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JOB PROFILE – FUND ACCOUNTANT

OVERVIEW

Are you detail-oriented? Do you have a basic understanding of the investment market and accounting? Do you enjoy analyzing financial data and applying your accounting and mathematical skills to calculate the daily value of funds? Do you thrive working in a fast-paced environment and are able to meet strict deadlines? If so, you may find the Fund Accountant role to be the right role for you.

Fund Accounting is the process of accounting for a portfolio of investments such as securities, commodities and/or real estate held in an investment fund such as a mutual fund or hedge fund.

Fund Accountants are primarily responsible for all aspects of day-to-day accounting for a group of assigned funds including, calculating/reporting the daily NAV (Net Asset Value) per unit, and compiling standard weekly and/or monthly financial statements, and income and expense accruals.

Fund Accountants work for organizations that manage funds. Some organizations both manage and sell funds, some just sell funds and some just manage funds. Fund Accountants are not typically employed by firms that just sell funds as their role is primarily related to fund management (e.g. daily calculations of fund values, etc.).

It’s about you

What is fund accounting?

What is the role of (job)?

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OVERVIEW, CONTINUED

Fund Accountants work in a fast-paced environment and need to be able to work under pressure and meet strict deadlines. For example, daily Net Asset Value (NAV) reports are required for funds. This requirement creates daily deadlines for Fund Accountants.

The volume of work is frequently market driven. For example, when the market trading volume and pricing are steady, a Fund Accountant would likely need to record fewer transactions and calculate for less variance in pricing, whereas when the market is very volatile, more work is required of the Fund Accountant to produce up-to-date NAV reports.

There are typically two or more levels of Fund Accountants:

• Fund Accountant

• More senior Fund Accountant roles

Senior Fund Accountants perform the daily maintenance of funds with a high degree of complexity and are responsible for reviewing the work of more junior employees. In some organizations, Senior Fund Accountants may also conduct research in support of fund management. For example, using their own company’s records, they may compare several funds performance over a period of time and prepare reports for use by more senior employees. Similarly, they may also be asked to research corporate actions (e.g., dividend declaration and payment, stock splitting) and report the effects of on funds.

Entry level Fund Accountants will focus on the daily value calculation of funds, which includes accounting for purchases, sales, income accruals and expenses, to assist in fund pricing. As Fund Accountants become more familiar with fund valuation, they may progress into roles that can entail more financial research, forecasting of fund values, balancing accounts and assisting with financial reporting.

Fund Accountants work in the fund management area of any financial organization that manages a fund, such as a mutual fund company or bank. Some organizations outsource their fund accounting to firms that specialize in this function. Fund Accountants may, therefore, also be employed with these service providers.

Fund Accountants provide daily analysis on various financial metrics that assist these firms in setting the price/value of their funds.

More senior Fund Accountants may focus on complex funds such as hedge funds, exchange traded funds and private equity funds.

Work context for this role

Areas of focus

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QUALIFICATIONS

Knowledge requirements:

• Fund Accountants require specific knowledge of:

Ø The investment market Ø Financial securities language Ø Industry legal and regulatory requirements Ø The systems with which they must work with on a daily basis Ø Operational functions within fund accounting (e.g., reconciliations, trade

matching) Technical Skills:

• Fund Accountants require specific technical skills:

Ø Accounting skills including the ability to conduct cash flow analysis, reconcile assets/cash balances and review transactions for accuracy in reporting

Ø Computer skills (e.g., proficiency with MS Office applications, spreadsheets proficiency, accounting software/database applications)

Ø Time management and prioritization skills to complete work within established timeframes and meet the required deadlines

Soft Skills:

• Fund Accountants require specific soft skills:

Ø Analytical skills to review large volumes of financial data and calculate specific values

Ø Communication Skills (written and verbal) to communicate with other team members and fund administrators/managers

Ø Detail orientation and information seeking to review financial information, document and capture relevant and accurate information in reports, notes or financial statements

Ø Organizational skills to be able to manage analysis on multiple funds Ø Problem solving to be able to find missing information required for accounting Ø Teamwork and collaboration to support all team members particularly during

busy month-end periods Applicable Experience:

• Applicable experience generally includes a role or education with exposure to accounting (e.g. accounting internship(s))

• Experience in the investment industry is also helpful

Qualifications for this role

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QUALIFICATIONS, CONTINUED

Education, Certifications, Designations and Licenses:

• Positions typically require post-secondary education in the accounting or finance discipline; individuals in pursuit of a financial accounting designation would be viewed as high potential candidates for the role.

