A financial project manager oversees projects for companies and corporations that have an impact on the

company’s revenues. Nearly every firm or organization employs a financial manager to prepare financial
reports, create cash management strategies and direct investment activities. In many cases, the project manager
plays a key role in developing the long-term financial goals of a company or organization to ensure a profitable
future for the firm.

The daily tasks of a financial project manager will vary based on the current projects and even the industry of
the company. In some industries, he or she will be tasked with the role of controller and oversee the production
of financial reports, such as balance sheets, expense reports and income statements. Many times, a certified
financial manager will need to regulate the accounting, business and budget departments to ensure that cash
flow is regulated. One of the chief projects that this person regulates is an organization’s budget, calculating
capital gain, risk and investment funds.

Various industries employ different types of financial managers with titles such as cash flow manager,
financial auditor, controller, credit manager or risk manager. A financial project manager can assume one or all
of these roles, depending on the size of a company and its need to consolidate positions. For example, at a
banking institution, this person typically oversees all financial functions, such as sales, operations, electronic
financial services, mortgages, lending, investments and trusts.

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At many corporations, in order to become a financial manager, it is necessary to obtain a bachelor’s degree or
master’s degree in business administration, accounting, finance or economics. Someone with previous
experience in sales or finance might be more desirable to companies and organizations. An applicant with
strong interpersonal, math and business technology skills also is important for fulfilling the job's duties.

Beyond obtaining a financial management degree at a higher institution, many financial managers seek
certification and a financial management license through a professional program. Applicable programs can
include the Chartered Financial Analyst designation, Certified Treasury Professional credentials and the
Certified Management Accountant designation. In addition to financial management certification, a
professional also can take courses to enhance his or her knowledge of the industry. Many institutions of higher
learning offer courses and workshops that are designed specifically for financial project managers and focus on
corporate cash management, financial analysis, budget management, project management and information
systems.

Understanding Financial Statements and Reports Generally

Financial statements are critical to all business endeavors, whether large or small and whether for profit or not.
There are many different types, largely to align with many different goals. A profit and loss statement, also
known as an income and spending or earnings and expenses report, is one example; another is a balance sheet
or an account balance report. A cash flow report is less common in smaller entities and seldom created by
individuals.

In most cases, the thing that makes a specifically project financial report unique is its scope. All three basic
types of financial statements can be used either broadly or specifically, and all can be included in a project
report if used to detail the prospects or performance of a specific, isolated project.

Specifics of What Project Reports Must Detail

A typical project financial report usually includes a written narrative to inform the reader of the project goals
and progress. This part of the report will also discuss project overruns and problems affecting financial
performance. Reporting about how much money was gained or lost during a particular time period, how that
gain or loss appeared in the various accounts, and how much money came from revenue-generating activities,
investment activities, and loans is also normally included. Much of this varies depending on the project itself,
with longer and more complex endeavors requiring more. The core elements included are usually pretty
consistent, though.

Revenues and Expenses

It’s usually necessary to allocate revenues and expenses very precisely in project accounting. The revenue
must be directly associated with the project, for instance. In most cases the expenses will be categorized in two
broad groups: direct and indirect expenses.

Direct expenses are incurred exclusively due to project activities, such as labor and project supplies. Indirect
expenses are shared with other projects or activities. These include management above the project management
and several support functions, such as quality control or marketing.

Allocating indirect costs is often a bit more complicated. While there are standards for allocation developed by
accounting professionals, these may be open to debate. An example of such a cost debate is the correct way to
allocate a non-project support department manager’s time with several technical people assigned to various
project managers for quality control. If the quality control manager does not actually need to review the work
performed by his employee, whether he should still allocate some of his time to managing the employee due to
the indirect costs of providing office space, hiring, training, and other management costs associated with
making the technical employee available to the project is somewhat controversial — some reports include this
while others do not.

Defining the Larger Scope

Another concern in reviewing a project financial report is the definition of the scope of the project. Projects
often get expanded or rescheduled, or experience a change in funding levels. The statement of work that
describes the work to be performed, the schedule, and the cost need to be revised in a timely manner. This
expanded work activity should be clearly stated in the written portion of the project financial report so that the
effectiveness and success of the project can be clearly determined.

