Certified Financial Planner Glossary: Key Terms and Definitions
- Elective deferral limit (2026)
- Adverse selection
- Accumulation trust
- Actual deferral percentage test
- Adhesion contract
- Adjusted gross income
- Aleatory contract
- Transfer tax basic exclusion (2026)
- Annuity due
- Alternative minimum tax
- Assignment of income
- Bargain element
- Apparent authority
- Average indexed monthly earnings
- Beta
- Bend points
- Basic exclusion amount
- Boot
- Bond convexity
- Coinsurance clause
- Community property
- Conduit trust
- Business overhead expense insurance
- Coinsurance (health)
- Breakpoint
- Capital market line
- Cash balance plan
- Constructive receipt
- Contra proferentem
- Controlled group
- Constructive sale
- Convexity
- Correct Math, Wrong Question
- Credit shelter trust
- Corridor rebalancing
- Cross-purchase policy count
- Crummey five-and-five
- Disability buy-out insurance
- Crummey power
- Decisional balance
- Deferred annuity
- Disposition effect
- Disqualifying disposition
- Distributable net income
- Dollar-weighted return
- Duration
- Efficient frontier
- Elective share
- Financial socialization
- Guardrails
- Dual basis rule
- Exclusion ratio
- Fiduciary duty
- Dual-basis gift rule
- Economic benefit doctrine
- Eligible designated beneficiary
- Estate trust
- Fee-only
- Five-and-five power
- Exchange fund
- H1 Gather Before Act
- H2 Fiduciary Tiebreaker
- H3 Exhaust the Free
- H4 Solve for the Constraint
- H7 The Client's Stated Goal Governs
- Hanging power
- Immunization
- Incidents of ownership
- Human life value
- Inclusion ratio
- H5 Read the Reverse
- H6 Risk Before Return
- Income in respect of a decedent
- Instrumental activity of daily living
- Jensen’s alpha
- Law of large numbers
- Letter of intent
- Material participation
- Minimum tax credit
- Modified endowment contract
- Modified own-occupation
- Moral hazard
- Morale hazard
- Mortality credits
- Net unrealized appreciation
- NUA bottleneck
- Overqualification
- Pass-through entity
- Payback provision
- Permitted disparity
- Portability
- Predeceased ancestor exception
- Premature Recommendation
- Prepaid variable forward
- Pro-rata IRA aggregation
- Pro-rata rule
- Prospect theory
- Product Push
- Provisional income
- QTIP trust
- Qualifying disposition
- Rabbi trust
- Righting reflex
- Reciprocal trust doctrine
- Risk capacity
- Risk tolerance
- Section 2035 three-year lookback
- Sequence-of-returns risk
- Safe harbor 401(k)
- Security market line
- Seven-Rank Decision Hierarchy
- See-through trust
- Substantially equal periodic payments
- Stale Law
- Sharpe ratio
- Step-up in basis
- Systematic risk
- Taxable equivalent yield
- Time-weighted return
- Total-return investing
- Terminable interest rule
- Transfer-for-value rule
- Top-heavy plan
- Treynor ratio
- Wait-and-see buy-sell
- Wealth replacement trust
- Uniform coverage rule
- Unitrust provision
- Unsystematic risk
- WEP and GPO (repealed)
- SECURE 2.0
- Roth conversion
- Required Minimum Distribution
- 401(k) elective deferral
- Full Retirement Age
- Primary Insurance Amount
- IRMAA
- Kiddie tax
- Investment Advisers Act ABC test
- Section 529 plan
- Lifetime Learning Credit
- UGMA / UTMA
- American Opportunity Tax Credit
- Fee-based compensation
- Present value
- Ordinary annuity
- Future value
- Duty of Loyalty
- Duty of Care
- Internal rate of return
- Net present value
- Emergency reserve
- Seven-step financial planning process
- Long-term capital gain
- Section 121 exclusion
- Standard deduction
- Net investment income tax
- HSA
- Section 1031 exchange
- Qualified business income deduction
- Needs analysis (life insurance)
- Entity redemption buy-sell
- Grantor retained annuity trust
- Long-term care partnership program
- Coinsurance (property)
- Intentionally defective grantor trust
- ILIT
- Motivational interviewing
- Moderate versus adapt
- Transtheoretical model
- Housing ratio
- Total debt ratio
- Rule of 72