How worth is an Actuary designation (FSA) in the world of finance ?

[MonteCristo]

Hello,

I would be pleased if some recruiters and expercienced people could answer to this question : How worth is an Actuary designation (FSA) in the world of finance, and especially in hedge funds ?
I've passed some actuary exams during my Major in maths, but the road to the fellowship is still long.. and I wonder if it worths. Actually I'm enrolling in a MFE program and I've found that the PRM designation is relatively quick to prepare compared to actuarial exams.

 

[PennyLess]

Not very worthy. Why would hedge funds want to hire actuaries when actuaries specialize in insurance? If you want to get into a hedge fund, go for a top MFE.

I know a couple of FSAs that work for banks and funds, but many of them work in roles related to actuarial, such as liability-driven investing (LDI). LDI is about creating strategies to generate returns that outperform your liability benchmark, therefore earning a spread; at the same time, hedging your assets and liabilities against the same market factors (ie, duration matching).

The actuarial credentialing process is actually a very very long and expensive one, and is usually difficult to persue without employer sponsorship. If you have only passed 1 or 2 of the preliminary exams, you do not yet have an idea how difficult exams get at the end. The track-specific exams at the end take 400-600 hours of studying entailing 3000 pages of technical syllabus each. This effort is not worth it if you are thinking about using it to get into hedge funds. The CFA would actually have relevance for certain hedge fund jobs if you want a credential to pair with your MFE degree.

So if you haven't gone far into the process and know clearly that finance is where you want to be, don't bother taking further exams.

 

[MonteCristo]

Not very worthy. Why would hedge funds want to hire actuaries when actuaries specialize in insurance? If you want to get into a hedge fund, go for a top MFE.

I know a couple of FSAs that work for banks and funds, but many of them work in roles related to actuarial, such as liability-driven investing (LDI). LDI is about creating strategies to generate returns that outperform your liability benchmark, therefore earning a spread; at the same time, hedging your assets and liabilities against the same market factors (ie, duration matching).

The actuarial credentialing process is actually a very very long and expensive one, and is usually difficult to persue without employer sponsorship. If you have only passed 1 or 2 of the preliminary exams, you do not yet have an idea how difficult exams get at the end. The track-specific exams at the end take 400-600 hours of studying entailing 3000 pages of technical syllabus each. This effort is not worth it if you are thinking about using it to get into hedge funds. The CFA would actually have relevance for certain hedge fund jobs if you want a credential to pair with your MFE degree.

So if you haven't gone far into the process and know clearly that finance is where you want to be, don't bother taking further exams.

Hi, thanks for replying so, you seem to be familiar with actuarial exams, are u already an actuary ? in which field do you work ?

 

[SYau]

I work for the largest actuarial consulting firms. It is not worth the time/effort/money to get FSA if you want to do quant/finance.

 

[PennyLess]

Hi, thanks for replying so, you seem to be familiar with actuarial exams, are u already an actuary ? in which field do you work ?

I have four years of actuarial experience since graduating from college. I am a newly minted FSA (just got it last week). I work in consulting, with experience mainly in life/health insurance but have also done a year of consulting for a bank on Wall Street on risk-based capital. I took the investment track exams (in case you are not familiar with tracks, the track-specific exams are exams 8 and 9).

I am actually leaving my employment to pursue a full-time MFin in July since I find myself more interested in the asset side. If I get to choose again in college, I probably would have done an MFin or MFE directly after college instead of spending thousands of hours studying for actuarial exams. The time could have well been used for drinking and partying. I guess I will just do more of that in graduate school. :p So whenever I see people contemplating taking actuarial exams with a goal of NOT working in actuarial, I would convince them to save the thousands of hours for other more useful stuff.

 

[Tsotne]

There are overlapping subjects for actuarial programs and MFEs. So you are free to apply those subjects as both - theoretical knowledge and proven (e.i. "certified") educational background while getting into industry.As for Hedge-Funds, actuarial knowledge is not that much worthy to spend time on. So, while being applied in different parts of pure finance, mainly actuarial techniques are of big value for insurance specific issues than finance specific ones.

 

[MonteCristo]

There are overlapping subjects for actuarial programs and MFEs. So you are free to apply those subjects as both - theoretical knowledge and proven (e.i. "certified") educational background while getting into industry.As for Hedge-Funds, actuarial knowledge is not that much worthy to spend time on. So, while being applied in different parts of pure finance, mainly actuarial techniques are of big value for insurance specific issues than finance specific ones.

Don't you think it is good to have two skills in two different industries so as to have a job security ?

 

[Tsotne]

Don't you think it is good to have two skills in two different industries so as to have a job security ?

How easily attainable it is do you think? Having many skills kinda resists the idea of mastering any of them. For you particularly, evaluate how hard it is in your case to get the job security as well as actuarial and financial engineering skills.