Early history[edit]
Further information: Financial history of the Dutch Republic
The first modern investment funds (the precursor of today's mutual funds) were established in
the Dutch Republic. In response to the financial crisis of 1772–1773, Amsterdam-based
businessman Abraham (or Adriaan) van Ketwich formed a trust named Eendragt Maakt Magt ("unity
creates strength"). His aim was to provide small investors with an opportunity to diversify.[1][2]
Mutual funds were introduced to the United States in the 1890s. Early U.S. funds were generally
closed-end funds with a fixed number of shares that often traded at prices above the portfolio net
asset value. The first open-end mutual fund with redeemable shares was established on March 21,
1924 as the Massachusetts Investors Trust (it is still in existence today and is now managed by MFS
Investment Management).
In the United States, closed-end funds remained more popular than open-end funds throughout the
1920s. In 1929, open-end funds accounted for only 5% of the industry's $27 billion in total assets.
After the Wall Street Crash of 1929, the United States Congress passed a series of acts regulating
the securities markets in general and mutual funds in particular.

 The Securities Act of 1933 requires that all investments sold to the public, including mutual
funds, be registered with the SEC and that they provide prospective investors with
a prospectus that discloses essential facts about the investment.
 The Securities and Exchange Act of 1934 requires that issuers of securities, including mutual
funds, report regularly to their investors. This act also created the Securities and Exchange
Commission, which is the principal regulator of mutual funds.
 The Revenue Act of 1936 established guidelines for the taxation of mutual funds.
 The Investment Company Act of 1940 established rules specifically governing mutual funds.
These new regulations encouraged the development of open-end mutual funds (as opposed to
closed-end funds).
Growth in the U.S. mutual fund industry remained limited until the 1950s, when confidence in the
stock market returned. By 1970, there were approximately 360 funds with $48 billion in assets.[3]
The introduction of money market funds in the high interest rate environment of the late 1970s
boosted industry growth dramatically. The first retail index fund, First Index Investment Trust, was
formed in 1976 by The Vanguard Group, headed by John Bogle; it is now called the "Vanguard 500
Index Fund" and is one of the world's largest mutual funds. Fund industry growth continued into the
1980s and 1990s.
According to Pozen and Hamacher, growth was the result of three factors:

1. A bull market for both stocks and bonds,

2. New product introductions (including funds based on municipal bonds, various industry
sectors, international funds, and target date funds) and
3. Wider distribution of fund shares, including through employee-directed retirement accounts
such as 401(k), other defined contribution plans and individual retirement accounts (IRAs.)
Among the new distribution channels were retirement plans. Mutual funds are now the
preferred investment option in certain types of fast-growing retirement plans, specifically
in 401(k), other defined contribution plans and in individual retirement accounts (IRAs), all of
which surged in popularity in the 1980s.[4]
In 2003, the mutual fund industry was involved in a scandal involving unequal treatment of fund
shareholders. Some fund management companies allowed favored investors to engage in late
trading, which is illegal, or market timing, which is a practice prohibited by fund policy. The scandal
was initially discovered by former New York Attorney General Eliot Spitzer and led to a significant
increase in regulation. In a study about German mutual funds Gomolka (2007) found statistical
evidence of illegal time zone arbitrage in trading of German mutual funds [5]. Though reported to
regulators BaFin never commented on these results.
Total mutual fund assets fell in 2008 as a result of the financial crisis of 2007–2008.

Mutual funds today[edit]

At the end of 2016, mutual fund assets worldwide were $40.4 trillion, according to the Investment
Company Institute.[6] The countries with the largest mutual fund industries are:

1. United States: $18.9 trillion

2. Luxembourg: $3.9 trillion
 3. Ireland: $2.2 trillion
4. Germany: $1.9 trillion
5. France: $1.9 trillion
6. Australia: $1.6 trillion
7. United Kingdom: $1.5 trillion
8. Japan: $1.5 trillion
9. China: $1.3 trillion
10. Brazil: $1.1 trillion
In the United States, mutual funds play an important role in U.S. household finances. At the end of
2016, 22% of household financial assets were held in mutual funds. Their role in retirement savings
was even more significant, since mutual funds accounted for roughly half of the assets in individual
retirement accounts, 401(k)s and other similar retirement plans.[7] In total, mutual funds are large
investors in stocks and bonds.
Luxembourg and Ireland are the primary jurisdictions for the registration of UCITS funds. These
funds may be sold throughout the European Union and in other countries that have adopted mutual
recognition regimes.

