Asset Class - A type of investment, such as stocks, bonds, real estate, or cash.

Capital - Cash or goods used to generate income, either by investing in a business or a different income property.

Certificant - Individuals who are currently certified by the CFP Board.

Client - A person, persons, or entity who engages a certificant and for whom professional services are rendered.  Where the services of the certificant are provided to an entity (corporation, trust, partnership, estate, etc.), the client is the entity acting through its legally authorized representative.

Compensation - Any non-trivial economic benefit, whether monetary or non-monetary, that a certificant or related party receives or is entitled to  receive for providing professional activities.

Conflict of Interest - When a certificant's financial, business, property and/or personal interests, relationships or circumstances reasonably may impair his/her ability to offer objective advice, recommendations or services.

Diversification - A portfolio strategy designed to reduce exposure to risk by combining a variety of investments, such as stocks, bonds, and real estate, which are unlikely to all move in the same direction.  The goal of diversification is to reduce the risk in a portfolio.

Fee-only - When the certificant's compensation from all of his or her client work comes exclusively from the clients in the form of fixed, flat, hourly, percentage or performance-based fees.

Fiduciary - One who acts in utmost good faith, in a manner he or she reasonably believes to be in the best interest of the client.

Investment Management - The process of managing money, including investments, budgeting, banking, and taxes; also called money management or asset management.

Market - A public place where buyers and sellers make transactions, directly or via intermediaries; also sometimes refers to the stock market.

Portfolio - A collection of investments all owned by the same individual or organization.  These investments often include stocks, which are investments in individual businesses; bonds, which are investments in debt that are designed to earn interest; and mutual funds, which are essentially pools of money from many investors.

Security - An investment instrument, other than an insurance policy or fixed annuity, issued by a corporation, governement, or other organization which offers evidence of debt or equity.

*For terms not listed here, we suggest: www.investorwords.com