularly placing a fixed sum of money into the same investment. By doing this, investors will always by purchasing units at an average cost which is lower than the average unit price over the entire period.
The currency issued for use in a particular jurisdiction. For example, this would be Australian dollar for Australia.
A longstanding but declining practice in Australia, where some retirees spend their super payout as quickly as possible and them claim the Age Pension.
Early termination fee
A fee which may be applied if a loan is repaid earlier than the stated term.
Earnings per share (EPS)
A financial ratio calculated by dividing the company's earnings (profits) by the number of shares on issue. The higher the EPS, the more a share is potentially worth. See also price equity ratio.
The rate of investment return achieved by a superannuation fund before the deduction of fees and taxes. Also called yield, return, return on investment, rate of return. The earnings rate can be expressed either before tax, (i.e. based on gross earnings) or after tax (i.e. on net earnings).
Effective interest rate
An annual interest rate that takes into account the effect of compound interest and fees. Also known as an effective yield or the annual percentage rate (APR).
EFTPOS (electronic funds transfer at point of sale)
EFTPOS is an Australian network for processing credit cards, debit cards and charge card payments at the 'point of sale'. EFTPOS also allows users of the system to withdraw cash at the time of purchasing a product or service through the merchant's EFTPOS terminal. This function is known as 'debit card cashback' in many other countries.
Eligible termination payment (ETP)
Generally a lump sum payment from a superannuation fund or RSA or an employer.to an employee when he/she ceases employment.
Eligible rollover fund
A special super fund that looks after benefits for 'lost' members
Eligible service period
Applicable to pre-July 2007 benefits. The period of time that a person is a member of a super fund and, in some cases, the membership period of other super funds.
Countries outside the mainstream western and more successful Asian economies that are rapidly industrialising but remain volatile
Employer share scheme
An employer scheme that gives employees shares, or the opportunity to purchase shares, in the company, sometimes at a discount to market rates. Shares may be offered as part of an employee's remuneration or bonus, or through a loan or salary sacrifice arrangement.
An employer who contributes to a super fund via an arrangement between the employer and the trustee board of the fund.
A superannuation fund created by an employer or group of employers for the benefit of employees. Employer sponsored superannuation funds include corporate funds, government funds and industry funds.
Enduring power of attorney
Like an ordinary Power of Attorney (PoA), an enduring power of attorney authorises your nominated representative to make property and financial decisions for you. Unlike an ordinary PoA, an enduring PoA continues to have effect if you become mentally incapacitated at a later date.
A financial ratio calculated by dividing the company's earnings (profits) by the number of shares on issue. The higher the EPS, the more a share is potentially worth. See also price equity ratio.
An equity is part ownership of a company. Equities are also known as shares or stocks. Shareholders are entitled to dividends which represent their portion of the company's profits.
The value of an asset such as your house or property, less any money owing on it.
Equity access loan
A loan that allows people with equity in their homes to use that equity to borrow for investment. Investors can nominate a portion of the credit limit in their home loan (the available equity) as security for a margin loan. The maintenance of separate home loan and margin loan accounts helps keeps the borrower's tax position simple.
An investment where you buy and hold shares in a company or property from which you expect to receive income and capital gains.
A way of accessing the equity in your home to provide you with additional funds in retirement
A holding account designed to receive the super benefits of lost members and those with low account balances that are no longer receiving contributions.
A one-off fee which may apply to set up a personal or other loan.
A term that means any assets that a person owns
An investment where assets are selected based upon some ethical, environmental or social criterion.
An ETP will receive concessional tax treatment up to the ETP cap amount. The amount in excess of the ETP cap amount will be taxed at the top marginal tax rate.
Type of exercise style which allows the holder to exercise the warrant only on expiry day.
In relation to an insurance contract, it is the amount of an insurance claim that consumers have to pay. The amount is specified in the insurance policy.
Excess contributions tax
Penalty tax applicable when an individual exceeds the concessional contributions cap or the non-concessional contributions cap. The penalty tax is imposed on the individual rather than the super fund, although the tax can be deducted from the individual's super account.
The price at which the currency of one country can be exchanged for the currency of another
Exchange traded fund
A managed fund or unit trust that is quoted and traded on a stock exchange such as the ASX. ETFs generally seek to mimic the performance of a specific index, such as the S&P/ASX 200 index, a currency, such as the USD, or a commodity, such as gold.
Exchange traded options (or ETOs)
Options which are bought and sold in the options market operated by ASX.
Exchange-traded treasury bond (eTB)
A type of Australian Government Bond quoted and traded on the Australian Securities Exchange that is a medium-to long-term debt security with a fixed face value ($100) and a fixed annual interest rate.
Exchange-traded treasury indexed bond (eTIB)
A type of Australian Government Bond quoted and traded on the Australian Securities Exchange. It is a medium to long-term debt security with a fixed interest rate but a face value that is adjusted for movements in the Consumer Price Index (CPI).
Anything that is not included in a mobile phone plan for a regular monthly payment.
In relation to an insurance contract, it is something that is specifically not covered under the insurance policy. Depending on the type of policy these may include specific events, illnesses or pre-existing conditions.
When a lack of market liquidity causes a gap between the price at which you place a trading order, and the price you receive. This can be a risk when trading certain complex products such as contracts for difference (CFD) and foreign exchange (FX) contracts.
A person specified in a will, or appointed, to administer the will.
An amount based on the pension's purchase price and the life expectancy of the person receiving the income stream. This amount isn't counted when assessing whether a person satisfies the Centrelink Income Test
The action taken by the holder of a call option if he/she wishes to purchase the underlying foreign currency or by the holder of a put option if he/she wishes to sell the underlying foreign currency
The price at which the call or put foreign currency option can be purchased (if a call option) or sold (if a put option). Also referred to as 'strike price'
A charge levied on a member's benefit when all or part is withdrawn from a superannuation fund or RSA. Exit fees, also called redemption fees or charges, vary substantially between funds.
