Financial glossary

What different types of financial adviser actually mean, and why the distinction matters.

Independent Financial AdviserIFA

An independent financial adviser can look at products and options from across the whole market, not just from one company or a small approved list. This matters because it means your adviser is working for you, not for a bank or product provider. Montfort is an independent firm, which means our recommendations are based on what is right for your situation, not on what earns us the most commission.The ME Principle

Restricted Adviser

A restricted adviser can only recommend certain products or work with certain providers. This is not necessarily bad, but it does mean they cannot always look at the full picture. They are different from independent advisers. It is always worth asking any adviser whether they are independent or restricted before you take advice.

Paraplanner

A paraplanner works behind the scenes to support your financial adviser. They research options, prepare reports, and carry out the detailed technical work that sits behind the recommendations you receive. You may not always speak to a paraplanner directly, but their work is a big part of making sure your advice is thorough and accurate.

Letter of AuthorityLOA

A Letter of Authority is a short, signed document that gives Montfort permission to contact your pension provider, bank, or other financial institution on your behalf. It is a bit like giving someone a note that says: "This person has my permission to talk to you about my account." Without it, those organisations cannot share your information with us, even to help you. We ask for these during the onboarding stage so we can get a full picture of your finances.How the process works

Words that come up when planning for retirement, whether you have one pension or several, in one country or many.

Pension Allowance

The pension allowance is the maximum amount you can put into your pension each year and still receive tax relief on it. Think of it as a yearly limit set by the government. If you go over this limit, you may have to pay extra tax on the amount above it. The allowance can change from year to year, so it is worth keeping track of, especially if you are close to retirement or saving a large amount.Pension Planning

Tax Relief (on pensions)

When you save into a pension, the government adds money on top of what you put in. This is called tax relief. If you are a basic-rate taxpayer, for every £80 you put into your pension, the government adds £20, so £100 goes in total. Higher-rate taxpayers can claim even more back. It is one of the biggest advantages of saving into a pension, and making sure you use it properly is part of what a good financial plan covers.Pension Planning

Defined Benefit PensionDB

A defined benefit pension, sometimes called a final salary pension, is a type of workplace pension where your retirement income is calculated based on your salary and how long you worked for the employer. The amount you get is known in advance. They are often considered more secure than other types because the employer carries the risk of making sure the money is there. They are less common today but many people still hold them from previous jobs.Pension Planning

Defined Contribution PensionDC

A defined contribution pension is the most common type of pension today. You and often your employer pay money into a pot, which is then invested. The amount you get at retirement depends on how much has been paid in and how the investments have performed. Unlike a defined benefit pension, the final amount is not guaranteed. Most modern workplace pensions, including auto-enrolment pensions, are this type.Pension Planning

Pension Freedoms

Pension freedoms is the name for a set of rules introduced in 2015 that gave people much more choice over how they take money from their pension. Before 2015, most people had to use their pension pot to buy a product called an annuity. Now, you can take money out flexibly, leave it invested and draw from it gradually, take it all at once, or mix approaches. More flexibility is a good thing, but it also means more decisions, which is where proper advice helps.Retirement Planning

QROPS

QROPS stands for Qualifying Recognised Overseas Pension Scheme. It is a type of pension scheme based outside the UK that meets specific rules set by HMRC. If you have a UK pension and you move to another country permanently, a QROPS can sometimes be a way to transfer your pension to a scheme in your new country. It is a specialist area with important tax rules attached, and it is not right for everyone. Montfort has deep expertise in this area.Pension Planning

Annuity

An annuity is a product you can buy with your pension pot that gives you a guaranteed income for life, or for a set number of years. You hand over your pension savings to an insurance company, and they pay you a regular amount in return. The upside is certainty: you know exactly what you will receive. The downside is that once you buy one, you generally cannot change your mind. Annuities are less popular than they used to be since pension freedoms gave people more options.Retirement Planning

How money grows, where it can be held, and the words that come up when building or reviewing a portfolio.

