A type of reinsurance in which the reinsurer can accept or reject any risk
presented by an insurance company seeking reinsurance.
Family Foundation
A private foundation created to make charitable contributions on behalf of a
particular family. The board is often limited to family members.
Family Income Policy
A form of term insurance. If the death of the insured occurs during the term an
income will be paid from the date of death to the end of the term.
Federated Fund Drive
A centralised campaign whereby one organisation raises money for its member
agencies. The United Way campaign and the Community Works are examples.
Final Remuneration
The maximum amount of earnings that can be used for the purpose of calculating
the maximum retirement benefits that can be received from an Occupational Pension Scheme. The definition of Final
Remuneration contained within most Occupational Pension Schemes is usually more restrictive than the definition
provided by the Pension Schemes Office.
Final Salary Scheme (Defined Benefit Scheme)
A particular form of defined benefit pension scheme (see under that heading).
Benefit is calculated based upon the final salary of the member and years of service.
Finance
—n. 1 management of (esp. public) money. 2 monetary support for an
enterprise. 3 (in pl.) money resources of a State, company, or person. —v. (-cing) provide capital for. [French:
related to fine]
Finance Company
n. (also finance house) company providing money, esp. for hire-purchase
transactions.
Finance Broker
A broker who arranges finance. (See 'broker')
Financial - Financially
adj. of finance.
Financial Planning Certificate
A professional qualification for financial advisers obtained by examination
through the Chartered Insurance Institute. Holders are entitled to be Registered with the Society of Financial
Advisers.
Financial Services Authority
The single regulatory authority for the UK financial services industry.
Financial Year
Year as reckoned for taxing or accounting, esp. from 6 April to 5 April every
year (in the UK). 1. Any year connected with finance, such as a company’s accounting period or a year for which
budgets are made up. 2. A specific period relating to corporation tax, i.e. the year beginning 1st April (the year
beginning 1st April 1988 is the financial year 1988). Corporation-tax rates are fixed for specific financial years by
the Chancellor in his budget; if a company’s accounting period falls into two financial years the profits have to
be apportioned to the relevant financial years to find the rates of tax applicable. Compare with fiscal
year.
Financier
n. capitalist; entrepreneur. [French: related to finance]
Fiscal Policy
influencing the direction of an economy through the use of taxation (See also
Monetary Policy)
Fixed rate
A guaranteed rate that is normally set just below the standard variable rate
and is guaranteed for a certain period of time. If the standard variable rate falls below the fixed rate you will still
have to pay the fixed rate. Once the fixed rate period ends you will normally pay the lender's variable rate. Sometimes
there are redemption penalties associated with this type of deal.
Flexible Benefits
A program where employees can select from a range of benefits offered by their
employer in order to meet their own specific needs.
Flexible mortgage
A feature of some mortgages that gives you freedom to change the amount and
frequency of your mortgage payments.
Flow-through Funds
Contributions to a foundation that are used primarily for direct grant making,
rather than for endowing the foundation permanently. Most corporate foundations depend on these funds each year rather
than on income produced from endowment funds.
Footsie
the popular name for the FT-SE 100 Share Index, the UK stockmarket's main
benchmark index, which measures the daily share price performance of Britain's top 100 public limited companies, ranked
by their size (See also Market Capitalisation)
Foreign Draft
This is similar to a bankers' draft, but is in a foreign currency. Foreign
drafts take around 5 days to arrive depending on where it is sent.
Foundation
A private non-profit organisation with funds and a program managed by its own
trustees and directors, established to further social, educational, religious or other charitable activities by making
grants. A private foundation receives its funds from, and is subject to control of, an individual family, corporation
or other group of limited number. In contrast, a community foundation receives its funds from multiple public sources
and is classified in the US by the IRS as a public charity.
FPC
Financial Planning Certificate.
Fixed Rate
The interest rate is fixed for a set period.
Free Cover Level
The maximum amount of benefit for which an insurance company is prepared to
insure a member of a group insurance scheme without the member needing to provide evidence of good health.
Freehold
If you buy a property which is freehold it means that both the land and the
property is yours, unlike leasehold where the land would not belong to you.
A scheme whereby an individual can make payment into an independent arrangement
to supplement an occupational pension scheme as longs as the anticipated benefits from the two schemes together are
less than the maximum permitted under the rules laid down by the Inland Revenue.
Friendly Society
Similar to a mutual insurance company. A Friendly Society, registered under the
terms of the Friendly Societies Act 1974, is owned and operated for the benefit of its members. There are limits on the
amounts which can be invested by members but tax privileges are available to policies within those limits. Some
Friendly Societies now operate with separate sections for 'tax-exempt' and 'ordinary' business.
FSA
Financial Services Authority.
FSAVC
Free Standing Additional Voluntary Contributions.
FT-SE
This is an index compiled by the Financial Times and is made up of all the
companies listed on the UK Stock exchange (currently around 835). The purpose of the index is to provide a benchmark of
the performance of the stock market as a whole. This benchmark is often used to measure the effectiveness of a fund
manager.
An annuity which is payable for a fixed period regardless of whether the
annuitant survives, and thereafter only while the annuitant is alive. Annuities guaranteed for 5 years are very
commonly used in conjunction with pension arrangements.
Fund
general term for any investment vehicle which pools together the money of many
small individual investors and invests it in certain markets and securities according to a defined set of investment
aims and objectives. Covers such investments as unit trusts, investment trusts and pension plans.
A scheme which relates to a promise of benefits by an employer to an employee
and the setting aside by the employer of funds for that purpose. Such schemes do not enjoy such favourable tax
treatment as approved schemes, but are not restricted by contribution limits such as the Earnings Cap. Contributions
can be made to the scheme by the employee. The usual purpose of such schemes is to provide benefits in excess of the
normal benefit level of approved schemes (eg Personal Pension Plans and Occupational Pension Schemes). The tax
treatment of Unfunded Unapproved Retirement Benefit Schemes (UURBS) is very different to the tax treatment of Funded
Unapproved Retirement Benefit Schemes (FURBS).
Fund Manager
A fund manager is employed to invest money for (amongst other things) unit
trusts and investment trusts. Fund managers aim to outperform their chosen index by buying shares, which they think
will do particularly well. They can also choose to keep a percentage of their fund in cash if they're not optimistic
about the outlook for the stock market. Naturally, fund managers get paid to do this, so charges for an actively
managed fund tend to be higher than for an index tracker.
Fundamentals
usually refers to the underlying economic factors affecting a particular
market, country or sector and will include such aspects as industrial output, wages and raw materials costs, currency
strength or weaknesses, trade balance and so on.
Futures
short for Futures Contract, which is an obligation to buy or sell a specific
amount of a commodity, currency or financial instrument at a particular price on a stipulated future date. The price is
established between buyer and seller on the floor of an exchange, such as the London International Financial Futures
Exchange (LIFFE), using an 'open outcry' system. The contracts themselves may be traded with third parties. (See also
Options)
