From this post onwards I am planning to write on different job profiles available in Finance.

This is a job guide about Account Executive Mortgage & Banking.

What you as a career aspirant need to know about account executive mortgage and banking is its job description, salary offered, employment prospects, education and training required for this job, experience, skill sets required and how to enter this territory.

Job Description 

The mortgage account executive’s main job is to develop and manage the national or regional sales activities of a mortgage broker network or third party channel. Account executives are supposed to have general knowledge of all loan products and guidelines because they need to provide advice and assistance to approved and prospecting brokers.

In mortgage banking, the account executive works as a mediator between mortgage brokers and financial institutions. He is required to generate loans through mortgage broker network. Account executives should be able to analyze the broker’s case whether he meets the expectations. Account executives are responsible for building relationships with mortgage brokers, correspondents and banks within a specific area to maximize sales revenue.

Account executives’ job is to develop relationships with wholesale loan customers in order to provide valuable advice about bank products, rates, fees and analysis. Account executives in mortgage also need to cross sell and provide market data to management.

Account executives in banking manage all current accounts and potential leads in assigned geographic region. He is responsible for all wholesale/broker account maintenance and development in his region. Other duties include—developing list of accounts and following up regularly to ensure client satisfaction, analyzing account potential and profitability, calling on accounts to make presentations on loan programs and services, recommending additional products or functionality that will assist in growth and profitability of the area, developing account closing and growth strategies.

The account executive should be in regular contact with sources of loan production, correspondent financial institutions or mortgage brokers for smooth flow of loan applications and closed loans.

Salary

Account executives receive basic salary plus commissions. The average salary for wholesale mortgage account executive jobs is $91,000. The salary can vary greatly due to company, industry, location, benefits, experience, qualification and market conditions..

I am giving below the chart that indicates average salary of jobs with related titles.

(Source: Simply Hired)

Job Prospects

According to US Bureau of Labor Statistics, nearly 9 out of 10 loan officers work for commercial banks, savings institutions, credit unions, and related financial institutions.

Good job opportunities ate expected for mortgage and consumer loan officers and excellent opportunities are expected for commercial loan officers. Employment of loan officers is projected to grow 10 percent till 2018, which is average for all the occupations. Employment growth will be driven by economic expansion and population increases,the factors that drive demand for loans.

College graduates and those with banking, lending and sales experience will have the best job prospects.

Career Path

You can progress in your career by achieving and exceeding sales targets. Area Manager or District Manager is the next post in career graph. You can also take a position in a larger mortgage company with higher base compensation, commission revenue and other employee benefits.

Education and Training

Four-year college degree in business, marketing or finance is required(BS/BA). You also need to have working knowledge of residential mortgage loan, deal structuring, underwriting, wholesale or correspondent lending business or secondary market knowledge. Recent federal legislation requires that all mortgage loan officers be licensed.

Skills

Two to five years experience in mortgage lending products selling is required. Subprime mortgage production knowledge is required. Ability to make marketing presentations, ability to analyze and evaluate sales situations,

You should be good at working with others, confident, and highly motivated. You should be willing to attend community events as representatives of your employer.

Excellent interpersonal and account development skills and strong desire to succeed are must for this job. Proficiency with MS Office is must.

Work Environment

This job involves considerable work outside the office. They need to carry their laptop and cell phones with them to attend client meetings and keep in touch with their managers. They often work out of their home or car, visit client offices to complete loan applications.

They work a standard 40-hour week. But, this depends on the demand for loans as sometimes they need to work for 60-hours per week if they take more customers.

How You Can Start

If you want to make a career in this field, then here’re some tips:

1. Visit bank websites and fill up online application form. For more details, check top job hunting methods.

2. Business networking is must—you can visit local or state chapters of mortgage banking or broker associations that can lead to opportunities in this field.

3. Experience in marketing and sales is must for this field. Try gaining this experience first.

Best Resources

Books:

1. Your Successful Career as a Mortgage Broker

2. Getting Started as a Commercial Mortgage Broker: How to Get to a Six-Figure Salary in 12 Months

3. Jump Start Your Mortgage Career: A Proven Plan For Loan Officers And Mortgage Brokers Who Want To Skyrocket Their Income in 30 Days

4. The ABC of Sales: Lessons from a Superstar 

5. The Complete Guide to Becoming a Successful Mortgage Broker: Insider Secrets You Need to Know

6. The High-Income Mortgage Originator: Sales Strategies and Practices to Build Your Client Base and Become a Top Producer

Videos

1. What’S Up In Finance

2. Accounting and Auditing Careers

Online Training Program

1. Financial Modeling ProgramsSimilar Posts:

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In previous article we saw how to edit/delete individual cells. In this post,we will see how to insert/delete a row or column.

