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Interview with the MBA in FINANCE Graduate Melody R.

Interview with the MBA in FINANCE Graduate Melody R.

A Day in the Life of MELODY R., Account Manager for an institutional investment management firm, Los Angeles area, California, U.S.

What I Do

My firm manages fixed-income portfolios, such as retirement plans and endowments, on behalf of large institutional investors.

I work with clients, typically the chief financial officer or the chief information officer and their staff, to develop investment strategies within the fixed-income (bond) markets and to structure products that meet their goals.

I am constantly monitoring my clients’ investment portfolios against these goals and communicating performance results, changes in strategy, or new investment opportunities.

One of the surprises in this job was that I have used more accounting than I anticipated—interpreting financial statements on the bond side, tracking the impact of discount rates on pension plans, and things like that. I didn’t take the easy road, I quit high school too early and had to earn my GED diploma first. The rest is history.  If you, like I did, want to get ahead in life but, for whatever reason, couldn’t finish your high school education, get your GED and go to college! There are great online practice tests provided by the online platform to get you on the right track.

I am also constantly challenged by the need to effectively and clearly communicate our strategy to clients. This is often harder than developing the strategy in the first place!

What I Enjoy Most

I love the financial markets. The markets and the investment opportunities within them are always changing, which appeals to me. I also enjoy helping to shape my firm’s global economic outlook, which is a key component of our investment process.

Specifically, the direction of the global economy has broad implications for fixed-income markets—such as interest rates, expected growth rates in the United States and abroad, relative strength of currencies, etc.

Thus, shaping our outlook on each region of the world is the obvious first step in structuring our portfolios.

As an undergraduate economics major, I appreciate the intensity and evolving nature of the economic discussions among my colleagues and with our clients.

What I Enjoy Least

There are administrative tasks associated with running large amounts of money for clients, such as coordinating back-office activities and monitoring portfolios for accounting or reporting irregularities on a global scale.

I spend about 20% of my time doing tasks that include:
1) working with our accounting, pricing, and performance teams to review every holding in a portfolio when our reported performance is markedly different than that reported by the custodian bank, and
2) completing monthly performance attribution and researching the cause of portfolio performance that is more or less than expected.

Why I Chose This Career

I went back to business school with a focus on the fixed-income markets. After reading Peter Bernstein’s Against the Gods, I was instantly hooked by the measurement and management of risk as described in historical detail in Bernstein’s book.

I knew then that I was interested specifically in investment management rather than working in the transactional environment of an investment bank.

At business school, I studied financial engineering with the intent of gaining insight into risk management and portfolio management. I enjoy macroeconomics and long-term approaches, so this is a more macro- rather than a micro-level view of the financial markets.

Desirable Traits to Be Successful in This Career

Potential bond managers should be eager to understand and analyze fixed-income portfolios as well as develop strategies that will generate excess returns. There is no formula for this, and constant innovation is required.

As an account manager, you also need to be good at explaining these technical details to clients in a way that makes the information useful to them.

At my firm, this is what distinguishes my role from that of a portfolio manager. The account manager is the one who engages clients in discussions about the firm’s strategy and how economic and financial developments will affect their portfolios.

It is also helpful to have some experience or interest in interpreting and applying macroeconomic developments.

Words of Advice If You Are Considering This Career Path

Stay very involved with what’s happening in the financial markets while you are getting your MBA. It’s easy to get so busy that you fall out of touch with the outside world, and you can’t [afford to] do that.

As an illustration, very often in a conversation with a client, you will be expected to reflect on the past and apply it to current events in the financial markets or speculate about whether that previous scenario might be relevant today.

Track the macro-level global trends, such as political changes, medical breakthroughs, and changing industry dynamics. All of these things matter in developing investment strategies.

For understanding global trends and who the players are, I recommend reading the Economist and Barron’s. Of course, the Wall Street Journal is also necessary reading, especially when you are in school and not directly involved in the markets on a daily basis.

Employers in this industry are looking for people who are fascinated by the markets and economy, so they expect you to know what the Federal Reserve Board is doing, even if you had two exams that week!

Also read Fortune or BusinessWeek, and stay on top of the sports news, because almost every client has a favorite team.

What I Did Before This (Including Pre-MBA and Post-MBA Jobs)

I had an investment banking internship and six years of investment banking experience before going to Sloan for an MBA.

After my junior year of college, I interned on Wall Street with Salomon Brothers in the corporate finance department. I joined them after school and worked there for almost three years in the capital markets group. Next, I moved to Deutsche Bank to help build their domestic capital markets function.

By the time I went to school again, I was pretty sure I was done with the transaction side of the business. After a summer internship with my current employer, I joined the firm full-time after graduation.

Educational Background (Undergraduate, MBA, Other)

  • MBA, MIT Sloan School of Management, financial engineering, 2011
  • bachelor of science development economics, City College of New York, 2003
  • GED SUNY, 1998

In MBA Programs, I’d Suggest You Look For…

A strong program related to what you want to do. For example, the financial engineering track at Sloan was more quantitative than programs at other
schools. This appealed to me, given my interest and previous experience. I knew that I needed to gain more experience in quantitative methods to enhance my market experience.

For example, I took courses on options, investments, and econometrics, which included frequent guest lectures from various practitioners in those areas. Consequently, the classes taught me the fundamentals while keeping me abreast of the latest industry developments.

I also wanted smaller classes, which ruled out some schools right away. This more intimate setting enhanced the professor-student relationship, and I was able to get a lot of individual attention from world-renowned professors; those relationships continue even today.

A global student body was important to me—again, to help me keep and develop a macro view and to develop firsthand knowledge of different cultures.

My takeaway about the MBA experience is that your learning comes 50% from your classmates, 25% from coursework, and 25% from what you learn about yourself in the process—your values, your strengths and weaknesses, how you work in a team, and how you perceive and market yourself in the job search.