External manager model
Some infrastructure assets are operated by external managers, often investment banks. This approach has been criticised for adding to the cost and complexity of the investment.
A person with a duty to act in the best interests of another person, e.g. and executor of a deceased estate must act in the best interests of the beneficiaries and in accordance with the terms of the will of the deceased.
Assets that people invest in, and that a value can be place on. They're dividend into broad categories called assets classes.
Financial Information Service (FIS)
A not for profit financial education and information service that's available to anyone.
Financial Services Guide (FSG)
A document that can assist you in deciding whether to use the services of an adviser. The documents explains what services the adviser offers, how she operates, how the advisers gets paid (including any commissions), how she deals with customer complaints, and any interests, associations or relationships that might influence the advice the advisers gives.
Financial Services Reform Act 2001 (FSR Act)
Ac Act of Parliament that created tougher licencing requirements and increased disclosure required by advisers and product providers such as financial organisations
Fixed Interest Investments
Relatively low-risk investments that are effectively like term deposits, but not necessarily as secure. A person gives money to a bank, company or Government and, in return, it promises to pay the person a certain amount at set periods and repay the original amount after an agreed period of time. These investments can traded before they're due to be repaid.
Fixed Model Portfolio Weighting
When the SMA provider makes trades during rebalancing to ensure the proportions of the personal portfolio, attribute to each model portfolio, remain as originally selected.
Floating Model Portfolio Weighting
When the model portfolios perform differently from each other, relative to the proportion of their personal portfolio, and move (float) away from the model portfolio weights that were originally selected and are not adjusted by the SMA provider.
Forex / FX
An abbreviation of 'foreign exchange'
Forward Exchange Contract
An agreement to exchange one currency for another currency on an agreed date (for any date other than the 'spot' date)
The interest rate differential between two currencies expressed in exchange rate points. The forward points are added or subtracted from the spot rate to give the forward or outright rate.
The rate at which foreign exchange contract is struck today for settlement at a specified future date.
The contract undertaken at the forward rate as specified above.
Australia's dividend imputation system allows companies to attach franking credits to dividends in proportion to the amount of company tax already paid in the earnings. A fully franked dividend means that the dividend is paid out of earnings on which the full 30 per cent company tax rate has been paid. Investors can claim a credit for the company tax paid before paying income tax on the dividend income.
Pre-paid tax on franked dividends from shares. This pre-paid tax can count towards any other tax that a super fund has to pay, reducing any tax payable on concessional contributions or capital gains.
Items such as cars, low-interest loans and car parking, this individual may include in salary packages
Fringe Benefits Tax
One of those Johnny-come-lately taxes that the Australian Government introduced to claw back taxes lost due to workers reducing the income tax they paid by packaging fringe benefits.
Where a member is entitled to the full benefit accrued in their name in a superannuation fund.
Pooled investment product
A person having a say over what type of superannuation fund he can join. Fund choice is different from investment choice, which means a person has a say over where a fund invests his super.
The currency that a business prepares its accounts in, This may not be the domestic currency of the country which the business is mainly based in.
Fund of Fund Investment Option
An investment option where the investor selects a general risk profile but the super fund or master trust provider selects the underlying investments from a range of products managed by external investment managers. Can also be referred to as multi-manager options.
An organisation that specialises in the investment of a portfolio of assets on behalf of individuals and organisations, subject to the investor's guidelines. Also referred.to as an investment manager.
The proportion of the market value of the security that the debt represents, expressed as a percentage. Lenders apply a maximum gearing, or loan to valuation, ration to margin loans, depending on the volatility of the securities in the portfolio.
Genuine Redundancy Payment
A payment that represents the amount that exceeds what the person who has been made redundant would have received had he voluntarily resigned in other circumstances
Genuine Redundancy Tax-Free Amounts
The amounts of the genuine redundancy payment that an individual can receive tax-free
The total value of all the goods and services produced within a country's borders.
A list of complex definitions made up by superannuation experts to confuse their customers.
A company that has the greatest market share in a particular industry without having monopoly. A gorilla usually has greater leeway in its decisions. For example, it may charge a higher price for its products without fear of losing too much business.
These documents set out the rights and obligations of product providers and unit holders and include:
- scheme constitutions and compliance plans for managed investment schemes
- insurance policies for investment life insurance products
- governing rules of the fund, including the trust deed, for superannuation funds.
Statements made in PDSs and other documents relating to the product need to be consistent with statements in the governing documents.
See Trust Deed
Government Superannuation Plan
A fund run for government employees. Similar to corporate funds except the members are public servants.
Income before any tax is deducted
Group Life Insurance
Insurance arranged for a group associated in some way (e.g. superannuation fund members), for whom certain assumptions about an average state of health can be made. Premiums are often cheaper for each individual in the group than if the person had arranged their own insurance. Most funds acquire group life insurance for each member up to certain levels (the automatic cover limit) without having to provide evidence of insurability or good health.
Assets having the potential to achieve capital growth over the medium to long term; generally regarded as shares and property.
Growth Investment Manager
An Investment manager that picks stocks in which to invest where prices are likely to move with the market and economic trends. Sometimes referred to as 'momentum managers'.
See balanced Option
See term allocated pensions.
Guaranteed Payment Period
A period of time that another person can continue to receive income payments, or a lump sum, after the person originally receiving the income stream dies.
A hedging transaction is one which protects as asset or liability against a fluctuation in the market.
