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We are always aiming to support our clients with their understanding of complicated financial 

terms and continue to build our list of helpful explanations – please let us know if you have any 

suggestions or if you need further assistance. 


Any links provided in the explanations below will take you to a separate website, for which we 

are not responsible. The websites we have linked to are usually those belonging to the Financial 

Conduct Authority (FCA), MoneyHelper or other independent, free services. 


Asset allocation 

Asset allocation refers to the implementation of an investment strategy that allocates the 

different assets in an investment portfolio to categories such as stocks, bonds and cash, 

balancing risk versus reward. 


Asset management 

Asset management is the day-to-day management of an investment portfolio, which 

involves balancing costs, risks and opportunities to generate as much value as possible. 


Collective investment scheme (CIS) 

A collective investment scheme (CIS), sometimes known as a ‘pooled investment’, is a fund 

that usually has several people contributing to it. The fund manager of a CIS will invest 

investors’ money into assets, such as stocks, bonds or property. A CIS may be authorised UK 

schemes or ‘recognised’ schemes from other countries. If a CIS is not authorised or 

recognised it is considered an unregulated collective investment scheme (UCIS). 


Defined benefit (DB) pension 

A defined benefit (DB) pension, sometimes called a final salary pension, gives you a 

guaranteed lifetime income that usually increases each year to protect you against inflation. 

It may also continue being paid to your partner at a reduced rate when you die. See more 

about defined benefit pensions. 


Defined contribution (DC) pension 

These types of pensions can be either workplace pensions or private pension schemes. The 

amount of money individuals get when they retire depends on their contributions and their 

employers (if applicable), as well as investment returns and tax relief. See more on DC 

pension schemes at MoneyHelper. 

If you are over 50 you can also use MoneyHelper’s Pension Wise service. 


Discretionary investment management 

This is where buy and sell decisions are made by a portfolio manager, in this case 

Mattioli Woods, for your account. The term ‘discretionary’ refers to the fact that investment 

decisions are made at the portfolio manager’s discretion. 


Financial adviser 

Makes recommendations on what you should do with your finances. This may include 

investments, pensions, mortgages, insurance or planning for the future. You may also get 

advice if you are looking to manage any debt you have. A financial adviser should be 

authorised by the FCA through the financial services firm they work for. Read more about 

financial advice on MoneyHelper. 


Financial Conduct Authority (FCA) 

The Financial Conduct Authority (FCA) regulates the financial services industry in the UK. Its 

role includes protecting consumers, keeping the industry stable, and promoting healthy 

competition between financial service providers.* 


Financial Ombudsman Service 

The Financial Ombudsman Service is a free service that settles complaints between financial 

businesses and their customers. Visit the Financial Ombudsman. 


Financial Services Compensation Scheme (FSCS) 

The FSCS is an independent, free service that can step in to pay compensation if the financial 

firm you have used has gone out of business and cannot pay your claim. Visit the FSCS 

website for some information. 


Financial Services Register (FS/FS Register) 

The Financial Services Register is a record of the firms and individuals we authorise and the 

activities they have permissions for. This also includes any limitations. Find out more about 

the FS Register here. 


Firm reference number (FRN) 

The FCA use a 6-digit or 7-digit number to uniquely identify firms, and 6-digit Product 

Reference Numbers (PRNs) to identify funds. Use this number to search the Financial 

Services Register. 


Government bonds (gilts) 

Government bonds are a type of debt instrument where an investor lends money to the 

Government. Most pay a fixed level of interest for the duration of the bond and repay the 

initial lump sum to the investor when the bond matures. UK Government bonds are also 

known as gilts. 


High-net-worth individuals (HNWI) 

An individual who has either an annual income of at least £170,000 or has net assets in 

excess of £430,000 beyond their pension fund assets and private residence. 


Individual Savings Account (ISA) 

Individual Savings Accounts are savings accounts that allow you to save or invest without 

paying tax on any interest, dividends or profits. 


Interest rate 

Interest rate refers to the amount you earn on your savings, or the amount you pay back 

when you borrow money. 


Investment risk 

Investment risk is the risk of an investment falling in value, or that returns on that investment 

will differ from your expectations. 


Junior Investment Savings Accounts (JISA) 

Junior Investment Savings accounts are savings accounts opened by a parent or guardian in 

a child’s name, which work in the same was as normal ISAs. These savings can only be 

accessed by the child once they turn 18. There are two main types of JISAs – Junior Cash ISAs 

and Junior Stocks and Shares ISAs. 



MoneyHelper is a free service provided by the Money and Pensions Service. It offers 

impartial money and pensions guidance that is backed by government. 


Pension review or release scams 

You should be very wary of any scheme offering to help you release cash from your pension 

before you are 55, as it is almost certainly a scam. Find out how to protect yourself from 

pension scams. 


Pension unlocking 

Pension unlocking or pension liberation is a way of accessing money in your pension fund 

before you retire. Early access to a pension is rarely in your long-term financial interests and 

is often a scam. See more about the risks of pension unlocking on MoneyHelper, guidance 

that is backed by the Government. 



Phishing is when attackers attempt to trick you into doing ‘the wrong thing’, such as clicking 

a bad link in a text or email that will download malware, or direct you to a dodgy website. 

Read more about how to protect yourself from malicious communications. 



Sometimes things can go wrong, and we do not meet our usual high standards. In those 

instances, redress is the act of putting you back in the position you would have been had 

things not gone wrong. For example, if you have been given inappropriate advice about 

transferring out of a pension. 



In the UK, firms must be authorised and have permission to carry out financial activities. 

These activities are regulated by the Financial Conduct Authority. Read more about how the 

FCA regulates financial services. 



ScamSmart is an FCA campaign to help you avoid investment and pension scams. Visit 

ScamSmart to find out more. 



A trustee is an individual who is responsible for managing the assets that have been placed 

in a trust by a beneficiary. Learn more at MoneyHelper. 


Unit trust 

A unit trust works by pooling your money with other investors into one single fund. A unit 

trust has a fund manager whose job is to create a portfolio of investments in different asset 




Volatility is a measure of how much something fluctuates. In the investing world, volatility is 

a measure of an investment’s risk level. The higher the volatility, the higher the risk and the 

likelihood you could get back less than you invested. 


Wealth management 

Wealth management is a financial service provided to customers who have signed an 

agreement with a wealth management firm to have their money or investments managed. 

This is done on either a discretionary or advisory basis. 


Workplace pension 

A workplace pension is a way of saving for your retirement that is arranged by your 

employer. They can also be known as ‘occupational’, ‘works’, ‘company’ or ‘work-based’ 

pensions. Learn more at MoneyHelper.