Knowing and understanding the following financial terms will help you entertain a more effective communication with your financial advisor.
Financial planning: It is a process by which the foundations of financial activities are defined and projected, with the objective of minimizing risk and taking advantage of opportunities and resources.
Family Office (FO): These are organizations that are responsible for managing the investments and funds of families with a high economic profile and high net worth.
Single Family Office (SFO): Structure that handles the financial and personal affairs of a single family.
Multi Family Office (MFO): Conceptually it is an extension of the wealth management model. A business that allows firms to commit themselves and establish holistic relationships with fewer clients, on a base of tailored solutions, determined expertise and efficient service.
Investment categories: Group of securities that exhibit the same characteristics, behave similarly in the market and are subject to the same regulations. The three main categories are: variable income (stocks), fixed income (bonds) and cash (money market instruments).
Bonds: Debt financial instruments used by private and public entities to finance their funding needs.
Equities: Financial assets that represent an ownership share in a company.
Sectors: Way to classify industries in the market. For example: consumption, energy, financial, healthcare, industrial, technology, materials, telecommunications, etc.
Estate Planning: Process that allows a hereditary transmission based on the desires of the inheritor and the protection of the needs of their effective environment in a framework of equality. It is not a single act, but a process where a series of activities are developed in a space of time for a common objective.
Account aggregation: Service that consists in the consolidation of all investor’s accounts and information in a single “Balance Sheet”, where their cash, bank deposits, savings accounts, loans and other investments are shown.