Consultant launches site to track, decipher industry jargon

Outside of motorsports, asking someone whether they are "P1" or "P2" would likely confuse them. But for current or prospective Ameriprise financial advisors, it's a fundamental question about their job.

Transition to RIA

The terms ("P1" refers to Ameriprise's W-2 employee advisors, while "P2" refers to1099 independent contractor advisors in the firm's franchise channel) are just two examples of unwieldy terminology used by wealth management companies. To combat confusion around industry terms, Brad Wales launched FirmJargon.com, a new glossary website. The project began when Wales, a former Raymond James business development executive who is the founder of consulting firm Transition to RIA, decided to turn his personal collection of definitions of wealth management jargon found at two dozen firms into an online dictionary for advisors and other industry professionals.

Wales said he created the site as a resource for those encountering unfamiliar terms in the marketplace, ensuring they can "know what it's referring to, to hopefully understand it correctly." He cited Ameriprise's labels for its two advisor channels as a prime example of confusing jargon. "That doesn't help you at all understand what that means, so I tried to memorialize it for the historical record."

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Early stages of a potentially endless task

He aims to expand the nascent list over time, through his own research and any collaborative assistance from tipsters who have deciphered the array of jargon across a field that is infamous among regular people for its incomprehensible terms. Even veteran advisors may struggle to keep track of the many names that registered investment advisory firms, brokerages, custodians and asset managers use for their various divisions, services and account types. 

Wales' list currently has entries for just 24 firms out of an industry spanning many tens of thousands of them. Besides Ameriprise, FirmJargon.com includes definitions for terms used at: LPL Financial, Wells Fargo, UBS, Merrill, Morgan Stanley, Goldman Sachs, Osaic, Edward Jones, Focus Financial Partners, Charles Schwab, Fidelity Investments, BNY Pershing, Cetera Financial Group, Kestra Holdings, Altruist, Mariner Wealth Advisors, Robinhood, Stifel, RBC and, with one of the lengthiest assemblages of terms for any firm, Raymond James — Wales' onetime employer.

Sorting out the terminology of prospective firms and vendors amounts to "a huge challenge" for advisors considering a change, according to Jodie Papike, CEO of independent wealth management recruiting firm Cross-Search.

"Every firm has different ways of labeling things and different ways that they operate, and the environment is very, very complicated," she said. "There's just so much complication in our industry, and this is really just scratching the surface."

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Alphabet soup

For example, the 14 terms on the site associated with Raymond James contain nine acronyms referring to types of accounts, units of the company and the ticker name for its stock. But any company with tens of thousands of employees and several million of clients could keep industry jargon scholars occupied for months trying to parse and group every term. And Wales started the list with only a few terms from some of the industry's biggest companies.  

Confounding industry acronyms — did clients open a "SAM" (Strategic Asset Management), "MWP" (Model Wealth Portfolios) or "OMP" (Optimum Market Portfolios) account at LPL, or did planners move to the firm's SWS (Strategic Wealth Services) channel? — can easily lead to misunderstandings among advisors, journalists or investors, Wales said. And that could hurt a firm's recruiting efforts, if advisors aren't even aware of its various affiliation or account options.

The glossary is "a good reminder to firms that, 'Hey, perhaps it's getting a little unruly with all the different names they're using,'" and to try to use monikers that "keep things descriptive" of the meaning, Wales said. "I would say a lot of these firms, quite frankly, fail at that."