Glossary - R

Record of Advice (ROA)

A simple document that confirms the advice received from a licensed financial planner or adviser. Similar to a Statement of Advice (SOA) but shorter and less formal. Often given to existing clients to confirm changes to, or implementation of, advice provided in a previous SOA.

redraw facility

Gives you access to any extra money you have deposited into your home loan.


When you replace or extend an existing loan with funds from either the same or a different bank or financial institution.

regulatory risk

The risk that changes in government policy or regulation may affect your benefits e.g. changes in superannuation policy. Changes typically happen after elections or around the time of the Federal Budget. See also taxation risk.

rent to buy

A purchasing arrangement where you rent an item, such as an appliance of piece of furniture, for a specific time. At the end of the rental period, you can continue to rent the item or buy it outright. This should not be confused with rent to buy home ownership schemes which are high risk and often targeted at people who do not qualify for home loans from traditional lenders.

rental bond

Deposit paid by a tenant to the landlord when renting a property. It's a form of security for the landlord in case you damage the property or owe rent when you move out. The amount varies between different states and territories, but is usually equivalent to at least 4 weeks rent.

renter’s insurance

Insurance cover for the contents of a rental home.

responsible entity

A licensed entity or body that operates a managed investment scheme.

retirement savings account

An account offered by financial institutions that is used to save money for retirement. These are simple, low cost, low return accounts.


The amount of money your investment earns.

reverse mortgage

A type of loan often used in retirement as a way for people to access the equity in their home. The loan amount depends on your age, the value of the home and how it is taken (lump sum, regular payments or draw down as needed). Interest is added to the loan and compounds. The loan does not have to be repaid until the borrower moves out or the house is sold, usually as part of a deceased estate.

reward scheme

Offered by credit card providers or retailers, whereby you receive reward points depending on how much you spend. Reward points can then be exchanged for goods and services. Credit cards that offer rewards usually come with higher annual fees and interest charges.


The possibility that your investment may fall in value or earn less than expected.

risk tolerance

The degree of uncertainty you are prepared to accept in relation to investment returns, in particular the extent to which you are prepared to experience a negative investment return while trying to achieve positive investment returns.

roaming charges

Charges when you make or receive calls, texts or connect to the internet on your mobile phone when you are overseas.


Last updated: 03 Jul 2015