Understand the terms we use

Financial Advice Terms

Acquisition Costs

The fixed and variable costs of acquiring new business, including commissions and similar distribution costs, and costs of accepting, issuing and initially recording policies.

Learn More...
Back to Top
Acquisition Date

The date on which the acquirer obtains control of the acquiree.

Learn More...
Back to Top
Actuarial Gains & Losses

These comprise: (a) Experience adjustments (the effects of differences between the previous actuarial assumptions and what has actually occurred); and (b) the effects of changes in actuarial assumptions.

Learn More...
Back to Top
Claims Expense

The charge to the statement of comprehensive income for the reporting period and represents the sum of claims settled and claims management expenses relating to claims incurred in the period and the movement in the gross outstanding claims liability in th

Learn More...
Back to Top
Commutation

The process of converting a pension or annuity into a lump sum

Learn More...
Back to Top
Complying Pension or Annuity

A series of payments received over the remaining lifetime of a pensioner. The pension may be paid by a super fund or life insurance company. The pension must meet a number of legislated requirements.

Learn More...
Back to Top
Concessional (Personal) contributions

In relation to super, personal contributions are payments made to a fund from an individual's after-tax salary or other financial source, e.g. investment dividends, inheritance. Also referred to as 'after-tax contributions' or 'non-concessional contributi

Learn More...
Back to Top
Consumer Price Index (CPI)*

CPI is the measurement measure of inflation across the country, which allows comparisons of the relative cost of living over a period of time.

Learn More...
Back to Top
Current Asset

An entity shall classify an asset as current when: (a) it expects to realise the asset, or intends to sell or consume it, in its normal operating cycle; ...

Learn More...
Back to Top
Deferred annuity

A type of annuity (retirement income product) that starts payment of income at a later date, such as when an investors turns 65. Deferred annuities can only accept Eligible Termination Payments such as lump sums from super funds

Learn More...
Back to Top
Diversification

The process of distributing funds across a number of asset classes to reduce the impact that volatility in one asset class, sector or market will have on the performance of your overall portfolio of assets.

Learn More...
Back to Top
Dividend imputation

In order that company earnings are not taxed twice, investors who receive dividend payments may also receive a tax or imputation credit for the tax already paid by the company.

Learn More...
Back to Top
Dollar Cost Averaging

The practice of investing amounts of money at regular intervals, regardless of whether the securities markets are declining or rising.

Learn More...
Back to Top
Economically Recoverable Reserves

The estimated quantity of product in an area of interest that can be expected to be profitably extracted, processed and sold under current and foreseeable economic conditions.

Learn More...
Back to Top
Eligible Termination Payment (ETP)

A lump sum payment made to an individual by an employer (or from a super fund/approved deposit fund) as a result of retrenchment, retirement, resignation, death or disablement. ETPs are subject to concessional tax rates.

Learn More...
Back to Top
Entity

Any legal, administrative, or fiduciary arrangement, organisational structure or other party (including a person) having the capacity to deploy scarce resources in order to achieve objectives.

Learn More...
Back to Top
Equity

A term for shares. Also a general word used to describe a shareholding or ownership in a company. Can also refer to the value of your capital invested in an asse

Learn More...
Back to Top
Exit Fee

A fee payable by investors when withdrawing money from or closing certain investment options.

Learn More...
Back to Top
Float

In relation to companies, it refers to the decision to list on a stock exchange and offer shares to the public. For currencies, it is the decision to let market forces set the exchange rates.

Learn More...
Back to Top
Foreign Currency

A currency other than the functional currency of the entity.

Learn More...
Back to Top
Franked dividends

Company/share dividends paid out of profits on which the company has already paid tax. The investor is then entitled to a reduction in income tax for that amount (imputation credit).

Learn More...
Back to Top
Futures

A contract that obligates the owner to buy or sell a certain quantity and quality of an underlying asset at a predetermined price at a future date

Learn More...
Back to Top
Gearing

Describes the practice of borrowing to invest. Gearing is usually expressed as a ratio of the borrowed amount divided by the total amount invested.

Learn More...
Back to Top
Growth asset allocation

An asset alloation or fund that has a higher proportion of assets in investments such as shares and property that are expected to deliver most of their returns through capital appreciation

Learn More...
Back to Top
Hedging

An investment position taken to counteract the potential risk from another investment.

Learn More...
Back to Top
Insurance Bond

A single premium investment product, issued by life insurance companies or friendly societies, which operates in the same manner as a unit trust except that the return is provided to the investor net of tax.

Learn More...
Back to Top
Listed company

A company whose shares can be bought and sold on a stock exchange.

Learn More...
Back to Top
Market-linked fund

A pooled investment fund (also see 'pooled fund') that is valued according to movements in the market to which it is linked.

Learn More...
Back to Top
Non-Concessional Contribution

Contributions to a super fund or retirement savings account made after 30 June 1983 for which no tax deductions were allowable. The non concessional contributions component of an Eligible Termination Payment is not taxable

Learn More...
Back to Top
Ordinary Shares

Securities or fully paid shares that represent an ownership interest in a company. They carry voting rights (for the shareowner) and entitle the shareholder to receive dividends if the company makes a profit and decides to pay dividends.

Learn More...
Back to Top
Overweight

Taking a greater exposure to one investment market or security compared with a benchmark or neutral position. The opposite of underweight.

Learn More...
Back to Top
Portability

The ability to transfer benefits from one investment or super fund to another.

Learn More...
Back to Top
Quartile

A statistical measure dividing a sample into four numerically equal groups. Thus top quartile in a funds management context means the top 25 per cent of the fund managers in a particular category or asset class.

Learn More...
Back to Top
Rollover

Transfer of super money from one approved super fund to another.

Learn More...
Back to Top
Self Managed Superannuation Fund (SMSF)

A self managed super fund (SMSF) is a form of retirement savings, controlled by members who act as trustees of their own fund.

Learn More...
Back to Top
Underlying investments or securities

In relation to managed investments, this normally means the investments selected by the investment manager. In the case of master trusts, underlying investments are the investments offered through menu options for an investor to select. The menu may inclu

Learn More...
Back to Top
Underweight

Taking on a smaller exposure to one investment market or security compared with a benchmark or neutral position. The opposite of overweight.

Learn More...
Back to Top
Unit Trust

A pooled investment structure set up under a trust deed where investors buy units in a trust that is managed by the fund manager on behalf of the investors. The value of units is set either by the market (if a listed trust) or by the trustees (if unlisted

Learn More...
Back to Top
Volatility

The extent to which total returns from an investment fluctuate over time.

Learn More...
Back to Top
Yield

The income earned from an investment expressed as a percentage.

Learn More...
Back to Top