Alternative Asset Management/Alternative Assets

managing assets that were not traditionally considered part of a conventional investment portfolio. Includes investments such as Real Estate, Private Equity and Hedge Funds.

AML

acronym for Anti-Money Laundering. Refers to a set of law and regulations to stop the generation of income through illegal activity by preventing money that came from illegitimate sources from looking like it was earned legitimately. Financial institutions are required to carry out due diligence procedures to ensure they are not participating in money laundering activities. Forms part of compliance processes.

Asset Allocation

an investment strategy implemented to balance risk and reward by diversifying investments across a range of different asset classes such as cash, bonds, real estate, stocks, commodities, precious metals and derivatives.

Asset Management

the process of overseeing a client’s financial portfolio. Asset management companies provide advice to clients to help them determine where they should invest their money to reach their financial goals. The companies make investment decisions on behalf of their clients.

AUM

acronym for Assets Under Management. Refers to the total market value of assets managed by a bank or other financial institution on behalf of their clients.

Bond

a type of debt security/investment whereby the investor loans money to an entity (usually a company or government/city). The debtor is obliged to repay the full invested amount with regular interest payments. Bonds are generally considered safer investments.

Booking Centre

Location where client money and assets are booked and deposited making them under the jurisdiction and protection of the booking country.

CFA

acronym for the Chartered Financial Analyst qualification. Charterholders complete courses covering investment management, financial analysis, derivatives, stocks and bonds.

CISI

acronym for the Chartered Institute for Securities and Investment. They offer qualifications in various areas of finance including wealth management, Islamic Finance, financial planning, capital markets and corporate finance, and compliance and risk.

Commission

the fee bankers and advisors receive for selling company products.

Commodities

term covering goods such as metals, energy and agricultural products. Popularly invested in through futures contracts.

Compliance

refers to working within official requirements and regulations and preventing illegal activity. Non-compliant institutions face penalties and damaged reputations. Processes and regulations affecting compliance include AML, KYC and FATCA.

Compliance Officer

screens new clients to the bank and monitors existing accounts in accordance with KYC and AML to ensure bank compliance.

Contingency Search

a type of recruitment search where the client only pays on the successful introduction of a candidate.

Corporate Advisory

term used to describe the advisory services provided to corporate bodies about the financial aspect of their operations. Can be provided by advisory boards within the company or external bodies who deal in these services.

Currency

an accepted form of money, used as a medium of exchange and issued and circulated within an economy. One currency can be traded for another, for example US dollars to Euros, on foreign exchanges.

CV

acronym for Curriculum Vitae. An account of a person’s qualifications, professional experience and education, typically sent as part of a job application.

DCM

acronym for Debt Capital Markets. It is a market which facilitates companies and governments in raising funds through trading debt securities such as corporate and government bonds. A team working in DCM advises on raising funds and helps provide access to a pool of investors.

Debt Instrument

a financial obligation which allows a person or company to raise funds by borrowing money and repaying it in the future. Examples include notes, bonds, mortgages and leases.

Debt Mutual Funds

refers to a Mutual Fund scheme where at least 60% of its fund is in debt instruments, usually involving fixed income instruments.

Derivatives

a contract between two or more parties which derives its value from the value of an underlying financial asset, index or security. Common derivatives include futures contracts, forward contracts, swaps and options.

Developed Markets

a term used to refer to countries that are the most advanced economically and have highly developed capital markets. Found mostly in Western Europe, North America and Australasia.

Discretionary investment management

a form of investment management where the portfolio manager or investment advisor makes buy and sell decisions for the client’s account.

EAM

External Asset Manager. A wealth management platform which works ‘outside’ of a bank and may focus on specific areas, investments or types of client. They do not hold assets in custody but instead rely on custodian banks. Often used interchangeably with independent asset manager.

ECM

acronym for Equity Capital markets. A market to facilitate capital raising for businesses through the issuance of stock.

Emerging Markets

a term used to describe nations whose economies are progressing by means of rapid growth and industrialisation.

Equities

a type of investment where an investor buys shares in a company which represent a proportional stake in the company’s economic interests.

Estate Administration

the process of dealing with a person’s legal and tax affairs after they die such as property, shares and personal possessions if the deceased did not leave a will or some assets are not included in their will.

Executive Search

formal term for headhunting. A type of recruitment service where highly qualified candidates are sought out and recruited for senior-level and executive positions.

Extraction Search

when the client tells a recruitment agency who they want to hire and the agency carries out the role of approaching the candidate.

Family Office

an organisation offering a complete outsourced solution for the preservation, management and investment of the wealth of a single family or group of families.

Farmer

a type of Private Banker/Relationship Manager. Their focus is on developing relationships with and retaining existing customers, building on a portfolio of clients given to them when they join the bank. The other type of Private Banker is the hunter.

FATCA

Acronym of the Foreign Account Tax Compliance Act, legislation passed in the US to detect and deter tax evasion by people who keep money outside the US. Became active in 2014 and requires financial institutions outside the US to report information on financial accounts held by US persons on an annual basis.

