Directories Glossary

This glossary is provided to users of the Directory to clarify the context for the information provided by the firms. In the field of investments there are other definitions that firms sometimes apply to these terms, particularly when referring to size of assets. For purposes of the Directory, we have asked firms to use these definitions when providing information.  This glossary is dynamic, and will be updated periodically.  Let us know if you want to see more applicable definitions.

Profile Term Definitions

AUA (Assets Under Advisement):  AUA is the estimated dollar value of all assets held by the clients of the firm, for which the firm provides advice or consultation (e.g., investable assets as well as privately held real estate or other illiquid or personal use assets). The firm may or may not invest the assets or be involved in the decision-making process for all of these assets. Rather, the firm will use the information to provide a holistic viewpoint for the integrated planning for all the clients’ assets.

AUM (Assets Under Management):  AUM is usually a subset of AUA, and refers to the dollar value of assets being managed by the firm. This term can be used in lieu of revenue or sales as a measure of the firm’s size. Assets included in AUM are the investable assets of the clients for which the firm makes decisions or has varying degrees of discretion, and for which the firm may design and/or implement an investment policy and asset allocation.

Open Architecture:  An investment platform that provides to investors fund manager and strategy options from external sources. The term implies that the firm has no bias regarding which manager or strategy is chosen by the investor.  

True open architecture means a firm is not offering any proprietary products.  There are some firms that offer an open architecture platform as an option and also offer, but don’t require investment in, proprietary products. These latter firms offer a hybrid open architecture approach to investing for their clients. All firms designated as Leading Wealth Advisor offer an open architecture option.

Questions to ask a wealth advisor to ascertain options available to you include:

  •  Do you provide totally independent, objective advice for your clients?
  •  Does your firm have captive investment products?
  • Are these products required to be used by family office clients?
  • What is the cost for such products?

Family Client: This term generally refers to the number of family groups the firm is serving. Each family group could be comprised of several households within the same family. Some firms look at each adult household or account as a separate family client – such distinction can depend on the size and complexity of the family, how assets are held, etc.

Client Attrition Rate: The rate at which a client terminates its relationship with a company over a given period of time.  The Directory profiles contain the 3-year average client attrition rate.

Compound Annual Growth Rate (CAGR): The year over year growth rate applied to a numerical figure over a multiple-year peridod. The formula for calculating CAGR is:  [((Ending Value/Beginning Value)^(1/# of years)) – 1].

Industry Degrees, Designations and Certifications

CAIA:  Chartered Alternative Investments Analyst

CEBS:  Certified Employee Benefit Specialist

CFA:  Chartered Financial Analyst

CFP:  Certified Financial Planner

CIMA:  Certified Investment Management Analyst

CPA:  Certified Public Accountant

CPM:  Chartered Portfolio Manager

CRC:  Certified Retirement Counselor

CTFA:  Certified Trust and Financial Advisor

JD:  Juris Doctor

LLM:  Master in Law