 - To insert a row, first select the row before which you want to add new row(s) by pressing Shift+Spacebar.  

Once the row is selected, use Alt+I+R to insert new row(s).

- Now, we will see how to insert a new column. First select the column before which you want to insert new column(s) by pressing Ctrl+Spacebar . 

- Once the column is selected, use Alt+I+C to insert new column(s).

Like mentioned in previous post, it is a bad practice to insert or delete individual cells as your entire worksheet can get disturbed. So always deal with entire rows or columns instead of individual cells.

Now, we will see how to delete entire row or column.

To delete a row or column, select the entire row (using Shift+Spacebar ) or column (using Ctrl+Spacebar ) and press ALT+E+D . ALT+E+D deletes the entire row or column.

So this is how we delete rows/columns.

Next very important key which we use very frequently while working in investment banking is F4 key. What F4 key does is, it repeats the last action that you performed.  

For example, if you have deleted any column using ALT+E+D, and again you want to delete some more columns, then you just need to press F4 key to repeat the delete action.

So, these were the shortcut keys to insert/delete rows and columns in excel. Now, we will proceed with the sample exercise. As always, try doing this exercise with the shortcut keys mentioned above.

Sample Exercise

1. Create an excel sheet with data on similar lines given in the sceen shots. Delete the extra rows and columns.

2. Insert a new customer row before an existing customer.

3. Insert new column Order Date before column Product Type.

Become Excel and financial modeling expert.

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Diversification and Beta 

We diversify the portfolio to reduce total risk. By doing this, only systematic risk remains. Beta is used to measure systematic risks. A conservative investor would look for beta of 0.5 whereas an aggressive trader would look for the betas around 1.5. If one is looking for reducing total risk, he should go for good diversification strategy instead of lower betas.

Capital Asset Pricing Model 

In finance, the Capital Asset Pricing Model (CAPM) is used to determine a theoretically appropriate required rate of return of an asset, if that asset is to be added to an already well-diversified portfolio, given that asset’s non-diversifiable risk. The model takes into account the asset’s sensitivity to non-diversifiable risk (also known as systemic risk or market risk), often represented by the quantity beta (β) in the financial industry, as well as the expected return of the market and the expected return of a theoretical risk-free asset. 

The model was introduced by Jack Treynor, William Sharpe, John Lintner and Jan Mossin independently, building on the earlier work of Harry Markowitz on diversification and modern portfolio theory. Sharpe received the Nobel Memorial Prize in Economics (jointly with Markowitz and Merton Miller) for this contribution to the field of financial economics. 

The CAPM is a model for pricing an individual security or a portfolio. For individual securities, we made use of the security market line (SML) and its relation to expected return and systematic risk (beta) to show how the market must price individual securities in relation to their security risk class. The SML enables us to calculate the reward-to-risk ratio for any security in relation to that of the overall market. Therefore, when the expected rate of return for any security is deflated by its beta coefficient, the reward-to-risk ratio for any individual security in the market is equal to the market reward-to-risk ratio. 

The Capital Asset Pricing Model (CAPM) represents the relationship between the expected risk and expected return. 

Assumptions of CAPM

All Investors: 

1) Aim to maximize utilities. 

2) Are rational risk-averse. 

3) Are price takers i.e. they can not influence prices. 

4) Can lend and borrow unlimited under the risk free rate of interest. 

5) Securities are all highly divisible into small parcels. 

6) No transaction or taxation costs incurred. 

Application of CAPM requires following inputs: 

1. Risk-free rate

2. Market Risk Premium

3. Beta

1. Risk-free rate

The risk-free rate is the return on a security or even a portfolio of securities which is void of default risk and is not interrelated to returns from anything else in the economy. In theory, the best estimate of the risk-free rate is the return on a zero-beta portfolio. However, constructing zero beta portfolios is an expensive and complex affair and hence they are mostly unavailable for risk-free rate estimation. 

Two alternatives are most commonly used in practice:

1. The rate on a short-term government security like the 364-days Treasury bill.

2. The rate on a long-term government bond with maturity of 15 to 20 years.

 Each of the above alternatives has its own pros and cons and the choice depends extensively on the judgment of the analyst. 

2. Market Risk Premium 

The risk premium in CAPM is usually based on historical data and it’s computed as the difference between the average return on stocks and average risk-free rate. In this context, two measurement issues need to be tackled: What should be the duration of the measurement period? Should geometric mean or arithmetic mean be used? 

The answer to the first question is to use the longest possible historical period, lacking any risk premium trends over the course of time. 

