Glossary

Plain-English definitions of the research and compliance terms that come up in modern advisory practice.

• Suitability

  What suitability means for financial advisors, how it relates to the IPS and fiduciary duty, and what a suitability gap is.

• Portfolio drift

  What portfolio drift is, why it creates compliance and suitability risk, and why daily monitoring beats quarterly reviews.

• Investment Policy Statement (IPS)

  What an Investment Policy Statement is, what it contains, and why it's the reference point for monitoring portfolio drift and suitability.

• Household-centric advising

  What household-centric advising means, how it differs from contact-based CRMs, and why joint accounts, entities, and per-member IPS documents need it.

• Audit trail

  What an audit trail is in an advisory context, why books-and-records rules require one, and what makes a research audit trail defensible.

• AI washing

  What AI washing is, the 2024 SEC enforcement actions that put it on the map, and how advisors avoid it.