Advantages and disadvantages to investors[edit]

Mutual funds have advantages and disadvantages compared to investing directly in individual
securities:

Advantages[edit]
 Increased diversification: A fund diversifies holding many securities.
This diversification decreases risk.
 Daily liquidity: Shareholders of open-end funds and unit investment trusts may sell their holdings
back to the fund at regular intervals at a price equal to the net asset value of the fund's holdings.
Most funds allow investors to redeem in this way at the close of every trading day.
 Professional investment management: Open-and closed-end funds hire portfolio managers to
supervise the fund's investments.
 Ability to participate in investments that may be available only to larger investors. For example,
individual investors often find it difficult to invest directly in foreign markets.
 Service and convenience: Funds often provide services such as check writing.
 Government oversight: Mutual funds are regulated by a governmental body.
 Transparency and ease of comparison: All mutual funds are required to report the same
information to investors, which makes them easier to compare to each other.[8]
Disadvantages[edit]
Mutual funds have disadvantages as well, which include:

 Fees
 Less control over timing of recognition of gains
 Less predictable income
 No opportunity to customize[9]

Regulation and operation[edit]

United States[edit]
In the United States, the principal laws governing mutual funds are:

 The Securities Act of 1933 requires that all investments sold to the public, including mutual
funds, be registered with the SEC and that they provide potential investors with
a prospectus that discloses essential facts about the investment.
 The Securities and Exchange Act of 1934 requires that issuers of securities, including mutual
funds, report regularly to their investors; this act also created the Securities and Exchange
Commission, which is the principal regulator of mutual funds.
 The Revenue Act of 1936 established guidelines for the taxation of mutual funds. Mutual funds
are not taxed on their income and profits if they comply with certain requirements under the
U.S. Internal Revenue Code; instead, the taxable income is passed through to the investors in
the fund. Funds are required by the IRS to diversify their investments, limit ownership of voting
securities, distribute most of their income (dividends, interest, and capital gains net of losses) to
their investors annually, and earn most of the income by investing in securities and
currencies.[10] The characterization of a fund's income is unchanged when it is paid to
shareholders. For example, when a mutual fund distributes dividend income to its shareholders,
fund investors will report the distribution as dividend income on their tax return. As a result,
mutual funds are often called "pass-through" vehicles, because they simply pass on income and
related tax liabilities to their investors.
 The Investment Company Act of 1940 establishes rules specifically governing mutual funds. The
focus of this Act is on disclosure to the investing public of information about the fund and its
investment objectives, as well as on investment company structure and operations.[11]
 The Investment Advisers Act of 1940 establishes rules governing the investment advisers. With
certain exceptions, this Act requires that firms or sole practitioners compensated for advising
others about securities investments must register with the SEC and conform to regulations
designed to protect investors.[12]
 The National Securities Markets Improvement Act of 1996 gave rulemaking authority to the
federal government, preempting state regulators. However, states continue to have authority to
investigate and prosecute fraud involving mutual funds.
Open-end and closed-end funds are overseen by a board of directors, if organized as a corporation,
or by a board of trustees, if organized as a trust. The Board must ensure that the fund is managed in
the interests of the fund's investors. The board hires the fund manager and other service providers to
the fund.
The sponsor or fund management company, often referred to as the fund manager, trades (buys and
sells) the fund's investments in accordance with the fund's investment objective. Funds that are
managed by the same company under the same brand are known as a fund family or fund complex.
A fund manager must be a registered investment adviser.

European Union[edit]
In the European Union, funds are governed by laws and regulations established by their home
country. However, the European Union has established a mutual recognition regime that allows
funds regulated in one country to be sold in all other countries in the European Union, but only if they
comply with certain requirements. The directive establishing this regime is the Undertakings for
Collective Investment in Transferable Securities Directive 2009, and funds that comply with its
requirements are known as UCITS funds.

Canada[edit]
Regulation of mutual funds in Canada is primarily governed by National Instrument 81-102 "Mutual
Funds", which is implemented separately in each province or territory. The Canadian Securities
Administrator works to harmonize regulation across Canada.[13]
Hong Kong[edit]
In the Hong Kong market mutual funds are regulated by two authorities:

 The Securities and Futures Commission (SFC) develops rules that apply to all mutual funds
marketed in Hong Kong.[14]
 The Mandatory Provident Funds Schemes Authority (MPFA) rules apply only to mutual funds
that are marketed for use in the retirement accounts of Hong Kong residents. The MPFA rules
are generally more restrictive than the SFC rules.[15]
Taiwan[edit]
In Taiwan, mutual funds are regulated by the Financial Supervisory Commission (FSC).[16]

Fund structures[edit]
There are three primary structures of mutual funds: open-end funds, unit investment trusts,
and closed-end funds. Exchange-traded funds (ETFs) are open-end funds or unit investment trusts
that trade on an exchange.

Open-end funds[edit]
Main article: Open-end fund