An investment fund that invests into financial instruments not normally available to mainstream investors, e.g. derivatives and options, and trades on these tactically and strategically. Reflecting these approaches, hedge funds generally do not follow normal benchmarks.
When an investor transfers an existing stock holding into the SMA and fixed this holding at a level of their choice . When the investor's personal portfolio is rebalanced, the nominated stock holding is maintained at, or above, the selected level. This is often used to protect tax parcels.
Home equity loan
A loan that allows people equity in their homes to borrow against that equity for personal or investment purposes. Investors may also be able to nominate a portion of the equity in their home (the availability equity) as security for a margin loan. The maintenance of separate home loan and margin loan accounts helps keep the borrower's tax position simple.
An extension of traditional asset-consulting services where investment advice and funds management are combined into the one service. Effectively, this allows a superannuation fund to delegate the role of selecting investment managers to the asset consultant. It is an extension of a super fund outsourcing its administration function.
The cash flow of an asset. Usually paid to the owner on a regular basis and may represent a large part of the return (as in the case of bonds) or a smaller part.(as in the case of equities).
Independent reviews can be undertaken by parties that are not directly involved in the unit pricing functions. For example, independent review may be undertaken by internal audit, the compliance unit, the risk management unit, external auditors, actuaries or by the other external advisers, depending on the circumstances. Product providers must decide who is the appropriate entity to undertake the independent review, based on the circumstances and taking account of legal obligations.
A method of adjusting thresholds or prices by linking them to a certain measure such as inflation or a rise in wages. The aim of indexation is to reflect amounts in today's dollars.
An income levels or rates or amounts that are adjusted annually in line with increases in average weekly earnings or inflation or another measure.
Indexed Income Stream
See indexed pension
Indexed Investment Management
When your super fund's investment managers try to match, or replicate the performance of the investment markets. E.g. if the Australian share market returns 10 per cent, an indexed investment manager should have earned 10 per cent. The main reason for using an indexed investment manager is that their fees can be lower.
An income stream that increases in line with inflation or increases in average weekly earnings.
Individually managed account (IMA)
A managed account where the professional investment manager manages investment portfolios and implements different investment decisions across the accounts based on the personal circumstances and objectives of each investor.
A multi-employer superannuation fund, in many cases established by parties.to an industrial Award, e.g. employer associations and unions, usually covering a specific industry or range of industries.
Revenue is linked to inflation. In many infrastructure contracts the government or regulator allows the operator to increase prices on tolls in line with changes in the cost of living.
The physical assets which society requires to facilitate its orderly operation. These come under the heading of transport, energy, water, communications and social.
Inherited Tax Liabilities
When an investor purchases a pooled unitised fund, they also buy the realised and unrealised gains. Accordingly, a portion of the price may be attributed to previously derived Capital Gains Tax (CGT) income. The investor would then be entitled to a distribution of this income which be taxable.
In-house Superannuation Fund
The same as a corporate superannuation fund.
Institute of managed account providers. The industry body representing managed account professionals set up in 2006.
An option with intrinsic value. A call option is in the money if its strike price is below the current spot price. A put option is in the money if its strike price is above the current spot price.
A non-cash contribution to a super fund; for example, transferring the title of an office into the name of the fund's trustees or transferring ownership of shares
When an investor's existing stocks are transferred into their personal portfolio.
A loan that can be drawn down in regular instalments, usually monthly, and used to accompany a savings plan.
Financial protection against a possible future event with the terms of coverage specified in the policy document. Insurance normally offers protection for individuals, families and other dependents in the case of death and disability where the protection is against injury or ill-health which would prevent normal employment.
A close personal relationship between two people who live together, where one or both provides for the financial and domestic support, and care of the other. This definition can include parent-child relationship that don't fall within the definition of death benefits dependant, and sibling relationships.
From an SMA perspective, this is the stock picking strategy of the model provider
A trust established by deed during the lifetime of the settlor, in contrast to a testamentary trust.
A person who dies without leaving a valid will dies interstate. The person's deceased state is managed by an administrator.
The value of a security, justified by factors such as assets, dividends, earnings, and management quality.
An invalidity payments known as concessional component or a post-June 1994
Where members of a superannuation fund are able to choose from a range of investment options how their money is invested. Same as Member Investment Choice.
An organisation that invests a portfolio of assets on behalf of other individuals and organisations, subject to the guidelines set out by the individual or organisation. Also referred to as a fund manager.
One of the investment choices from which the member may choose to invest if the fund offers investment choice.
The full list of a super fund's investment choices.
The act of purchasing an asset or an interest in an asset.
A feature of a fund through which a member has a say over where his super fund invests his super
Investment Income Tax
Tax payable by a super fund on assessable income, including a fund's investment income
An investment specialist hired by a trustee to invest super money on the trustee's behalf.
A formal plan identifying the super fund's financial goals (investment objectives) and the fund member's tolerance for risk and the investment time horizon
The amount a person pays to subscribe for a warrant. May also be called 'premium'.
Integrated Trading System is the name of the computerised trading system used by ASX to trade equities, options, warrants, interest rare securities and some futures.
A person who is unable to give a legally enforceable promise is under a legal disability. This includes persons under the age of 18 and individuals who are insane or otherwise mentally impaired.
Legal Personal Representative
Also referred to as a personal representative, executor or administrator.
An adviser that has satisfied specified criteria and certain standards under the Financial Services Reform Act 2001. Only licensed advisers can call themselves a 'financial adviser' or a 'financial planner.'
A statistically based average of the number of years a person is expected to live. Statisticians can measure life expectancy at birth or during a person's life.
