Collateral is a very old system of payment default, first introduced hundreds of years ago. However, the concept of collateral management is relatively new and pioneered in business as recently as the 1980s. Before this time, there were no real established procedures on collateral, nor any legal standards. Calculations for appraisals were also surprisingly casual. Standardization happens in the mid-1990s, and there has been a market for it ever since.
The collateral manager is an expert in collateral and real estate appraisal and also provides managerial expertise to others. The position commands a yearly salary as high as $123,000 per year, at least according to HR reports from the Certified Compensation Professionals survey. The job of a collateral manager is to oversee the daily operations of the company’s collateral function appraisals. This means he/she analyzes the valuations and attempts to minimize loss for the company. For very high-priced properties, the manager will sometimes conduct the appraisal personally.
What Role Does Management Play?
Collateral management is actually involved in a variety of parties, including the manager and staff members who calculate valuations, those who deliver the collateral and who receive it, as well as those who maintain the records. The manager exercises control over all aspects, approving requirements and establishing trading relationships. The manager also works with credit departments and processing.
The movement stage involves recording all details of collateral transactions in modern software systems. Special care is required to check for state-compliant policies, matters of disputes, and even the custodial end of keeping the collateral property. Other duties include margin calls, dealing with substitution requests, and processing receipts.
The Career Expectations for Collateral Managers
Collateral managers are expected to be highly educated, as they will be assuming responsibility right away. A bachelor’s degree is the minimum level of education employers look for, though work experience is just as important. Eight years of field experience or managerial duty is required, since this is a senior level position. Furthermore, companies expect you to be familiar with the industry’s practices, including procedures and common goals. They want a professional who can lead a staff of workers while also taking orders from top-level management or senior manager. This job does require creative thinking as well as a flexible mindset.
Your skill set should focus on a thorough understanding of the profession, including company policies and procedures, as well as fundamental knowledge of accounting, business and economy. Social skills are important in this career field, since you will be working with others, explaining appraisals, and oftentimes serving as a go-between of buyers and sellers and lending companies.
Now is the time to set into motion a lifelong career plan. Educate yourself early on and acquire work experience so that you can build a resume. By the time you finish with education, licensing and certification, you will have built a persuasive application that’s hard for an employer to turn down. A college or university can help you set down that path and move confidently towards your end goal.