Financial Planning Acronyms
Have you ever met a FP who presented an SOA that suggested you should do a NCC to your SMSF, establish an LRBA, so you can avoid giving money to the ATO with the aim of generating a return above CPI?
We certainly hope it didn’t come from our office because we like to KISS. Unfortunately, the Financial Planning industry has a bad habit of littering the world with acronyms. We hope you can use the below table to help MSOIA (make sense of it all).
We will periodically update this list, so let us know if there are any other acronyms you’d like us to explain!
| Investments | ||
| CPI | Consumer Price Index | Measures inflation i.e. the changes in the price of goods and services |
| ASX | Australian Stock Exchange | Electronic exchange where shares and other Australian securities are traded |
| RBA | Reserve Bank of Australia | The Australian Central Bank – maintains the financial system and issues banknotes |
| ASIC | Australian Securities & Investment Commission | Australia’s corporate, markets, and financial services regulator |
| GFC | Global Financial Crisis | The financial crisis that peaked globally in 2008 |
| APRA | Australian Prudential Regulation Authority | The regulatory body that oversees the banking, credit unions, insurance, and super industries |
| ATO | Australian Taxation Office | Taxation authority |
| P/E | Price / Earnings Ratio | A company’s market value per share. |
| Superannuation | ||
| SG | Superannuation guarantee | Act requiring employers to pay a minimum percentage into their employees’ superannuation. |
| ABP | Account-based Pension | An income stream, funded by money in your super that is accessible after reaching preservation age. |
| TTR | Transitions to Retirement (pension) | A policy that allows you to keep working while also accessing some of your super benefits |
| SMSF | Self-Managed Super Fund | A private super fund that you manage yourself |
| LITO | Low Income Tax Offset | Tax offset available to low income taxpayers |
| CC | Concessional contribution (pre-tax) | Pre-tax contributions made to super account (e.g. salary sacrifice, employer contributions) |
| NCC | Non-concessional contribution (after tax) | Super contributions on which tax deductions have not been claimed |
| Co-Co | Government Co-Contribution | For low- and middle- income earners who make an after-tax super contribution, the government will automatically make an additional contribution |
| LRBA | Limited Recourse Borrowing Arrangement | The borrowing of money to purchase a single asset, like property, for your super. |
| Centrelink | ||
| CRN | Customer Reference Number | A personal identifying number used for Centrelink purposes |
| APA | Age Pension Age | The age at which you qualify for age pension |
| CLK | Centrelink | Welfare system delivering payments and services to those in need |
| CSHC | Commonwealth Seniors Health Card | Provides seniors with access to cheaper prescriptions and medical services, as well as other government concessions. |
| FTB-A | Family Tax Benefit – Part A | Provides assistance to families and is paid per-child |
| FTB-B | Family Tax Benefit – Part B | Provides assistance to single parents, non-parent carers (e.g. grandparents), and couples with one main income |
| Financial Planning | ||
| SOA | Statement of Advice | Outlines the recommendations being made by a financial planner |
| ROA | Record of Advice | Similar to a SOA, but much less detailed and comprehensive |
| FSG | Financial Services Guide | Document that outlines available services and products. It explains adviser remuneration, and lists internal and external complaint handling procedures |
| AFSL | Australian Financial Services License | Required licensing for a financial services firm to conduct business |
| FPA | Financial Planning Association | Financial planning regulatory body |
| CFP | Certified Financial Planner | Highest level of certification an Australian financial planner can achieve |
| DFP | Diploma, Financial Planning | Signifies that a planner has a tertiary qualification in financial planning |