Life Expectancy Age
You're expected to live to this age, on average
Life Expectancy Pension
A guaranteed income stream for a fixed period representing a person's life expectancy
Life Income Streams
See lifetime pension
A beneficial interest in the income of a testamentary trust for the lifetime of the beneficiary. The capital of the trust passes to the remainder man on the death of the tenant. Likewise, a life estate is an interest in the land that terminates on the death of the beneficiary.
See death cover
A beneficiary who has a life estate; also known as life beneficiary
Lifetime Indexed Pension
An indexed pension payable for life. Many lifetime pensions also pay a reversionary pension.
Lifetime Pension (or lifetime annuity)
A guaranteed income stream for a person's lifetime and maybe the spouse's lifetime too.
Publicly traded assets, such as trusts and companies whose securities are listed on stock exchanges, provide investors with the ability to enter and exit the investment relatively easily.
Loan to Valuation Ratio (LVR)
Also called 'loan to value ratio' this is the amount you can borrow as a percentage of the value of the security. For example, a loan of $50,000 secured by a portfolio valued at $50,000 would be 50 per cent LVR.
Long and Short Positions
When you buy a financial instrument, you have a long position. When you sell a financial instrument, you have a short position.
The chance of a person out living their retirement savings.
A member whom a super fund is unable to contact.
Lost Member Register
A central register keeping records of lost members and their super accounts
Lower Transitional ETP Cap
An ETP paid under transitional rules receive the maximum concessional tax treatment available up to this cap. Note that an ETP is not a payment from a superannuation fund. Contact the Australian Taxation Office for more information.
Low Income Tax Offset (LITO)
A tax offset available to all taxpayers on lower incomes
A lifetime limit that applies to superannuation lump sum paid from a taxed benefit after the age of 55 but before the age 60.
In superannuation terms, the benefit taken as a single payment, rather than taken as a pension or annuity.
Lump Sum Reasonable Benefit Limit (RBL)
The limit on the amount of concessionally taxed benefits an individual is able to receive over their lifetime from one or more superannuation funds, RSAs or other sources when taken as a lump sum. In an attempt to discourage the taking of lump sum benefits, the lump sum RBL is lower than the pension RBL.
Lump Sum Tax
The tax payable on a lump sum superannuation payout. There can be as many as six components of an Eligible Termination Payment for tax purposes.
Focuses on the major aggregates, such as gross domestic product and the balance of payments, and the links between them in the context of the national economy.
Managed Discretionary Account (MDA)
An umbrella term used to refer to any services where the clients hand in their money or other assets to the MDA operator and give that operator the discretion to managed those assets on their behalf.
A financial product where the money of many investors is pooled into one investment vehicle and the assets are invested according to a single investment strategy.
Management Expense Ratio (MER)
The expenses of a fund (e.g. investment, administration, trusteeship) as a proportion of the fund's asset value.
The fee charged by a superannuation fund's operator(s) for investment management, administration, trusteeship.
Managed Investment Scheme (MIS)
Also known as 'managed funds', 'pooled investments' or 'collective investments'. It is a scheme where money is pooled together with that of other investors in exchange for an interest in the scheme.
The difference between buying and selling rates/prices of investments, e.g. units in an investment trust.
A margin call occurs when the loan to valuation ratio exceeds the borrowing limit and the buffer. When the markets fall and asset values go down the LVR will go up. Once a margin call is made the investor must take action to restore the account to its appropriate LVR.
Marginal Rate of Tax
The rate of income tax payable on a person's top portion of income earned.
Mark to Market
A valuation method where, at then end of each trading day, security holders re-price their assets in line with the market value. Listed assets immediately reflect current valuations on their securities . Unlisted assets are re-valued on a periodic basis
Market-Linked Income Stream
See term allocated pension
See term -allocated pension
A firm quotes both a buy and a sell price in a financial instrument or commodity, hoping to make a profit on the turn or the bid/offer spread.
Master Trust (Fund)
A trust, which allows a large number of unconnected individuals and/or companies to operate their superannuation arrangements under a common trust deed. This allows economies of scale in the operation of the trust resulting in cheaper costs for individual investors and/or companies. Life companies, banks and other specialist superannuation service providers promote master trusts. Effectively a retail super fund with member investment choice.
Maximum Deductible Contribution (MDC)
The maximum amount of superannuation contributions that can be made by a self-employed person, or an employer for an employee, to a complying superannuation fund or RSA and claimed as a tax deduction.
Maximum Superannuation Contribution Base
An indexed limit, up to which an employer can contribute 9 per cent of an employee's salary. If a person's income for Superannuation Guarantee purposes exceeds this base, the employer makes contributions on the basis of the maximum superannuation contribution basis of the maximum superannuation contribution base.
Means Testing (or means test)
An assessment of any resources a person may have available to support himself. In relation to the Age Pension, whether a person already has enough and resources to look after himself.
A tax that the Federal Government imposes on Australian taxpayers to help fund the country's public health system.
Medicare Levy Threshold (seniors)
If the income of an individual of Age Pension Age is under the this threshold, the individual is not required to pay the Medicare levy
Major developments with huge and potentially enduring implications globally, like urbanisation, climate change, the scarcity of fossil fuels and the burgeoning population growth
Member Contributions Statement (MCS)
A special form your super fund must lodge with the Australian Taxation Office and the details all contributions to the fund.
Member Investment Choice
Where members of a superannuation fund are able to choose from a range of investment options how their money is invested. Same as Investment Choice.
Member Protection Rule
A requirement that super fund must follow and that means super fund's annual administration fee can't be greater than the investment return credited to a member's account, if the account balance is less than $1,000
An Annual summary of a member's benefit in the super fund, including how much money is in the member's super account and contributions made during the year.
