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Finance Careers – Security Pricing Specialist


Name: Jason Richards
Job Title: Security Pricing Specialist
Where: Boston, MA
Employer: Bank of New York Mellon
Years of Experience: 7 years
Education: Eastern Nazarene College, Business Management Degree.
Salary: See PayScale's Research Center for the Average Salary for a Securities Career.

Finance Careers – Security Pricing Specialist

Jason Richards is a security pricing specialist for Mellon Bank. He started at the ground level and is in the process of working his way up. In this Salary Story, Jason explains what public securities markets are and how to make it in Mellon securities careers. He also shares some great advice and stories that would be valuable to anyone working in the stock brokerage industry or pursuing a finance career.

What does a security pricing specialist do?

Jason: This job is considered the operations side of a mutual fund company. Previous to working here, I worked at Fidelity Investments. The operations side is configured of security pricing and accounting for securities held by funds that are in investment portfolios, typically 401k retirement portfolios. Each morning I run a report that shows what new securities were bought by our trading desk, and place them on specific broker or vendor pricing lists. This is to ensure that the bonds are priced on a nightly basis. The fluctuation on a bonds price from day to day affects the NAV (Net Asset Value) of the funds that hold the security. The fluctuation of the NAV on a fund affects the performance of the fund in a portfolio. An individual's portfolio is made up of a group of funds, determined by their retirement goal objectives. Each fund specializes in a certain objective, for instance high risk, low risk, steady growth, and a mix. My job is focused on the pricing of securities that are purchased into a fund. Working for fixed income bonds, we collect prices that are evaluated bids, unlike the traded stock price of an equity. Bonds are considered a debt/credit security, whereas a company issues the bond available to holders (investors) as a "loan" for the company to build or use to grow the company. The company will typically issue the bond with a fixed maturity, and coupon/interest rate that will be paid back to the investors on top of principle. This is how investors make money, and how companies can get money, like a loan, to accomplish growth and objectives for the company.

My job as a pricing analyst is to track the prices on bonds on a daily basis, and check for accurate evaluated prices on bonds with regards to the underlying company’s performance, using good or bad news, as well as credit events. We run multiple reports on all the bonds that BNY Mellon holds. Stale Price Report, Broker vs. Vendor, Trade vs. Vendor, NAV Impact reports, New Buys, Day over Day Strat, and many ad-hoc requests from traders, portfolio managers, and senior management. This is a fast paced, detail oriented job with an ever changing environment. We are subject to monthly audits on our practices to ensure we are following and surpassing the strict SEC guidelines set forth for mutual fund companies. Transparency to the shareholder and investors is the most important aspect in my job. Investors want to know how, why, and where their hard earned money is invested, and what BNY Mellon does to manage their assets with the investors’ best interests as the number one goal.

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What were your steps toward a securities career?

Jason: I started out in finance accounts receivable for Fidelity Capital when I graduated from college. Most graduates have their ideal job in mind after graduation, but the reality is, you kind of go for a job close to what you went to school for. In the finance world, it is hard to jump right into a high paying job right out of school because all companies want to see experience from a candidate. In order to get the experience, you need to start at the basics: accounting and grunge work for low to mid 30’s. It’s tough, painstaking, and way underpaid, but this is the groundwork for a great analyst. In accounting you learn the basic fundamentals of credit vs. debit, and balancing the two. Unless you know someone in the industry, or come from a wealthy family, you cannot avoid this pledging/hazing aspect of the finance industry. I worked accounting for two years, and saw an opportunity to join a pricing group for the equity side at Fidelity Investments. The requirement of course was previous experience in accounting. I had over two years under my belt and they took me on as a beginner level pricing analyst. Pricing equities is considerably easier than pricing for fixed income. Equities are all traded on an exchange and have open prices and closing prices. Besides factoring in the every other day corporate action on an equity and factoring the exchange rate for foreign countries, it’s pretty straightforward. From the equity side, I joined fixed income after two years because I moved out of Boston and purchased a home in NH. Fidelity has its fixed income operations up in Merrimack, NH, which happened to be just 10 miles from my new home. Not wanting to deal with the long commute into Boston, I transferred up to Merrimack, NH, and started a pricing group for fixed income. I enjoyed working for Fidelity, and my personal growth in the company, continuing knowledge, and learning the fixed income field is what motivated me. I have been performing pricing operations for over seven years now, and my next goal is to get over to the research side of the business. With my years of experience pricing out the bonds and equities that were bought into the portfolios, now I want to see the other side. Ultimately, I would like to become a trader.

