Day in the life of a Fund accountant (How is fund accounting as a job)

For those of you wanting to get started in the world of finance and or looking for a career change working as a fund, an accountant might be a good start. In this article, I try to share my experiences working as a fund accountant, what to expect from the job, and some career prospects if you wish to make it a career. I will explain what the day-to-day activities are like for the people who wish to know more.

Work Timings:- 

I worked at a large European bank as a fund accountant under the Paris domain in Chennai for a little over a year. My job timings were from 12:30-9:00 IST (an hour earlier in case of daylight savings time). It’s 5 days a week affair, with almost all of your weekends being free from work.

A note on the timings: – Your mileage may vary as different regions function according to their respective time zones. However, 9-10 hours is a good average to go about as to how long your day would be with the exception of year-end closings, more on this later.

Salary:-

For an entry-level position with no experience, you can expect anything between 2,50,000-3,25,000 this usually seems to be the average with the pool of associates I talked with.

As your experience increases, your salary does go up, but for a higher CTC, you would have to switch companies as your hike is usually around 10%.

Bonus:- Your bonus can be a nice boost in addition to your salary, but where I did work the bonuses were less, but worry not as other people working at American banks have reported much higher bonuses in comparison, so that might be a point of consideration for you.

Training Period:-

My training period was around 2months, this includes classroom training and the job, where a senior accountant would train you and help you manage funds.

Skills I would recommend you know before you apply, including excel and word as well as being knowledgeable on the capital market as well as current affairs.

What is the workflow/ what do I do?

To answer it in simple words we as fund accountants calculate the Net asset value (NAV) of the funds, to be published in the market after client approval ( client usually being the fund manager of the fund). This value is used by investors to subscribe(buy units)/ redeem(sell units) in the fund.

The accuracy of this value is extremely important as any deviation will result in a big financial impact as the value of the transactions is quite big.

So the workflow is usually like this:-

The day is divided into 7-time slots, each having its own funds to be calculated and delivered. This usually will not exceed 15-18 funds a day.

Reconciliation:- The stock, shares, and cash position held with the fund and depository should be the same, reconciliation ensures this, and any breaks in this are investigated and corrected before the NAV is calculated.

Pricing:- The securities in the fund are checked for any abnormal price variations, in which case Bloomberg is usually used to check for discrepancies in price.

Some things to note we deal with a variety of funds (master-feeder, multimanager, funds with exotic instruments, etc.) while the process remains the same there are some unique differences for each fund type.

Accounting: – After reconciliation and pricing, we go ahead and account the fund, after which you use an exception management tool to check for any warnings/errors thrown by the tool. I can’t state the importance of this step as this is your last line of checks before the fund is dispatched to the client.

How an average day looks like: –

12:00 PM (An hour early when daylight savings sets in)

My day usually starts at around 12:30-1 PM with me getting to work, getting settled down, and having a look at my funds assigned to me for the day as well as replying to any pending emails. This is usually the time when we take part in the group huddle on the floor to discuss events of the day, some important things to be noted, etc.

12:30 PM

This is when I start getting into performing reconciliation activities for my funds of the first lot, followed by pricing and accounting. If all goes to plan the fund can be sent 30 mins in advance to a double-checker who further checks the fund before sending it to the client (This checking is performed for all funds to minimize errors).

1:30-2:00 PM

LUNCH!!!

2:00-3:00 PM

My second lot funds would be done during this period, repeating the process followed in the first lot. Some sense of monotony does set in as you go about your days, but this quickly goes away as the more complex the funds the more things to check/get to learn.

3:00-4:00 PM

The third lot of funds are calculated. A sense of urgency usually sets in during this time as any problems have to be dealt with quickly, otherwise, it may result in subsequent time slots getting delayed.

Of course, there are days when things don’t go as planned, during those days I suggest a bit of patience as dealing with these problems will, in turn, lead you to learn more and get better at problem-solving

4:00-5:00 PM

This is the last lot of funds before a break, we have a supervision team present at the spoke location who are in direct contact with clients, the importance/help provided by these members cannot be understated, with each of them not only being incredibly helpful but also with a breadth of knowledge.

5:00-6:00 PM – Break

Any pending funds to be calculated/ any other emails to be replied to are taken care of doing this break. As you usually get a breather doing this period to either go have a snack or continue with other miscellaneous tasks.

6:00-7:00 PM

The last 3 lots of funds usually end up being less taxing although there are exceptions to this.

7:00-8:00 PM

You end up sending the funds as the day goes on, as well as keeping an eye on the funds already sent, if they are validated by the client, then it usually is all well and good but when there is a rejection a need arises to find the root cause for the problem to find a solution.