Investment Risk

Investment risk is the chance that the value of your money goes down, not just up. Almost all investments carry some level of risk, because the value of what you invest in can change. Higher-risk investments have the potential to grow more, but they can also fall further. Lower-risk investments tend to be more stable, but usually grow more slowly. A good financial plan matches your investments to the level of risk you are comfortable with and can afford to take.Investment Planning

Portfolio

A portfolio is simply the collection of all your investments put together. It might include shares, funds, bonds, property, or cash savings. Thinking about your investments as a whole portfolio rather than individually helps make sure they are spread wisely, are not all exposed to the same risk, and are working together towards your goals.Investment Planning

Diversification

Diversification means spreading your money across different types of investments rather than putting it all in one place. The idea is the same as not putting all your eggs in one basket. If one investment falls in value, others may hold steady or rise, which can cushion the overall impact. A well-diversified portfolio does not guarantee against loss, but it can reduce the risk of one bad investment wiping out everything.Investment Planning

Individual Savings AccountISA

An ISA, or Individual Savings Account, is a way of saving or investing where the growth and income are free from UK tax. Each tax year, there is a limit to how much you can put into an ISA. The money inside can be held in cash, invested in the stock market, or used in other ways depending on the type of ISA. For people with finances across more than one country, it is worth understanding whether and how an ISA fits into your overall plan, as tax treatment can differ abroad.Saving & Investing

Tax comes up throughout financial planning, especially when your life spans more than one country.

Domicile

Your domicile is, broadly speaking, the country you consider your permanent home, where you intend to stay for the long term, or where you have strong ties. It is different from where you currently live. Domicile matters a great deal for inheritance tax in the UK. Even if you have lived abroad for many years, you may still be considered UK domiciled, which affects how your estate is taxed when you die. It is a complicated area and one where specialist advice is important.Estate Planning

Tax Residence

Tax residence is about which country has the right to tax your income and gains. You are usually tax resident in the country where you spend most of your time. But the rules vary significantly between countries, and it is possible to be considered tax resident in more than one country at the same time. This is one of the most important things to understand when you move abroad or return to the UK, because it determines what you owe and where.Cross-Border Planning

Inheritance TaxIHT

Inheritance tax is a tax that can apply to the money and assets you leave behind when you die. In the UK, there is a threshold below which no inheritance tax is charged. Above that threshold, a percentage of the estate may be taxable. Careful planning, including the use of trusts, gifts, and structured financial arrangements, can reduce the amount your family has to pay. If your estate spans more than one country, the rules become more complex.Estate Planning

Capital Gains TaxCGT

Capital gains tax is a tax on the profit you make when you sell something that has gone up in value, such as a property that is not your main home, shares, or other investments. You are not taxed on the full amount you receive, only on the gain. There is usually an annual allowance for gains before tax applies. For internationally mobile people, understanding when and where capital gains tax applies can be complicated, as different countries have very different rules.Tax Planning

Double Tax Treaty

A double tax treaty is an agreement between two countries that says the same income or gains will not be taxed twice, once in each country. The UK has these agreements with many countries around the world. They are very relevant for people who have income, pensions, or investments in more than one country. Understanding which treaty applies to you is an important part of cross-border financial planning.Tax Planning

Financial safeguards that look after the people and income that matter most to you.

Life Assurance

Life assurance is a policy that pays out a sum of money when you die, or in some cases if you are diagnosed with a terminal illness. It is designed to provide financial support for the people who depend on you. There are different types: some run for a set number of years (term assurance), and others run for your whole life (whole of life). For families with finances across multiple countries, choosing the right structure matters.Protect My Family

Income Protection

Income protection is an insurance policy that replaces a portion of your income if you cannot work because of illness or injury. It pays out regularly, a bit like a salary, until you are well enough to return to work, or in some cases until you retire. It is often underestimated but can be one of the most important types of cover for anyone whose household depends on their earnings.Protect My Income

Critical Illness Cover

Critical illness cover pays out a lump sum if you are diagnosed with one of a set list of serious conditions, such as cancer, a heart attack, or a stroke. Unlike income protection, it pays out once and is not tied to being off work. People often use the money to pay off a mortgage, cover medical costs, adapt their home, or simply take time away from work to recover. The list of conditions covered varies between policies.Protect My Family

Planning what happens to your wealth after you, and making sure it reaches the people you intend.