Minimum Trade Size
When securities in a personal portfolio are only traded if the trade size meets the specified size. It is the smallest trade that can be done in a personal portfolio.
An investment strategy selected by the adviser and managed by a model portfolio manager or an ongoing basis.
Model Portfolio Manager
The manager of the model portfolio (referred to as the model portfolio adviser, model provider or the fund manager).
MSCI World Index
A benchmark for international equity performance typically used by traditional equity fund managers.
Multi manager Investment Option
An investment option where the monies are assigned to several investment managers. See also Fund by Fund Investment Option.
National Information Centre
The official name for unemployment benefits
The income produced by the investment is less than the interest on the borrowing used to purchase the investment.
When buys and sells are matched and off-set against each other. Can be done at both portfolio and scheme level.
No Negative Equity Guarantee
A mortgage contract guarantee that the debt is never going to exceed the value of your home
The rate of return in simple monetary terms with no allowance for inflation. For example, in a year where the investment return was 10 per cent and inflation.8 per cent, the nominal return is 10 per cent but the real (after inflation) return is 2 per cent.
Nominated Beneficiary (or nominated beneficiaries)
A person (or persons) whom a fund member nominates to receive the super if the member dies. Anyone nominated must be a dependent or a person's legal representative
Generally a financial adviser, or professional adviser, who will provide all instructions to the SMA provider on behalf of the investor
As opposed to beneficial ownership. Usually when the clients invests in shares within a unitised managed fund.
A type of nomination that helps the trustee to decide who is eligible for a death benefit, especially when a lot of people may claim to be financially dependent.
Non-Commutable Income Streams
An income that can't be converted into a lump sum payment
Non-Commutable Lifetime Pension
A lifetime pension (or annuity) that can't be converted to a lump sum amount
Where a superannuation fund fails to meet prescribed Government standards and conditions, and as a result does not qualify for concessional tax treatment. Funds can be non-complying either through choice or because there are operational shortcomings.
After-tax contributions including spouse contributions and contributions made under the Super Co-contribution Scheme
Non-Concessional Contributions Cap
The level of non-concessional contributions that can be made each year before penalty tax is payable.
Individuals who aren't dependants and, ordinarily, can only receive a death benefit when first paid to the deceased member's estate
A benefit that is either restricted or unrestricted.
Anyone entering Australia on an eligible temporary resident visa
Super funds such as industry funds, public sector funds and corporate funds
The rate at which a dealer is willing to sell the base currency
Ongoing Fees and Charges
Same as management fee.
A calculator that's accessed via the internet, and that can be used to work out how much a person is likely to need in retirement, or how much life insurance he may need, or how much a fund charges in fees.
Any transaction that has not been settled by a physical payment or is matched by an equal and opposite deal for the same value date.
Market dynamics providing investors with significant upside opportunity and limited downside risk that focus more on the long-term than today's trading fundamentals
Options are similar to an insurance contract. For a premium, the purchaser can insure against an adverse exchange rate. If the insured exchange rate moves adversely for the purchase, the purchase can exercise the option. If the exchange rate moves favourably, the purchase can abandon the option and take advantage of the favourable exchange rate. The buyer has the right but not the obligation to exercise the option.
Out-of-the Money Option
An option with no intrinsic value, i.e. a call whose strike price is above the current spot price or a put whose strike price is below the current spot price. Its value is solely time related.
A foreign exchange transaction involving either the purchase or the sale of a currency for settlement at a future date. It is the same as a forward contract.
The forward rate of a foreign exchange deal based on the spot price plus or minus the forward point, which represents the difference in interest rates between the two currencies.
Over the Counter ("OTC") means that you do not trade in a CFD through an exchange or market; rather, it is a transaction between you and the CFD provider.
Passive Investment Management
Same as indexed investment management.
Product disclosure statement
A regular periodic payment paid to an individual who meets certain qualifying conditions. A variety of Government, social security or private pensions exist.
The frequency and nature of reviews are at the discretion of the product provider, based on the circumstances and taking account of legal obligations.
An investor's account into which their investments are allocated within an SMA. A personal portfolio is generally constructed using a selection of model portfolios and a compulsory cash component.
The Superannuation Industry (Supervision) legislation requires a policy committee where a public offer fund or sub-fund has more than 49 members, or where five or more members of a public offer fund (or sub-fund) with 5 to 49 members request the formation of such a committee. A policy committee consists of equal numbers of employer and member representatives who facilitate communication between the members and the trustee and provides an avenue for members' enquiries and views on the fund's operation.
Any form of investment in which a number of individuals, e.g. members of a superannuation fund, place their money with a professional investment manager to manage the total fund on their behalf but produce a return to them individually. Pooled investments may also comprise unit trusts, cash management trusts, friendly society bonds and shares.
The amount paid for the option transaction. It is usually expressed in currency terms or as a percentage of foreign exchange rate
Lenders allow investors to pay their interest a year in advance. Useful for tax purposes.
The regulatory requirement that certain superannuation benefits be maintained either in a superannuation fund or RSA until permanent retirement on or after the member reaches a certain age, the preservation age. Early release of preserved amounts may occur if the person dies, becomes disabled or gains APRA or trustee approval for early release.
The issue of the warrants by the warrants issuer to subscribers in the primary market.
Unit priced products include:
- investment life insurance policies
- allocated annuity and pension products provided by life insurance companies
- superannuation funds
- wholesale or retail managed investment schemes
- pooled superannuation trusts
Providers of unit priced products include life companies offering investment life products and superannuation, allocated annuity and pension products, superannuation trustees offering registered managed investment schemes and other fund managers offering managed investment schemes or pooled superannuation trusts.