Practitioners appear to disagree over the option of geometric versus arithmetic mean. The geometric mean is the compounded annual return over the period of measurement where as arithmetic mean is the average of annual rates of return over the measurement period. 

Determinants of Risk Premium 

The market risk premium is primarily influenced by three factors: 

Discrepancy in Underlying Economy:

Risk premium is likely to be large if the underlying economy is more volatile. For instance, the risk premiums for budding markets, taking into account their high-growth rate and high-risk economies, are larger than that for developed markets. 

Political Risk:

Risk premiums are often more in markets that are exposed to higher political volatility. It should be noted that political instability causes uncertainty in an economy.

 Market Structure:

Risk premium is smaller if the companies listed on the market are large, steady and diversified. Whereas, for small companies listed on the market, risk premium is larger.

 3. Beta

Beta is a relative measure of risk associated with the company’s shares as against the market as a whole. Beta measures the volatility of the stock. When the market is going up, the stocks which have higher betas (more than 1) are preferred and in falling markets the stocks having lower betas (less than 1) are preferred. 

Calculation of Beta 

The calculation of beta may be illustrated with an example. The rates of return on stock A and the market portfolio for 15 periods are given below:

Table : Calculation of Beta

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First,we will see how to edit/delete individual cells.

To insert individual cell, press Ctrl+Shift+Plus keys.

Please note that even though this shortcut can be useful at times, one should avoid using it because it changes the cell alignment in excel. Instead, one should keep the practice of adding entire rows or columns instead of individual cells.

To edit a particular cell, press F2 key. If the cell contains more than one word, then you can use the combination of Ctrl+Arrow keys to skip the words in the cell.

For example, if there are two words “Pune City” in a cell and if you press Ctrl+Left arrow key near the word “City”, then the control skips the word “City” and goes to previous word i.e. “Pune”. 

- While editing a cell, Ctrl+Shift+Arrow keys highlight the word in the cell.

- We can add a new line in a cell by using Alt+Enter.

- To delete the contents of a cell, just go to the cell and press Del key.

Note: NEVER use backspace key for deleting as it creates unnecessary white spaces and distortions.

However, you can use backspace key to delete individual text but not entire cell.

Another way to delete the cell contents is simply press F2 key to get the cell in editable more and then delete whatever is required. 

So these were the shortcuts to edit/delete cells.

Now try solving the sample exercise using the keys mentioned above. 

Now try this:

1. Create an excel sheet with some data, go to any particular row, go to any cell in that row and try modifying data in that cell. For example, in first row, modify the Product Quantity to 20 instead of 10.

2. Go to the Customer name in the excel sheet, delete one Industry  and enter some new industry name there.

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A portfolio manager is a person who makes investment decisions using money other people have placed under his or her control. In other words, it is a financial career involved in investment management. They work with a team of analysts and researchers, and are ultimately responsible for establishing an investment strategy, selecting appropriate investments and allocating each investment properly for a fund- or asset-management vehicle.

Portfolio managers are presented with investment ideas from internal buy-side analysts and sell-side analysts from investment banks. It is their job to sift through the relevant information and use their judgment to buy and sell securities. Throughout each day, they read reports, talk to company managers and monitor industry and economic trends looking for the right company and time to invest the portfolio’s capital.

“How many millionaires do you know who have become wealthy by investing in savings accounts? I rest my case.”
                                                                                                             …..Robert G Allen

Functions of Portfolio Management* 

The nature of portfolio management can be institutional. Mutual funds are a type of portfolio schemes. Many new pension funds have been introduced of late. These funds also must develop a portfolio so that returns may be spawned for the participants. Following are few of the functions of portfolio management: 

1. To build an investment strategy and choose a suitable investment mix.

2. To offer a well-balanced portfolio that will optimize the yields and will also hedge against inflation.

3. To invest some part of the portfolio in tax saving schemes in order to enhance the after-tax returns.

*This is a small list.

Types of Portfolio Management

1. Discretionary Portfolio Management Service: 

In this type of portfolio management, a client hands over his money to the manager for investment purpose. The manager then takes care of all the concerned paper work, makes all necessary investment decisions and provides good returns to the investors. The investor is charged some fee for this service provided by the manager. 

2. Non-Discretionary Portfolio Management Service: 

In non-discretionary type of portfolio management service, the manager operates as a counselor, however, it is up to the investor whether to accept or reject the suggestion provided by the manager. Also, the paperwork and related formalities are taken up by the manager for a service charge. The manager focuses on stock market instruments with a portfolio that is customized for the risk taking capability of the investor. 

Through this article, you must have understood how important the portfolio management is for individuals and companies too.

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