Financial Advisor/Planner

most Financial Planners are Investment Advisors who can also offer advice on other financial aspects such as savings, insurance, taxes and retirement.

FINMA

The Swiss Financial Market Supervisory Authority is an independent financial markets regulator. The name comes from an abbreviation of the German name: Eidgenössische Finanzmarktaufsicht.

Fixed Income

a type of investment which provides a return in the form of payments on a fixed schedule.

Foreign Exchange

the market in which foreign currencies are traded

Fund of Funds

an investment strategy of investing into a fund which in turn invests in a range of other investment funds. This allows an investor instant diversification with one investment.

Futures

a type of derivatives contract between two parties where both parties agree to buy and sell a particular asset of a specified quantity, at a predetermined price on a stated date in the future.

Headhunter

a person who looks for candidates to fill a specific job position. Headhunters seek out and approach the most desirable candidates. They are normally employed to conduct a specialist search for candidates with specific experience or skillsets.

Headhunting

see headhunter

Hedge Fund

an investment vehicle where investors contribute money into a pool to be invested by the fund manager according to the fund’s strategy. Intended to maximise investor returns and eliminate risk and only open to investors who meet certain net worth requirements.

High Yield (bonds)

a type of corporate bond with a low credit rating (below investment grade) as issuers are considered to have a greater risk of defaulting on interest repayments. Offers higher paybacks than government bonds in order to attract investors.

Hiwala (alternative spelling: Hawala)

a term used in Islamic Finance to describe the transfer of debt or the claim of a debt from one party to another.

HNW(I)

High Net Worth (Individual). The threshold for what qualifies someone as a HNWI varies from bank to bank but generally HNWIs have financial assets totalling more than US$1 million.

Human Capital

the sum of soft and hard skills of a person than can be enhanced by training and development.

Human Resources (HR)

term used to describe the people who make up the workforce of an organisation, referring to their knowledge, skills and motivation. It can also be used to describe the part of the company charged with activities relating to employees (recruitment, payroll, tax, compensation, employment laws etc.)

Hunter

a type of Private Banker/Relationship Manager. They are responsible for bringing in new clients and assets for the bank. Their focus is on new business development and networking and are usually tasked with building their own portfolio of clients from scratch. The other type of Private Banker is the farmer.

IAM

Independent Asset Manager – See External Asset Manager

Ijara

a type of sharia compliant mortgage in Islamic Finance

Index (i.e. equity index / indices)

indicator of statistical measures of change in a stock/securities market. They are also traded as equity indices and index futures and can form part of an investment portfolio.

Inheritance planning

the preparation of wills and trusts for a client

Institutional

describes large volume institutions such as banks, insurance companies, and pension fund managers

Insurance

a contract that an individual or business buys to receive financial protection or reimbursement against losses.

Interview

a formal consultation or meeting between a company and candidate to evaluate qualifications or experience and discuss the role. Can be conducted in person, by telephone or video conference.

Investment Advisor (IA)

work alongside Relationship Managers to provide advice on asset allocation to clients. They create and deliver recommendations based on the risk level of the investments and the client’s risk specifications. Key asset classes they may advise on include equities, fixed income, bonds, commodities, credit and structured products and notes.

Investment Grade (bonds)

a level of credit rating regarded as carrying minimal risk to investors

Islamic Finance

a sharia compliant type of finance. Investments cannot be made in assets forbidden in Islam such as pork, tobacco, alcohol and gambling, and interest is not charged to generate wealth.

KYC

acronym for ‘Know Your Client’. It is the term given to the process of identifying and verifying the identity of clients to meet their legal responsibilities. This can include asking the client for a list of assets, information on marital status, children, and experience of different asset classes

Leverage

an investment strategy of using borrowed money to significantly increase the returns on investment

Liabilities

a company’s legally binding financial debt or obligations which are incurred in order to fund business operations

LTV

Loan-to-value – a term used to express the risk assessment ratio of a loan to the value of a purchased asset. It is often used by financial institutions before approving a mortgage

Mergers and Acquisitions (M&A)

an area of corporate finance dealing with the purchasing and/or joining of companies to form one entity

Money market

refers to a section of the financial market where financial institutions make available the opportunity to buy and sell various forms of short-term securities

Murabaha

a type of mortgage available in Islamic Finance where the bank buys the property and sells to the individual at a slightly higher price through pre-agreed instalments

Murdaraba

a term for an agreement between two parties where one is given money by the other to invest in a business with both parties sharing the risk and any profit. Only the investor, however, loses money if the investment fails

Musharaka

an Islamic mode of finance whereby capital is fronted by both parties and both share the results of the investment whether it be profit or loss

Mutual Fund

when money from a large group of investors is pooled and invested into bonds, stocks or other assets. Each investor owns shares of the mutual fund

NNA

acronym for Net New Assets. See NNM

NNM

acronym for Net New Money, also known as NNA (Net New Assets). The term used to describe the increase in AUM through receiving new money from a Private Client. Private Bankers often have targets regarding NNM/NNA which will normally be assessed over the course of a year

Non-Resident

term used to describe people who use the services of a bank but are not resident or domiciled in that country. Some banks offer specific ‘Non-Resident’ accounts. Someone may want a non-resident account is if they are an expat and their pension needs to be paid into a domestic account or to allow family members based in that country to access funds. India and Pakistan have some of the largest diasporas in the world leading to services specifically for NRIs and NRPs

NRA

Non-resident Alien – a term used in the United States to describe any individual who is not a US citizen or US national and has not passed the green card test or the substantial presence test

NRI

Non-Resident Indian – a term for tax reasons to describe an Indian citizen or Foreign National of Indian Origin residing outside India for the purposes of employment, vocation or carrying out business for an indefinite time.

