FIS Glossary

Indirect language leads to confusion.

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Fiduciary: | noun | Law | US: fɪˈduː.ʃi.er.i/ |

Relating to the responsibility to take care of someone else’s money in a suitable way

Source: https://dictionary.cambridge.org/us/dictionary/english/fiduciary

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Advisor: | noun | Vernacular | US: /ədˈvaɪ.zɚ/ (Also Adviser with an “e”)

Someone whose job is to give advice about a subject

Source: https://dictionary.cambridge.org/us/dictionary/english/adviser

In conjunction with hybrid FINRA authorizations, “adviser” is essentially defined as: “A person who has the authority to periodically conduct themself from the perspective of adviser (RIA/IAR), irrespective of whether or not such authority is being used in this instance”. It DOES NOT YET mean “when acting in an advice capacity” {BUT IT SHOULD!}

What does “adviser” mean to those financial professionals without a FINRA affiliation? (e.g., fixed only insurance agents?) Can they behave as advisors? (YES, let’s codify how!)

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Sell: | verb | Vernacular | US: ‘sɛl/

  1. Give or hand over (something) in exchange for money
  2. Persuade someone of the merits of
  3. Trick or deceive (someone) (archaic, or no?)

Source: https://www.lexico.com/en/definition/sell

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Suitable: adjective | Vernacular | US:ˈsuː.t̬ə.bəl/ |

“Acceptable” or “right” for someone or something

Source: https://dictionary.cambridge.org/us/dictionary/english/suitable

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Identity: | noun | Vernacular | US: īˈden(t)ədē/

The characteristics determining who or what a person or thing is.

Source: https://www.lexico.com/en/definition/identity

A financial professional’s chosen compensation model is material to their identity. Fiduciary Insurance Services, LLC. operates with an intention of respect for, and a sensitivity to, the import of individual identity, at all times.

While fee-based compensation models tend to more frequently attract professionals who desire to work in a fiduciary fashion than do commission-based models, choice of compensation model in insurance is not currently dispositive to fiduciary conduct by any individual. But in the future…

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Product: | noun | Financial Services | US: /ˈprɑː.dʌkt/

A regulated, issuable container- a.k.a. contract- within which trademarkable intellectual property can be legally embedded, and for which either: a) compensation for their work can be paid to an agent or registered representative from within the product structure, in direct respect to sale thereof, or b) investment advice associated with the AUA/AUM brought under advisement by virtue of the product introduction can be billed by an adviser directly to the consumer (preferably from a pool with aligned tax treatment).

Registered representatives and agents can succeed in selling a specific product to retail consumers mainly due to the educating effort of wholesalers whose job it is to represent product issuers with financial professionals.

Product concepts can be valuable only to those Financial Institutions that have already made material investments into, and have operating control over, issuance and wholesaling, and the new concept is valuable iff it is a higher margin one than are others in the issuer’s incumbent product portfolio.

Program concepts, however, can be another story entirely. Programs can be used to create repeatable, intellectually sound methods for weaving together products in a fashion that solves common consumer concerns, and programmatic methods can be operationalized by entities with a corporate Registered Investment Adviser sponsor.

Source: Fiduciary Insurance Services, LLC

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Program: | noun | Financial Services | US: ˈproʊ.ɡræm

A set of related measures or activities with a particular long-term aim: e.g., “an extensive program of reforms”

Source: https://www.lexico.com/en/definition/program

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Wholesaler: | noun | Financial Services | US: həʊlˌseɪ.lər

A person whose livelihood is generated by their skill in inspiring financial professionals to sell the products they represent to consumers. Fee-only advisors do not sell products, and they tend to mis-trust those who do. Product wholesaling can thus be an effective educational model with agents, registered representatives, and hybrids, but it is less resonant with fee-only advisors.

Source: Fiduciary Insurance Services, LLC

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Hybrid: | noun | Financial Services | /ˈhaɪ.brɪd/

A financial professional who is authorized to conduct themself as alternately, but not coincidentally, a FINRA registered representative or as an investment adviser (RIA/IAR).

A financial professional operating with both authorizations typically chooses to use commission-based compensation with mass market clients, and AUM- based fees with wealthier clients. This practice is so common in fact that Investopedia’s RIA definition automatically assumes RIA services will be extended to high net worth clientele only.

This dual-hatted construct results not only in consumer confusion and mistrust, but also in identity conflation for the financial professionals operating within this construct.

Source: Fiduciary Insurance Services, LLC

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Trademark: | noun | Financial Services | /ˈtreɪdmɑːk/

A symbol, word, or words legally registered or established by use as representing a company or product.

Source: https://www.lexico.com/definition/trademark

NY State’s Definition: The term “trademark” as defined by Section 360 of the General Business Law means any word, name, symbol, or device or any combination thereof used by a person to identify and distinguish the goods of such person, including a unique product, from those manufactured and sold by others, and to indicate the source of the goods, even if that source is unknown.

Source: https://www.dos.ny.gov/corps/staterecordsfaq.htm

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Service mark: | noun | Financial Services | /sərvəs märk/

A legally registered name or designation used in the manner of a trademark to distinguish an organization’s services from those of its competitors.

Source: https://www.lexico.com/en/definition/service_mark

NY State’s Definition: The term “service mark” as defined by Section 360 of the General Business Law means any word, name, symbol, or device or any combination thereof used by a person to identify and distinguish the services of one person, including a unique service, from the services of others, and to indicate the source of the services, even if that source is unknown. Titles, character names used by a person, and other distinctive features of radio or television programs may be registered as service marks notwithstanding that they, or the programs, may advertise the goods of the sponsor.

Source: https://www.dos.ny.gov/corps/staterecordsfaq.htm

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Gestalt: l noun [C usually singular] l Psychology, Social Sciences l US: /ɡəˈʃtɑːlt/ l

Something such as a structure or experience that, when considered as a whole, has qualities that are more than the total of all its parts

Source: https://dictionary.cambridge.org/us/dictionary/english/gestalt

Michelle Richter, MBA

Fiduciary Insurance Services, LLC.
347-871-0823

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