A grant of probate is a certificate granted by the Supreme Court of a State or Territory that a will has been proved valid and that authority to administer the deceased estate has been granted to the executor.
A broad asset class encompassing office buildings, factories, shopping centres and other developments. Super funds can either invest in these investments directly or indirectly, via listed property
The rules that apply to benefit payments- an income stream or lump sum must reflect the proportion of tax-free and taxable components that make up super benefit
Lenders guarantee up to 100 per cent protection of the secured assets. There is an interest rate premium for this guarantee/insurance.
Public Offer Fund
Anyone can join in a public offer fund. Financial organisations, such as banks and insurance companies, usually market these types of funds to the public in the form of retail superannuation funds. Many industry funds are no public offer funds.
Public Sector Employees
A term that covers employees working in local government, the Commonwealth and State public services, public healthcare, and in Australia's public universities
Public Sector Fund
A superannuation fund for public sector employees
An option to sell a foreign currency amount at a specified price at any time between now and the expiration of the option contract.
Real Rate of Return
The rate of return of an investment, minus the inflation rate (usually taken as the consumer price index) over the same period. For example, if an investment produces a 10 per cent return but inflation is 8 per cent; the real return is 2 per cent.
Reasonable Benefit Limit (RBL) - abolished 1 July 2007
The maximum concessionally taxed superannuation benefit a person can receive over their lifetime. Superannuation benefits greater than an individual's RBL were taxed at the highest marginal rate. RBLs for pensions were more generous than for lump sums to encourage retirees to finance retirement via an income stream rather than cash. RBLs were abolished from 1 July 2007.
The process where a client's actual holdings are compared to the updated model portfolios and changed accordingly.
Usually each business day before the market opens
A loan that can be drawn down in regular instalments, usually monthly, and used to accompany a savings plan into managed funds.
Regulated Superannuation Fund
Under the Superannuation Industry (Supervision) legislation, a fund is eligible to receive tax concessions only if it is classed as a Regulated Superannuation Fund and meets specified operational standards. A Regulated Superannuation Fund is one which: elects to comply with SIS legislation, has either a corporate trustee or pays retirement benefits as pensions, is an indefinitely continuing superannuation, pension, provident or benefit fund.
Many infrastructure companies operate in regulated markets. There is a risk that the actions of a regulator or the intervention of government will adversely affect the revenue of the business and therefore the price of the stock.
A person (or persons) who has a beneficial interest in the capital of a testamentary trust, while another beneficiary has a life interest. The property in the testamentary trust vests in or passes to the remainder man on death of the life tenant.
The amount that remains after the debts of the deceased have been paid and amounts have been set aside to satisfy any distributions of particular assets or legacies specified by the deceased.
Residual Capital Value
A remaining balance of an income stream
The licensed entity or body that operates a managed investment schemes or separately managed account.
A person's benefit may include this type of benefit if she was a super fund member before 1 July 1999. A person can cash this benefit when she resigns from an employer who is contributing to her super fund.
Restricted Non-Preserved Benefit
This benefit is restricted until a person leaves his job. A person's super may include this type of benefit if he was a super fund member before 1 July 1999.
A loan that allows a person to borrow against the equity in his home. The repayment of accumulated interest and the original loan amount is deferred until the property is sold, which can be after the person dies.
Reversionary Income Stream
An income stream payable to someone else, for example a spouse or children, if a member dies.
Retail Super Fund
A super fund established by a bank, life office, financial planning dealer group, or fund management group. Retail super funds are usually open to the public. Corporate master trusts are a special type of retail super fund.
Retirement Income Policy (RIP)
A three-pronged Government Strategy intended to save Australia from a funding crisis triggered by Australia's ageing population
Retirement Income Stream
An income stream that produces regular income payments during a person's retirement
Retirement Savings Account (RSA)
A bank - or similar - account established for holding superannuation savings. RSAs are similar to regular bank accounts but have restrictions upon withdrawals like regular superannuation funds. RSAs invest super savings into bank deposits and so usually pay lower rates of interest than regular super funds, but their fees are lower than regular super funds.
The level of risk a person is willing to tolerate
The transfer of all or part of an ETP into a complying superannuation fund, RSA or is used to purchase an annuity from a life company or registered organisation.
An exemption that permits a business owner to defer any capital gains tax payable on any capital gain from the sale of a business asset, provided that the business owner purchases another active business asset with the proceeds of the sale.
Where the settlement of a deal is rolled forward to another value date based on the interest rate differential of the two currencies e.g. next day.
A more precise term for describing the practice of reducing your taxable income by making superannuation contributions from before -tax salary (salary sacrificing)
An arrangement between an employer and an employee which involves the employee giving up part of their pre-tax salary in exchange for the employer providing an alternative benefit, such as superannuation contributions.
Same -Sex Couple
Two people of the same gender who are in a relationship. For the purpose of superannuation law, a live-in relationship between two women or two men.
The trading of warrants on ITS after the primary issue
A web site that a person can only access with a password
The value of the cash or investments the borrower provides the lender as security for the loan.
Self-Managed Superannuation Fund
A small super fund that's regulated by the Australian Taxation Office
When securities are sold at the client's discretion
Senior Australian Tax Offset (SATO)
A tax offset that's available for retirees who are of Age Pensions age or older, or of Service Pension Age.
Senior Concession Allowance
A six monthly tax free payment to Commonwealth Seniors Health Card Holders to help with regular bills such as electricity and gas, rates and motor vehicle registration fees.
Separately Managed Account (SMA)
A portfolio made up of securities that are beneficially owned by the individual investors and managed by professional managers or model portfolio managers. Unlike investing in a managed fund, an SMA investor can add, delete or "lock" shares in an SMA.