Under the Income Tax Act of 1961, someone is deemed a resident in India if they have stayed in India for a period equal or more to 182 days of the previous financial year or if they are in India for a period of 60 days or more during the previous year and 365 days or more during four years immediately preceding the previous financial year. A person is considered of Indian origin if they, their parents or any of their grandparents were born in undivided India

NRP

Non-Resident Pakistani – a term used in Pakistani banking terminology to refer to an account where funds are deposited by a Pakistani citizen who resides outside of Pakistan. This includes citizens who have migrated to another country as well as people born abroad of Pakistani descent.  The number of Pakistani people living and working abroad, mainly in the Middle East, to send money home has created a demand for NR services

NTB

A New To Bank (NTB) customer is a customer who does not hold any existing accounts with the bank. Some banks may require that to qualify for NTB status, a customer must not have held an account with them previously within a specific time frame, for example, within the last six months

Offshore

used to describe banking when the depositor banks outside the country of residence

Options

a type of contract where the participant has the right but not the obligation to buy or sell an asset for a specific price during the life of the contract

Philanthropy

the donation of money to good causes. Philanthropy services are offered by financial institutions to help HNWIs donate money to or develop charitable projects

Portfolio Management/Manager (PM)

responsible for making direct investments in asset classes based on their understanding of the markets in order to manage fund performance

Private Banker

see Relationship Manager

Private Banking Assistant

see Assistant Relationship Manager

Private Equity

a type of equity consisting of equity securities and debts in a company which is not publicly traded on a stock exchange

Private Placement

a method of raising capital by selling securities to a relatively small number of select investors

Product Management/Manager

role responsible developing new banking products from idea generation to roll-out that the financial institution can sell to their clients

Rahn

term to describe when a valuable asset such as property is posted as collateral for a debt in Islamic Finance

Recruiter

a person or organisation who deals with the hiring of people for a company

Recruitment

the process of hiring someone to fill a job role. Can be done internally by a team or outsourced to external parties

Relationship Management/Manager (RM) / Private Banker (PB)

term often used interchangeably with Private Banker. It is a front office, client facing position. A relationship manager does not necessarily develop new business but manages existing client relationships while people with the Private Banker title will be more responsible for originating new business. Depending on the bank it can be same as a Private Banker

Resume

often used interchangeably for CV but considered by some as a shorter version, typically one page long

Retail Banking

also known as consumer banking. Term used to describe the mass-market, high street banking services available to individual customers

Retained Search

a type of recruitment search where the recruiter is paid an up-front fee to perform a specific search with the rest of the fee being paid either during or on completion of the search

RND

Stands for Resident Non-Domiciled. Someone who is RND is resident in one country but is domiciled in another. RND tax status avoids income and capital gains tax on investments and other assets held overseas

ROA

Return on Assets is a performance indicator of the profitability of a business. It is calculated by dividing net profit by total assets to get a percentage. Banks tend to have low ROAs which are around 1%

ROE

Return on Equity is a measure of profitability and efficiency. It is the amount of net income returned as a percentage of shareholders’ equity. The ROE is calculated by dividing net income by shareholders’ equity

Search & Selection

a service offered by recruitment companies. The company will search for candidates, review them and then submit the most suitable to the employer

Sovereign Bonds

bonds issued by a government to raise funds. Different to government bonds       in that government debt is issued in the domestic currency while sovereign debt is issued in a foreign currency

STEP

a professional qualification for people in specialise in family inheritance and succession planning

Structured Products

a ‘tailor-made’ combination of financial instruments which aim to provide the best solution for investors

Succession planning

a type of service offered by financial institutions to help sustain and grow family wealth over successive generations

Sukuk

term for sharia-compliant bonds available in Islamic Finance

Swaps

a type of derivative contract where two parties exchange cash flows. They can be based on interest rates, stock indices, commodity prices and foreign currency exchange rates

Takaful

a form of co-operative insurance in Islamic Finance

Talent acquisition

viewed as long term, strategic version of recruitment. It is an ongoing strategy for long-term human resources planning, when companies plan for vacancies requiring a specific skillset months in advance. Can include outreach, networking and relationship building with potential candidates

Tax haven

a country where their tax laws and regulations can be used to evade tax laws in other jurisdictions

Tax planning

a type of planning to help individuals plan their tax more efficiently and minimise tax liability through best use of available allowances, deductions, exemptions etc.

Trader

executes trades on various asset classes on behalf of clients for their investment portfolios

Trust

an arrangement whereby a person or institution is given control over another person’s assets for the benefit of a third party