Broker-dealer
A person (legal entity) engaged in the business of effecting transactions in securities for the accounts of others and for its own accounts.
ETF
Exchange Traded Fund: A fund that tracks an index/ basket of individual securities, and can be bought and sold like a security on the stock exchange. Typically, expense ratios are lower than mutual funds’ and ETFs do not have the sales loads that mutual funds often do.
GIPS
Global Investment Performance Standards: Set of ethical standards followed by some RIA firms when reporting performance. In order to claim compliance, an RIA firm must be verified by an authorized third-party firm.
HNW
High net worth: Typically a High Net Worth individual is characterized by having at least $1MM in assets. The SEC defines such a person as an individual with $750,000 of invested assets with an advisor, or an individual who is reasonably believed to have $1.5MM in assets.
VHNW
Very High Net Worth: Typically a Very High Net Worth individual, typically owns between $5-50MM. (Another term frequently used is UHNW, or Ultra High Net Worth individual; such a person is characterized as owning more than $50MM in assets.)
IAR
Investment advisor representative: An employee of an RIA firm registered to provide investment advice, and to trade in client accounts on their behalf.
LPOA
Limited power of attorney: The authorization required for an RIA firm to manage a client’s portfolio, including trading and fee-deduction.
MLP
Master limited partnership: Publicly-traded, tax-advantaged real estate, natural resource, or commodity firm that pays distributions to the limited partner unit-holders.
RIA
Registered investment advisor: An investment advisory firm registered with the SEC, or a state’s securities agency.