While rejections can be annoying especially at the flag end of the day, the people I worked with and especially my trainer were incredibly helpful and were always willing to lend a helping hand.

8:00-9:00 PM

Finally, we come to the last lot, these funds are arguably the easiest of the bunch. Any pending funds are also sent during/after the final lot is completed.

9:00-10:00 PM

DINNER!!! As long as all your funds are sent without any issues, your work is complete or the day and you are free to leave by 09:30-10:00 PM. But if there is pending NAVs to work on the day keeps dragging on sometimes as late as 12:00 AM.

Year-end: –

Year-end closing is done for the funds as per the specific 12-month period followed for that fund. The majority of funds did have December as their year-end and this activity is usually time-consuming and lasts for a week, during this week be prepared to spend extended hours of time working late.

For those of you who want to know the nitty-gritty read on.

Reconciliation: – A fund holds three aspects stock, shares (units), and cash position. The idea here is that at the end of each NAV the fund’s entire positions should match with the positions held by the depository participant (DA). There may be a variety of reasons this might not be true, one of the main reasons is settlement being done on a T+2 basis. You will liaise with the reconciliation team for breaks that are not identifiable.

Cash breaks pose a particular problem as this will require you to further investigate the root cause of the break before proceeding with the NAV, there are tools available to help you in this matter but they usually are the hardest to resolve.

Pricing: – Pricing in its majority was taken care of by its own team. The process only required us to check for any unusual variations either due to market spikes, corporate actions such as a stock split, or verify with a client file.

This is usually the least time-consuming as most of the work is pre-done requiring you to only have a re-check before proceeding.

Accounting & exception management:- As far as accounting your fund goes it’s automated and nothing is required on your part. Exception management is usually where all your attention is required, this is the final checkpoint before the fund is sent to the client. The software will show exceptions which you are required to justify with a comment.

Most are easy and you have a set process, but funds with higher complexities do come with their own problems, but it’s nothing too much as after a few days of working on it you will become accustomed to it.

Special events: – These events include liquidation of a fund, merger, management fee changes, dissolution, etc. At the end of each of these events usually, a checklist is required to be filled.

The nature of how you process each event changes quite a lot but there is a standard operating procedure and looking at previous processing of similar transactions would give you a rough idea of what to expect. Nevertheless, these activities are not too often and usually are time-consuming.

Fund categories: – Funds ranging from your ETF, funds with swaps, funds based on specific events, funds with feeder structures as well as funds having multi-manager specialties. These constituted the most fun aspect of the job for me, each fund variety would differ in some key aspects but the basics remain the same here with one or two aspects changing.

For example, feeder funds would have the price of the security in them linked with the master funds, ETF’s track an index/benchmark like the S&P 500, Funds having only debt instruments like bonds in them, etc. You will get to learn a lot more as and when you work on different variety of funds. Not to fret appropriate on-the-job training will be given before you start and help is usually always available from seniors and managers.

Client interaction: – The client interaction is handled in its entirety by the on-shore team. The requests are passed on to you through the members of the on-shore team.

These can vary very widely with something as simple as wanting the fund earlier or having a specific trade included to specific instructions that have to be followed for special events that were mentioned above. It is good to keep note of what certain clients expect when the funds are delivered to them.

A small note on the software used. I won’t be naming them here. However there is a global fund accounting tool that will be your go-to, you will spend more than 85% of your time with this. As you spend more time working, you will get the hang of the tool and the different menus. There is a separate tool for reconciliation as well as accounting and exception management.

As a final point as a member in the fund accounting domain, you will also have the pleasure of interacting with members of various other departments to a level that others may not have. From the transactions team to the pricing team, you will work together with them to deliver the NAV to the client. Either it may include a transaction in a fund or price security according to a different file or making sure a new swap inception is priced accurately, the support provided by the supplementary teams is often understated.

Conclusion: –

During my time as a fund accountant, I learned a lot of stuff relating to what goes behind the scenes on the operational front of a fund. In my opinion, being a fund accountant was a very interesting and enjoyable position to work in, even though at times the operational nature of work causes some monotony.

A career as a fund accountant could either be a stepping stone into other aspects of finance or in and of itself would be a great proposition for any college fresher who is just starting out in the world of finance.

Hope this guide on how a day in the life of a fund accountant was useful or at the least an interesting read. If you did find this interesting, do consider joining my newsletter below the post, this ensures my upcoming articles will directly be delivered to your mailbox.

If you do have any further questions or any other topics that you would like me to write do comment on the post below or send me a mail at contactme@makinit-personal.com.

P.S

Nakul