Estate

Your estate is simply everything you own at the point you die: your property, savings, investments, personal possessions, and any money owed to you, minus any debts you have. The total value of your estate determines whether inheritance tax may apply and how it is distributed. Understanding the size and structure of your estate is the starting point for any legacy or estate plan.Estate Planning

Trust

A trust is a legal arrangement where money or assets are held by one person or group (called trustees) for the benefit of someone else (called the beneficiary). Trusts are used for many reasons: to protect money for children until they are older, to reduce inheritance tax, or to make sure assets go to the right people in the right circumstances. They can be set up during your lifetime or written into your will. They are more flexible than they might sound.Legacy Planning

Will

A will is a legal document that sets out your wishes for what should happen to your money, property, and other assets after you die. Without a will, your estate is distributed according to the rules of intestacy, which may not reflect what you actually wanted. If you have assets or family in more than one country, it is especially important to have a will that accounts for that complexity, and in some cases you may need separate wills for different countries.Estate Planning

Power of Attorney

A power of attorney is a legal document that gives someone you trust the authority to make decisions on your behalf, usually if you become unable to do so yourself because of illness or an accident. There are different types: one for financial decisions and one for health and care decisions. Setting one up while you are well is one of the most practical things anyone can do, regardless of age. Without it, family members can face long legal processes to help you.Estate Planning

The terms that come into play when your financial life spans more than one country or currency.

FISIC

FISIC stands for Financially Impacted by Some International Checkpoint. It is the framework Montfort uses to understand and structure financial planning for people whose lives cross borders. Rather than treating international finances as complicated exceptions to a UK-only plan, FISIC starts with the cross-border situation itself and builds a plan from there. The five letters represent five stages: Financially, Impacted, Some, International, Checkpoint, each exploring a different dimension of your situation.The FISIC Framework

ExpatriateExpat

An expatriate, usually shortened to expat, is someone who lives and works in a country that is not their country of origin. For financial planning purposes, being an expat creates a unique set of considerations: which country's tax rules apply, what happens to your pension, whether your insurance covers you abroad, and how to manage money across two or more currencies. These are questions Montfort has been helping people answer since 1995.Cross-Border Planning

Jurisdiction

A jurisdiction is a country or territory that has its own legal and tax rules. When financial advisers talk about different jurisdictions, they mean that the rules in one country may be very different from the rules in another. A pension that is perfectly structured under UK rules might have different implications under Australian or US rules, for example. Cross-border planning is largely about understanding how different jurisdictions interact and making sure your finances work properly in all of them.Cross-Border Planning

Currency Risk

Currency risk is the chance that changes in exchange rates will affect the value of your money or investments. If you earn in pounds but spend in euros, or hold a pension in one currency and live off it in another, movements in exchange rates can make a real difference to how much you actually have. Managing currency risk is part of planning for an internationally mobile life.Cross-Border Planning

Remittance

Remittance refers to money earned or held abroad that is brought into the UK. For some people who are resident in the UK but not domiciled here, only the money they bring into the UK may be taxable, rather than everything they earn globally. This is known as the remittance basis of taxation. It is a complex area that has changed in recent years, so taking up-to-date advice is essential if it might apply to you.Tax Planning

Words that describe what working with a financial adviser actually looks like, from the first conversation to the ongoing relationship.

Suitability

Suitability is the standard that financial advisers are required to meet when making recommendations. An adviser must make sure that the advice they give is right for you specifically, based on your personal circumstances, financial situation, goals, and attitude to risk. It is not enough to recommend something that is generally good. It must be demonstrably appropriate for you. This is one of the reasons why the initial fact-finding stage of working with Montfort is thorough.Your Journey

Financial Plan

A financial plan is a written document that sets out your current financial position, your goals, and a clear set of recommendations for how to get from where you are to where you want to be. At Montfort, we prepare a comprehensive report based on your circumstances and take the time to walk you through it before you decide anything. A financial plan is not a one-off document: it should be revisited and updated as your life changes.Your Journey

Ongoing Review

An ongoing review is a regular check-in between you and your adviser to make sure your financial plan is still working. Life changes: you might get a new job, have children, inherit money, move country, or simply change your mind about your goals. An ongoing review is the chance to catch those changes and adjust the plan accordingly. At Montfort, we continue to monitor your circumstances and financial plan and stay alongside you long after the initial advice.Your Journey

Client Portal

The Montfort client portal is a secure online area where you can access your financial plan and the information that matters to you. During onboarding, it is also where you can submit documents and information securely. Your relationship with Montfort does not stop when a meeting ends, and the portal is part of how we keep you connected to your plan between conversations.Open Client Portal