See Age Service Pension
Service Pension Age
The age at which the Service Pension is payable to war veterans, which is five years earlier than the Age Pension. Currently, the Service Pension age is 60 for men and between 58.5 and 60 for women.
Where a product provider decides to outsource certain functions, those functions are performed by a service provider.
A complete resource for employers looking to outsource and monitor their superannuation. It comprises a suite of services, including the Selecting Super Handbook and website and extends to monitoring of outsourced superannuation arrangements, market assessment reports, tender management and consumer report cards.
Actual physical exchange of one currency for another between dealer and client
The person who provides an initial gift of cash or property to create an inter vivos trust.
A unit o ownership in a company that entitles a person to a share of the profits in the form of dividends and the benefit of any increase in the share price because of the strong performance of the company.
Small APRA Fund
A DIY super fund that's regulated by Australian Prudential Regulation Authority
Small Super Fund
A fund with four or fewer members, more popularly known as a DIY super fund.
Sole Purpose Test
The legal test used to judge a true superannuation fund. It requires that superannuation funds be maintained for the sole purpose of providing benefits on reaching retirement or preservation age, or to members' dependents or estate on the member's death before retirement. Other benefits approved as 'ancillary purposes' under the sole purpose test include the termination of employment and disablement due to ill-health. In order for a superannuation fund to qualify as a Regulated Superannuation Fund, it must comply with the sole purpose test.
A spouse can be a married or de factor partner of the opposite sex, or former spouse. A spouse can also be a partner of the same sex.
The arrangement to exchange currencies in two working days. For example, if a currency is sold 'spot' on Monday, it will be exchanged on Wednesday with the counterparty.
The difference between bid and offer prices
Statement of Advice (SOA)
The written advice your licensed adviser gives you, the reasons for providing you with advice and how much your adviser gets paid, including any adviser commissions.
Stop loss Order
An order to buy or sell when a particular price is reached either above or below the price that prevailed when the order was given
refer to 'exercise price'
Investment managers are often said to have a "style" that describes their approach to investing. E.g. they are active or passive, or they invest in growth or value companies. Style can be very subjective and should be interpreted with caution as some styles can change as the markets change. However, investment managers who stick to their style are highly regarded.
Socially Responsible Investing
See Ethical Investment.
When an investor substitutes an individual security with another ASX listed security, cash, or pro-rates across the other securities in the personal portfolio.
Super Cycle of Credit
Refers to the multi-decade era of breakneck growth in credit, financial instruments and sophistication which the credit crunch brought to an end late in 2007.
Super Co-contribution Scheme
The Federal Government makes matching super contributions on behalf of Australian employees who make voluntary contributions and earn less than $60,342 year (for the 2008/09 year).
A system where money is placed in a savings fund to provide for a person's retirement.
Superannuation Complaints Tribunal (SCT)
An independent body established to investigate complaints about super funds that can't be resolved by internal complaints processes.
Superannuation Death Benefit
Benefit payable from a superannuation fund upon a member's death.
Superannuation Fund (Plan) (Scheme)
In regulatory terms, a superannuation fund is defined as 'a fund which is indefinitely continuing, and is a provident, benefit, superannuation or retirement fund; or is a public sector superannuation scheme'. It is usually governed by a trust deed and administered for the primary purpose of providing benefits for members on retirement, or alternatively, on resignation, death, disablement or other specified event. Funds complying with legislative requirements are eligible for taxation concessions.
Superannuation Guarantee (SG)
A prescribed minimum level of superannuation contributions that an employer must provide for employees. The Superannuation Guarantee (Administration) Act 1992 prescribes the levels. If the employer does not meet their obligations they incur a penalty charge, known as the SGC in addition to having to pay the appropriate contributions.
Superannuation Guarantee Charge (SGC)
A charge imposed under the Superannuation Guarantee Charge Act 1992.on employers who do not meet the minimum Superannuation Guarantee requirements for their employees.
Superannuation Income Stream
A series of regular payments from a superannuation fund
Superannuation Income Stream Death Benefit
An income stream payable from a super fund on a member's death
Superannuation Industry (Supervision) Act 1993 (SIS)
Legislation providing prudential, i.e. financial and governance, standards for superannuation funds administered by three regulators: the ATO, Australian Securities Investments Commission (ASIC) and the Australian Prudential Regulation Authority (APRA).
Superannuation Lump Sum
A lump sum payment received from a super fund
Superannuation Lump Sum Death Benefit
A lump sum payable from a member's super account upon the member's death
A surcharge (tax) of up to 15 per cent imposed on certain superannuation contributions, specified rollover amounts, and termination payments. The surcharge applies to people whose annual incomes exceed prescribed limits. The effect of the surcharge is that for high income earners their level of contributions tax can be doubled from 15 per cent to 30 per cent.
This product enables a super fund to search the Lost Members Register on a member's behalf.
The online search facility of the Australian Office that allows members to locate their lost super.
The taxable portion of a superannuation benefit. An individual pays tax on this component if she receives a benefit under the age of 60 or receives an untaxed benefit.
The benefits paid from a source where tax has been paid on the concessional contributions and earnings of the fund.
A person's taxable component is usually a 'taxed' element, unless the person belongs to a public sector fund. See untaxed benefit.
A term that means a person is able to take advantage of much lower rates of tax than he ordinarily pays on income.
Tax File Number
A unique number issued by the Australian Taxation Office to identify individuals and organisation for tracking the payment of tax and to improve the efficiency of data collection.
Tax Free Component
The portion of the benefit that's tax-free. Ordinarily includes non-concessional contributions and certain pre-July 2007 benefits.
An offset that reduces the tax payable on taxable income
Term Allocated Pension
An allocated pension type investment but with elements of the tax and social security benefits and concessions of complying pensions. Also referred to as growth pensions.
