Plain-English glossary
The terms you’ll run into when choosing an advisor, explained simply.
- Accepting new clients
- The advisor says they’re currently taking on new clients.
- Account minimum
- The smallest amount a firm usually works with. Many will make exceptions, so it’s worth asking.
- Advisor and broker
- Registered both to give fee-based advice and to sell products for commissions. Ask which applies to each of your accounts.
- Assets under management
- The total client money a firm manages. Bigger isn’t automatically better; it mostly tells you the firm’s size.
- AUM
- Assets under management: the total value of client money a firm manages.
- broker-dealer
- A firm that buys and sells investments for customers, usually paid by commissions. Many advisors are also registered with one.
- CFA charterholder
- Chartered Financial Analysts pass three demanding exams on investment analysis and portfolio management.
- CFP® professional
- CERTIFIED FINANCIAL PLANNER™ professionals complete college-level coursework, pass a comprehensive exam, have years of experience, and commit to a fiduciary standard.
- ChFC®
- Chartered Financial Consultants complete in-depth coursework in planning, insurance, and retirement.
- Claimed profile
- The advisor verified their identity and added details like a bio and specialties. Their official record stays exactly as filed.
- CPA / PFS
- A CPA with the Personal Financial Specialist credential, combining tax expertise with financial planning.
- CRD
- Central Registration Depository number: the ID regulators assign to every registered firm and individual. Use it to look them up on official sites.
- custodian
- The bank or brokerage that actually holds your money and investments, separate from your advisor. You get statements directly from them.
- dually registered
- Registered both as an investment advisor and as a broker, so they can offer fee-based advice and commission-based products.
- Featured
- Premium members who pay to be highlighted in searches within 10 miles of their office or in their city. Featured is always labeled and never changes an advisor’s record.
- Fee-only
- You pay the advisor directly, by a percentage of assets, a flat fee, or by the hour. The firm doesn’t report earning commissions on products it recommends.
- Fees negotiable
- The firm says its fees can be negotiated. Asking for a lower rate on larger balances is normal.
- Fiduciary
- Legally required to put your interests first when giving investment advice, and to disclose conflicts of interest. Registered investment advisors owe this duty to clients.
- Financial planning
- Help with your whole financial picture: budgeting, saving, retirement, taxes, insurance, and estate questions, often delivered as a written plan.
- Form CRS
- A short relationship summary firms give everyday investors, covering services, fees, and how they’re paid. Ask for it before you hire.
- How they’re paid
- How the firm says it charges clients in its official filings. Always ask for your total yearly cost in dollars.
- How we compare experience
- We compare each advisor’s years in the industry with other advisors nearby and at their firm, and highlight where they stand out.
- Investment management
- The firm chooses and manages investments for you, usually adjusting them over time.
- Licenses
- Exams an advisor has passed. The Series 65 or 66 allows fee-based advice; the Series 7 allows selling securities.
- Manager selection
- The firm picks outside investment managers for part of your money. Ask what those managers cost on top of the firm’s fee.
- Retirement plans for businesses
- Help for employers setting up or running a 401(k) or similar plan for their employees.
- Series 24
- The general securities principal exam, for people who supervise other brokers.
- Series 6
- A license to sell mutual funds, variable annuities, and similar packaged products.
- Series 63
- The state securities law exam required to act as a broker in most states.
- Series 65
- The investment advisor law exam, required in most states to give investment advice for a fee.
- Series 66
- A combined exam that, together with the Series 7, qualifies someone as both a broker and an investment advisor representative.
- Series 7
- The general securities exam, which allows someone to buy and sell most types of investments for clients as a broker.
- SIE
- Securities Industry Essentials: an introductory exam taken alongside other licenses.
- States licensed
- Advisors must be registered in each state where they have clients. More states can mean they work with clients who move or meet virtually.
- Typical client size
- An estimate of how much a typical individual client has with the firm, based on what the firm reports.
- Where your money is held
- An independent firm, called a custodian, holds your investments. Your advisor manages them, but statements come straight from the custodian.
- wrap fee
- One bundled fee that covers advice and trading costs. Simple to budget, though it can cost more than paying separately if you rarely trade.
Educational example only, not financial advice. Real costs and results vary.