Other Training:

Additional certifications may include: • Completion of a mutual funds course (via the Investment Funds Institute of Canada

or CSI Global) or the Canadian Securities Course (via CSI Global) is typically considered an asset

• Familiarity with Bloomberg and pricing processes for equities and bonds is an asset

Professional Associations may include: • N/A

Qualifications for this role, continued

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DUTIES

The main duties of the Fund Accountant:

• Calculate and report on Net Asset Values (NAVs) for funds on a daily basis & provision of reports to interested parties on a regular basis (i.e., daily, weekly, monthly, quarterly and annual) in order to price funds

• Key Activities:

Ø Calculate income and expense accrual statements, which are also known as profit /loss statements, or yield statements

Ø Prepare item specific accrual statements such as dividend/interest income worksheets and other schedules (i.e. bond accrual, T-Bill, capital stock continuity, etc).

Ø Monitor and record security transactions including trade, interest payments, maturities, and corporate actions (i.e. a stock splitting)

Ø Complete variance analyses of stock prices over time and research, typically by utilizing tools such as Bloomberg terminals

Ø Receive, research and verify security transactions, including dividend and capital stock transactions, T-bill accrual/yield

Ø Enter data related to transactions which need to be recorded in the system (e.g., all cash deposits, interest and dividend payments, fee payments (including manual entries))

Ø Compile portfolio cost (i.e., the cost to administer the fund), also known as a management-expense ratio

Ø Reconcile the NAV analysis to the fund’s general ledger/journal system • Perform a variety of daily, monthly and periodic functions relating to accounting and

record keeping

• Key Activities:

Ø Prepare cash reconciliation between parties (i.e. systems, brokers, investment managers); research and resolve discrepancies, including currency differences

Ø Report cash availability to portfolio/investment manager to ensure minimum idle cash

Ø Compile reports regarding portfolio turnover and other relevant information for use by management and regulatory documentation requirements (e.g., for regulatory bodies such as the Ontario Securities Commission, the Investment Industry Regulatory Organization of Canada, Mutual Fund Dealers Association of Canada)

Main duties

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DUTIES, CONTINUED

• Work with fund managers & other parties as required to provide accounting specific support & analysis

• Key Activities: Ø Assist in the pricing of funds Ø Prepare T3 income distribution factors (Return on Capital) Ø Liaise with third party service providers with respect to various aspects of fund

administration such as subscriptions, redemptions, distributions and payments of fund expenses

• Assist in the maintenance and improvement of systems applications • Key Activities:

Ø Coordinate with data/operational teams to ensure data/methodology/operations are in place to support products and fund analysis requirements

Ø Report any system issues to relevant group for process improvements

Depending on the organization you work for, Fund Accountants may hold various job titles:

• Fund Analyst

• Pricing Analyst

• Investment Accountant

• NAV Specialist

Main duties, continued

Representative job titles

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CAREER PATH

To move into a Fund Accountant role, you need to have a post-secondary education in the Accounting discipline and/or a previous role that has provided you with Accounting experience. You need to be detail oriented, and have strong analytical ability with good time management skills to perform in this role.

As you gain experience in the Fund Accountant role, you may take on additional supervisory and management duties or become a more senior Fund Accountant.

More senior Fund/Investment Accountants will be able to calculate and provide supporting research for a greater variety of products such as exchange traded funds. In addition, a senior Fund Accountant will typically review the work of junior colleagues (e.g. perform audit and reconciliation checks).

Fund Accountants may also broaden their role by:

• performing fund related research (e.g. reviewing the companies which make up a fund and providing analysis on performance of each and researching any higher/lower performers within the fund and determining reasons for this performance)

• preparing regulatory filings, financial statements and/or annual reports

• preparing reports on fund-investing topics in order to support fund managers

Alternatively, you may choose to move into a tax, trust or derivative accounting role.

Moving into the role

Progression beyond the role

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CAREER IMPACTS

There are several external factors that can influence the qualifications for the role, with the major factor being:

• Rules, regulations and tax laws that apply; for example movement of the Canadian accounting standards from GAAP (Generally Accepted Accounting Principles) to IFRS (International Financial Reporting Standards) required many fund accountants to acquire more knowledge in IFRS standards.

The role of Fund Accountant has not changed significantly in terms of work content and job requirements in the past few years; however, the way the work is completed has changed.

Whereas in previous years, many financial institutions had fund accounting departments, this function is now often being outsourced to firms specializing in fund accounting.

Nonetheless, while the type of organizations which hire Fund Accountants may have changed, the demand for fund accountants is steady.

Compensation typically would consist of an annual salary with a small bonus.

External environmental factors impacting the role

Demand

Compensation