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We’ve made a point of saying that we are willing to explain terminologies and jargon to you. The explanation and clarification are part of the service that our independent financial advisers provide for our clients. As proof of this commitment, you can browse our glossary.
Below, you’ll find a variety of standard terms in the financial scene. We’ve also included the simplest but most accurate definitions, so you can understand what we mean when we use them.
Account-Based Allocated Pension – this is a source of regular income, typically in the form of a superannuation fund. You can nominate the amount of revenue that suits you, but you need to take a minimum pension amount. The government determines the amount.
AMP Accredited Financial Planner – these are financial planners that have completed an AMP accreditation program. The assessment is completed annually.
Assessable Income – this is your gross income. It is inclusive of salary, dividends, interest, and rent before any deductions are factored. Capital gains, Eligible Termination Payments, and other amounts are not classified under this, except in specific scenarios.
Assets – these are the resources owned by a company, organization or individual. Assets may be tangible, such as cash and equipment, or intangible, such as patents or intellectual property.
Balanced Fund – this portfolio invests across different types of assets. Assets may be both domestic and international and designed to provide long-term capital growth and income.
Diversification – this is the process of spreading across classes of assets, managers, and distribution. The intent is to control risk, avoiding “putting all your eggs in one basket.” The result is a portfolio with greater variation and resiliency.
Inflation – this is an increase in the volume of money and credit. It is measured by comparing the availability of goods and services purchased with that money. The result of inflation is a continuing rise in general price levels.
Investor Profile (or Risk Profile) – this is a client’s or manager’s willingness to accept a risk. Specifically, it is the desire to take the risk of losing money in the present in exchange for higher returns over a prolonged period.
Long-term Investment – this investment matures over a five-year period or is otherwise made over a period of five or more years.
Superannuation – this is a payment or pension for a person retiring from work. Superannuation may also be used to refer to accumulating contributions to a super fund, both by employers and employees.