Term Certain Pension (or term-certain annuity)
A guaranteed income stream for a set period of time, between one year and 25 years. Recipients can choose to receive a residual capital value.
An arrangement where a person deposits a certain amount of money with a bank or financial institution for a set period of time and an agreed rate of interest.
Term of Issue
The rights, conditions and obligations of the warrant issuer and the warrant holder. These terms are contained in the disclosure document.
A trust created by will or established by operation of a statute in respect of assets of a deceased estate.
A gift or money or specific property made by the testator in a valid will.
The person who makes a will.
The amount of money option buyers are willing to pay, above the intrinsic value, for an option in the anticipation that, over time, a change in the foreign currency value will cause the option to increase in value. In general, an option premium is the sum of time value and intrinsic value. Any amount by which an option premium exceeds the option's intrinsic value can be considered as time value.
Total and Permanent Disability Insurance
An insurance product that pays the policyholder a lump sum or income stream if she becomes permanently disabled.
The money you deposited in your account plus dealings conducted on your account and the positions you hold. The total equity balance is used to establish if there is a requirement for additional margin to be paid in respect to your account.
Total Expense Ration
A bundled measure of your super fund's total fees and expenses expressed as a percentage of your account balance.
Transition-To-Retirement Income Stream
A non-commutable income stream that's available before retirement
Stop-loss positions can be adjusted as the price of the underlying security rises. If the shares are worth $30 when they are purchased the stop loss might be set at $25. If the share price goes up to $40 the stop loss can be adjusted up to $35.
A document setting out the rules for the establishment and operation of a fund. Provisions cover the appointment and removal of trustees, membership rules, receiving and investing contributions, trustee discretionary powers, and benefit payments.
A person or company (corporate trustee) appointed under the terms of the trust deed to hold the trust assets for the beneficiaries and to ensure operation in accordance with the trust deed. Trustees owe a fiduciary duty to the beneficiaries. Superannuation trustees must also comply with certain legislative duties.
The trustee's responsibility to members of a super fund.
Electronic record of share ownership; original share certificate is not issued.
When there is not enough insurance to cover the value of the insured property.
An institution that supports the issue of securities by a client and agrees to buy any securities not bought by investors.
Banks that agree to purchase any unsold notes at the issue and future rollover dates
Relates to unfolded public sector arrangements, which means the Government hasn't coughed up the cash for super contributions
Unified managed account (UMA)
Comprehensive portfolios of individual separate accounts and packaged products, such as mutual funds and exchange-traded funds (ETFs), with a complete asset allocation in a single account.
The value of a company or investment expressed as a single unit. A unit is similar to a company share.
A form of pooled investment trust governed by a trust deed has trustees and is promoted and managed by professional investment managers. Investors purchase units whose value is set either by the market (if the trust is listed) or by the trustee who adjust price according to valuations (if it is unlisted). Unit trusts can include property trusts, equity trusts, cash management trusts.
This type of benefit isn't subject to preservation and can be accessed at any time, subject to the rules of the super fund.
Untaxed benefit (or untaxed element)
A benefit that hasn't been subject to contribution tax or earnings tax. The benefit is subject to a higher rate of tax than a taxed benefit.
A super fund where the Government hasn't yet paid in the cash for the additional employer contributions it has agreed to pay on behalf of employees.
Untaxed plan cap
The recipient of the untaxed benefit can receive concessional tax treatment of superannuation lump sum benefits up to this limit.
Denotes the redistribution of population from rural to urban settlements, notably within emerging economies like China and India that have a burgeoning consumer class.
Unlisted mortgage scheme
A mortgage scheme that is not listed on a public market, such as the Australian Securities Exchange.
Unlisted property trust
A property trust that is not listed on a public market, such as the Australian Securities Exchange.
A loan for which no asset has been used as security. The interest rate is usually higher than for a secured loan as there is a higher risk to the lender of not getting their money back.
A type of fixed interest investment issued by a company whereby it promises to pay regular interest payments and return the capital at the end of the investment term. There is no security offered for the investment.
An unexpected call or visit by an unknown person, trying to sell something.
A sub-class of infrastructure assets that includes power, water, sewerage and communications facilities.
Settlement date of a spit or forward deal
Value investment manager
Investment managers that pick stocks on the basis of the company's inherent potential value. In a low return market value investment managers often outperform because they better identify quality companies.
The extent of fluctuation of security prices, interest rates, exchange rates and so on, It is usually calculated by measuring standard deviation, which is the degree of variations of returns around the mean return . Increasing levels of dispersion around the mean lead to higher standard deviation, indicating a higher level of risk.
All contributions other than compulsory superannuation contributions. Individuals under the age of 75 can make voluntary contributions to a complying superannuation fund.
A six letter code assigned to a warrant by ASX to identify it on ITS.
The institution that issues the warrant
All warrants with the same of issue and underlying instrument and having the same warrant issuer, exercise price, expiry date and settlement procedure. each warrant series has a separate warrant code.
Also called "badging". When a party, independent to the SMA provider or responsible entity (such a dealer group, acccountant or broker) badges the SMA services as their own services (eg the third party can choose their own name for their services, the model portfolios they wish they wish to offer, and fee structure).
Wholesale investment manager
An investment manager that focuses upon large investments, often from super funds. Wholesale investment managers generally are specialised companies restricted to customers with very large amounts of money to invest.
The Last Will and Testament is a formal statement of a testator's wishes as to the disposition of assets of the testator on death. To be valid and effective it must comply with strict conditions.
An investment consulting relationship for the management of a client's funds by one or more money managers that bills all fees and commissions within one comprehensive fee.