Despite the pandemic, the demand for investment accountants continues to outpace the available talent pool. For those who are looking to begin or advance their careers in this field, here is a career guide, with the latest market data and salary structure.
What is investment accounting?
Investment accounting includes analyzing the information for portfolio valuation, preparing client investment statements, preparing financial statements as per U.S. GAAP, IASB/IFRS, or National Accounting Standards, and other reports such as FINRA FOCUS reports, fund valuation (net asset value) reports net capital, and FINRA FOCUS reports, and other similar reports. Investment accounting is responsible for recording all institutional investment transactions and maintaining the relevant custodian accounts.
What do investment accountants do?
Portfolio managers and brokerage firms hire investment accountants to manage stocks, bonds, and other investments. These individuals work for several customers or as dedicated account managers for a single investment firm. Investment accounting jobs are very demanding, with analysts working 100-hour weeks on an average. We have outlined some critical responsibilities for investment accountants below:
Monitoring client investments
Investment accountants keep track of and maintain client investments. They must be aware of the rules and regulations governing the management and reporting of investments in their respective states.
Tracking activities of third-party
Investment accountants keep track of third-party activities involving their clients’ or firms’ investments. Others’ investment behavior can have an impact on a client’s financial situation.
Managing debt investments
Investment accountants are also responsible for managing debt investments. An example of debt investment is a bond or a bank loan, which is often more stable and predictable than an equity investment.
Consulting and advising
Some investment accountants in senior positions advise brokers and asset managers on financial matters. They provide information about taxes, accounting, and financial services and products.
How much do investment accountants earn?
There is strong competition for these positions, with high compensation for a high profile work. According to the ZipRecruiter statistics report from 2021, investment accountants earn an average of USD 65,650 per year. To be precise:
- Analysts’ average pay per year ranges from USD 100,000 to USD 150,000 (base salary plus bonus)
- Associates’ average pay per year ranges from USD 150,000 to USD 300,000 (base salary plus bonus)
- Vice President/Director/Managing Director salaries range from USD 300,000 to USD 1,000,000 per year.
What are the typical career paths for an investment accountant?
Investment accountants should have a bachelor’s degree in finance, law, business, economics, or a related discipline. Associates and analysts are the two most common entry points into investment banking careers:
- An analyst is often expected to stay in their post for two to three years before being promoted, returning to business school, or moving on to something new.
- Analysts who perform well in their jobs can be promoted to associate posts, but they usually need a master’s degree or credentials first.
- Associates take on greater responsibility quickly and are promoted quickly. Both professions necessitate advanced financial modeling and presenting skills.
How to learn investment accounting skills?
It’s critical, to begin with, a firm grasp of accounting concepts. Following that:
- Individuals seeking investment accounting careers should have completed a solid excel crash course, which will teach them the fundamentals of Excel, including formulas, shortcuts, and functions.
- Present and potential investment accounting professionals can go on to financial modeling classes, which will be the foundation of their day-to-day work in investment banking. They will learn about numerous industries and view several types of models by taking these classes.
- Professionals can earn investment and management accounting certifications from several institutions such as The CFA Institute and Chartered Investment and Management Accountant Institute.
By earning these certifications students and professionals will be able to learn about the in-demand industry knowledge, build confidence, and have hands-on practice to work with different software required in financial analysis, allowing them to stand out from the competition and become world-class investment accountants.