What do you like about being a security pricing specialist?

Jason:  I like training a newcomer into our group. Based on my experience, it’s a good feeling to bring someone else up in the group. I like it when they ask questions and I can help them connect the dots as to how pricing works and interacts with the rest of fund accounting, and ultimately the trading desk. A story I have in particular stretches over a period of about eight months. I was training a new individual on the morning task of new buys. It is a big task, which only the most senior people are certified to handle. Joe was the person I was training. For the first two weeks he just shadowed me, and tried to take notes, and asked tons of questions. He looked at the task as mission impossible. He would constantly ask me how I knew everything I knew, and told me he could never get to the point where I was, and perform new buys efficiently. I kept encouraging him and pushing him to take on the task. Once you know new buys, you can handle anything. I liked it because it was a challenge for me, and it helped me to revisit the reason why we do what we do with new buys. It was a sense of accomplishment, for both Joe and me, and it helped me to realize just how far I had come as an analyst.

What are some of the challenges you face as a security pricing specialist?

Jason: The biggest challenge I face today is fair valuation from all the subprime junk debt that we are looking to get off the books from the big mortgage crisis meltdown. In general, whenever you come into situation where a bond still has holdings, and you are trying to liquidate it, and there is no market for it, that is the biggest challenge. There is typically no broker, dealer, or vendor that will touch it. The fair valuation methodology that you come up with to price the bond has to be approved by like three to four different committees, the auditors have to sign off on it, and it all has to be 100 percent transparent to the investor. It sounds easy enough, but there are a lot of factors that go into writing up a fair valuation. Another challenge in the job is finding the time to respond to all the multiple, “Priority!” ad hoc requests while you are trying to perform your daily operation tasks, and reporting. Some days it seems there is not enough time in the day and the stress level can get quite high. You need to find a way to remain calm under pressure and execute quick and accurate decisions within minutes most times. Sometimes the environment can get tough to handle; the challenge is finding a way to remain positive while the ship seems to be going down.

Do you have an interesting story about being a security pricing specialist?

Jason: While at Fidelity I was in pricing for a total of five years, and I went through nine managers. It may or may not have contributed to the slow climb up the career ladder for me. With each new manager, they “don’t really know enough about you” to give you that outstanding review mark for merit. Also, with the high turnaround in management, I was constantly the one to train new members into the group, including my last two managers when I was a lead senior analyst. I was offered manager but refused it due to a fixed salary pay, and working the same hours. As an analyst I was hourly and qualified for the O.T. During my time there in pricing I saw the rise and fall of the junk bond, and CDS swap derivatives. I was working at Fidelity at the time when they would almost just hand you a bonus for showing up to work, through the times when they were doing layoffs. It’s interesting to see who you thought would be lifers there, just walk out the door, and those who you thought would leave and move on become lifers there. My buddy Tim who shot up the ladder at lightning speed is a manager now, and pushing unit manager. However, now that he has reached the five year mark, he no longer likes playing the game, and is burned out by the everyday stress. In my five years at Fidelity, it was truly amazing to see the level of responsibility and tasks increase 10 fold, yet pay increases drop by half, with less staff. This is the reality that the world of finance is in right now. It’s kinda gloomy, but hopefully someday soon it will turn back around again.

Do you have any advice for those interested in a career as a security pricing specialist?

Jason: It’s not easy, and you need to have a ton of patience, and a can-do attitude. Also, politics. PLAY the GAME!! Be a YES man/woman. It will help you climb the ladder in half the time. Management will tell you they want to hear your ideas, but in most cases they don’t, and it’s a way for them to weed out who will be a nuisance along the way, and who will just do the task. If you are asked to do something, do it, or even offer to do it, even if it’s the worse task in the group, and do it with a smile. Management remembers the yes people when it comes to review merit time. Even if you do a great job, and are efficient, if you show the slightest resistance on anything, that will be what they remember when it comes to review, and promotions. I have a key example. I was in pricing for four years and a new kid came into the group. He knew the game and played it well. I was an analyst for two years before becoming a senior analyst, and another two and a half years before becoming a lead senior analyst. This kid was promoted to senior analyst in less than a year of joining the pricing group, and then became a lead by two years time. He was a yes man, and entertained the idea of going out for drinks with management after work, and all social outings. That is also key.

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