Terminology You Should Know When Meeting With Your Financial Advisor


When you are working with a financial advisor you will often hear buzz words that they will throw at you when you are planning your financial future. This type of confusing jargon should not intimidate you. Rather these words are just a part of the industry. Below you will find ten terms you should know to better prepare your understanding for your financial future.


This is a retirement savings plan that is sponsored by an employer. It allows the employee to save and invest a piece of their paycheck into an account before taxes are taken out. Taxes are not paid until the money and the amount is withdrawn from the account.

529 Plan

For families wishing to save for their children’s college funds, look into a 529 plan, which is sponsored by states, state agencies, and educational institutions that are authorized by Section 529 of the Internal Revenue Code. A 529 plan is a tax-advantage savings plan designed to encourage saving for future college cost.

Annual Report

An annual report is a comprehensive report on a company or individual’s financial activities throughout the preceding year. Annual reports tend to give information on the financial performances, assets and liabilities, profits and losses, expenses, revenue, and much more.


A commission is the money that a broker or advisor charges to a client for their advice and services.


Dividend is the money paid to a class of a company’s shareholders. A company pays this amount quarterly to its investors.

Earning Reports

This is something that can be found in the annual or quarterly report. Earning reports are the public company’s report cards that state the overall income of the company’s earnings, expenses, and net income.


A fiduciary is a trustee who is legally appointed to hold assets for someone. This person is able to manage the assets for the other person’s benefit.


A margin is when a client uses the broker’s credit to buy a security. The amount the client pays is the margin.

Net Worth

The net worth is the total assets minus the total outside liabilities of an individual or a company. This is used to talk about the value of the company or individual’s personal finance.


This is the overall work and investment your money is going into. This provides a variety of financial assets such as stocks, bonds, and cash equivalents.