The world of financial services can feel cluttered with terms, titles, and acronyms that seem designed to make complicated things even more complicated. Here at Retirement Income Solutions, we strive to help you meet your financial and life goals—all the while using as little jargon as possible.

But since some technical terms are needed to explain our work and your choices, we’ve laid them all out here. If you have follow-up questions about any of this, we’re here to help answer them! You can email or call us or stop in to our Ann Arbor office.

A guide to key financial planning terms

Annuity: An annuity is a contract between you and an insurance company that is designed to meet retirement and other long-range goals, under which you make a lump-sum payment or series of payments. In return, the insurer agrees to make periodic payments to you beginning immediately or at some future date.

Broker: An individual or firm that acts as an intermediary between a client and a securities exchange to execute financial orders (like buying stocks or other securities) for clients. They are often compensated via commissions or fees. In the case of full-service brokers, they may offer financial advice and additional services like research. There are also discount brokers, which allow clients to trade at a lower cost, but without any personalized service. 

Custodian: A specialized financial institution that maintains clients’ funds and securities for safekeeping. The qualified custodians are also required to send account statements to clients on a quarterly basis. Pershing, TIAA and Fidelity are three examples of custodians we often work with at RIS.

Exchange traded funds (ETFs): Like mutual funds, investment companies offer investors a way to pool their money in a fund that invests in stocks, bonds, or other assets or some combination of these investments. ETFs are priced intraday at market prices on the national securities exchange. 

Fee-only: Advisors who only get paid by their clients, who receive no commissions from non-client, third party sources.  If you’re looking for truly independent advice that puts your interests first, you’ll want a fee-only advisor. RIS is an independent fee-only investment advisor. 

Fiduciary: Is a person or organization who acts on behalf of their clients and is legally and ethically obligated to always act in their clients’ best interests. RIS is an Investment Advisor, and we have a fiduciary duty to our clients.

Financial planning: The process of looking at your long-term financial goals, creating a strategy to try and help achieve them, and managing and adjusting that strategy over time. A good financial planning process will include looking at your net worth, cash flow, current holdings, estate plan, tax plan, retirement strategy, professional and personal goals, and risk tolerance. 

Mutual Funds:  An open-end investment company that pools money from many investors and invests the funds in stocks, bonds, short-term money market instruments, other securities, or some combination of these investments. They are priced at the close of each business day at NAV (net asset value) from the fund.

Proactive: A way of managing your finances that tries to get ahead of what’s to come by looking at the current market environment and past market data to try and help grow and preserve your investments. The RIS approach to asset management is trying to be proactive versus reactive.  We can actively adjust your portfolio as opportunities arise or reduce risk when we believe circumstances are less favorable. 

Wealth management: The process of managing an individual’s investments designed to help grow and protect their wealth. The RIS approach to wealth management is proactive, diversified, analytical, and dynamic. It includes strategies to try and help grow your wealth during your career and as you transition to retirement, and ways to try and help preserve it during your retirement years.


The above information has been obtained from sources we believe to be reliable; however, no assurance can be made as to the accuracy. Nothing contained herein should be construed as offering specific investment advice, legal, accounting and/or tax advice.  

No investment strategy or investment plan, including a well-diversified portfolio rebalanced periodically, can guarantee a return or that losses will not occur.