Negotiating your way through all the terminology can be confusing. We've complied this glossary of selected terms and definitions to assist you better.
(RRSP) Registered Retirement Savings Plan A Canadian financial planning instrument that allows contributions to be used in income tax deductions. The hope is that this will encourage people to save for their retirement. (LIRAs) Locked-In Retirement Accounts A locked-in RRSP. To receive income from LIRA funds, the funds must be transferred to a life insurance company for the purchase of a life annuity, transferred to a pension plan, or used to purchase a Life Income Fund (LIF).
(RRIF) Registered Retirement Income Fund While RRSPs and LIRAs are used to save for retirement, the plans ending in "IF" are used during retirement to pay out retirement income. A RRIF is a continuation of your RRSP, and like an RRSP, the money in a RRIF is tax-sheltered until you withdraw it.
(LIF) Life Income Fund A non-annuity investment vehicle created specifically to access locked-in RRSP and pension plan savings to provide retirement income.
(GIC) Guaranteed Investment Certificates An interest-paying investment in which the investor commits for a specified term for a specified rate of interest, usually anywhere from one to five years. Usually issued by a trust company or other financial institution and covering a specific period.
Segregated Fund A type of annuity that is similar to a mutual fund. Segregated funds are an insurance product that guarantees a death or maturity benefit on the investment funds.
Mutual Fund A security that gives small investors access to a well-diversified portfolio of equities, bonds, and other securities. Each shareholder participates in the gain or loss of the fund. Shares are issued and can be redeemed as needed. The fund's net asset value (NAV) is determined each day. Each mutual fund portfolio is invested to match the objective stated in the prospectus.
(RESP) Registered Education Savings Plan A savings program for post-secondary education that earns tax-sheltered income. It is taxable when taken out by the beneficiary of the plan who is generally in a lower tax bracket, if in a tax bracket at all, at the time of applying the funds for further education.
(OAS) Old Age Security A pension payable to all persons age 65 of older, who meets both the income need and residency requirement in Canada. The OAS, GIS and SPA will be consolidated in 2001 and replaced with a new pension called the Senior's Benefit.
(CPP) Canada Pension Plan A federally run program (except in Quebec which has its own program) designed to provide monthly pensions to contributors in retirement, to disabled contributors and their children, and to the widows, widowers, and orphaned children of deceased contributors. Visit www.sdc.gc.ca/en/isp/cpp/cpptoc.shtml
(CFPTM) Certified Financial PlannerTM A Certified Financial Planner is an individual who is capable and qualified to offer objective, integrated and comprehensive financial advice to help individuals achieve their personal financial objectives. The Financial Planners Standards Council (FPSC) awards the internationally recognized CFP designation in Canada. CFP professionals must meet the FPSC's standards in education, experience, examination and ethics. CFP professionals must also have 30 hours of continuing education every year and agree to abide by the CFP Code of Ethics to renew their right to use the designation annually.
(CFP) Chartered Financial Planner One who has earned a general financial planning designation granted by The Canadian Institute of Financial Planning upon completion of an education program. The program was phased out in 1998.
(CH.F.C.) Chartered Financial Consultant A Chartered Financial Consultant is a financial advisor with advanced knowledge in wealth accumulation and retirement planning. CH. F.C. designates have passed advanced courses in financial planning and wealth accumulation granted by The Financial Advisors Association of Canada (ADVOCIS).
(CLU) Chartered Life Underwriter A financial advisor with advanced knowledge in life and health insurance and employee benefits. CLU designates have passed exams given by The Financial Advisors Association of Canada (ADVOCIS) and have been determined to be a financial planner with advanced knowledge in life and health insurance and employee benefits.
(RFP) Registered Financial Planner Designation awarded annually by the Institute of Advanced Financial Planners (IAFP) to its members who have met and maintained the professional standards as established by the Institute.
(PFC) Personal Financial Counselling and (PFP) Personal Financial Planning Courses and designations established by the Institute of Canadian Bankers (ICB) for bank employees. The PFC course train advisors to counsel clients who have standard financial planning objectives. PFP courses focus on estate planning and more complex financial planning arrangements.
(PFP) Personal Financial Planner A designation granted by the Institute of Canadian Bankers. It is earned upon successful completion of the Personal Financial Planning Program and the Institute's Designation Qualification Process.
(CA) Chartered Accountant The professional designation indicates one who has passed the requirements of his or her provincial institute of chartered accountants, which includes the Uniform Final Exam (UFE). CA's have extensive training in tax and other areas of financial management and must adhere to a code of conduct.
(CGA) Certified General Accountant A professional designation granted to individuals who have passed the educational and experience requirements of their provincial association. CGAs have extensive training in accounting, tax and financial management. They are required to adhere to a code of conduct and a mandatory continuing education program.
(CSC) Canadian Securities Course An educational program offered by the Canadian Securities Institute (CSI). An individual often requires this course program for a position in the financial services industry. It covers fixed income securities, equities, mutual funds, derivatives, etc. Visit www.csi.ca
(FPSC) Financial Planners Standards Council of Canada (FPSC) The Financial Planners Standards Council is the licensor of the CFP certification marks in Canada, the mark of the professional. Regulatory, resource, and professional development body. Visit www.cfp-ca.org
(ADVOCIS) Financial Advisors Association of Canada (formerly CAIFA) Advocis is the brand name of The Financial Advisors Association of Canada and represents thousands of professional advisors from coast to coast. Advocis members advise their clients on the short- and long-term financial needs of individuals, families, and owners of small and medium-sized businesses.
In September 2002, members of the Canadian Association of Insurance and Financial Advisors (CAIFA) and the Canadian Association of Financial Planners (CAFP) voted in favour of merging their two groups to create Advocis. Today, Advocis is Canada's largest association of professional financial advisors, with members in 50 Chapters across the country. Visit www.advocis.ca
(MFDA) Mutual Fund Dealers Association of Canada A self-regulatory organization (SRO) recognized by several provincial securities commissions including the Ontario Securities Commission. The MFDA is committed to building a regulatory regime that the financial services industry can be proud of and which the public can look to with confidence. Visit www.mfda.ca