Glossary
Financial Advisor Terms & Vocabulary
15 essential financial advisor terms with plain-English definitions: the vocabulary you’ll hear in training and on day one.
Key financial advisor vocabulary
These 15 terms come up constantly in financial advisor training, on the job and in interviews. Knowing them helps you follow instructions, document accurately and sound prepared.
- 401(k)
- Workplace retirement plan.
- 529 plan
- College savings plan.
- Asset allocation
- Mix of investments.
- AUM
- Assets under management.
- CFP
- Certified Financial Planner.
- Diversification
- Spreading risk.
- Estate plan
- Plan for assets after death.
- Fee-only
- Paid only by clients.
- Fiduciary
- Must act in the client’s best interest.
- Index fund
- Fund tracking a market index.
- IRA
- Individual retirement account.
- Rebalancing
- Resetting the mix.
- Risk tolerance
- Comfort with ups and downs.
- RMD
- Required minimum distribution.
- Roth
- After-tax retirement account.
Practice these terms
Test yourself with the free Financial Advisor practice test: it includes vocabulary questions built from this list. For a complete course, see Financial Advisor training.
Browse terms from every career in our career glossary.