FSA vs FIA/FFA

[billy idol]

Is it easier to become a Fellow of the Society of Actuaries vs. becoming a Fellow of the Institute of Actuaries (London) or Fellow of the Faculty of Actuaries (Scotland) ?

Anyone know the difference in exam hours ?

[justarrived]

most faculty exams are 3 hours long except some which are 1.5 to 2.5 hrs long.

Difficulty wise - both would be broadly similar. Faculty exams are more depth oriented and I guess SoA exams are more breadth oriented, in general terms.

Faculty has total 15 exams + practice modules for those practicing in the UK + other small business awareness - attendance type modules.

SoA has 8 exams in total.

Both system take about on average 4-6 years to qualify.

[Ailing Factuary]

whoa, does anyone really think people get their FSA in an average of 4-6 years?

[DW Simpson]

whoa, does anyone really think people get their FSA in an average of 4-6 years?

Exam travel time (http://www.actuarialoutpost.com/actuarial_discussion_forum/showpost.php?p=1112986&postcount=67) discussions.

[Mary Hardy]

1. The travel times are not directly comparable. In the SOA, counting starts at the first exam, which is usually taken as an undergrad. In the IoA/FoA counting starts at the first exam which is usually taken after starting work after graduation.

2. The travel time doesn't allow for drop outs. I would guess there are more in the UK who drop out after 4 or 5 exams -- or who drop out with only 1 or 2 to go. My cohort is a long time ago, but only 35% of the people who took actuarial jobs -- ie took the qualification seriously -- ever qualified. The median qualification time of the people who did not drop out was 8 years. Less than 2% qualified in 4 years, I think.

3. I think the median qualification time in the UK would still be >6 years. It may be infinite. However, strong candidates from act sci programs can get through quickly because of the exemption system.

4. I think the UK technical exams are better at finding out what people know, since they don't use multiple choice which is a deeply sucky method. There is more technical material -- the SOA has removed financial mathematics from the syllabus, while the IoA/FoA have beefed it up, made it more rigorous, and added a full exam on stochastic processes.

5. The later UK exams tend to be killers -- like having to take several course 8's. Overall (don't hate me for this) I think the UK fellowship is tougher.

6. There is no separation of life and P&C in the UK. At some reasonably advanced level, all actuaries need to know about life, pensions, investment and P&C.

[no]

5. The later UK exams tend to be killers -- like having to take several course 8's. Overall (don't hate me for this) I think the UK fellowship is tougher.


How do you know this? You have not taken any SOA exams, other than the FAC (The boose fest after a bad movie)? Am I wrong? I can critique any exams in the comfort of my office; but taking it under the exam condition is a totally different thing.

I would believe this statement if it was made by an FSA&FIA, who became an FSA before the mutual recognition agreement.

As for the original post, easiest thing is going through the Australian system. You can become a fellow withing two years after graduation. Once you have that take the FAC, voila, you are an FSA.

[Jack]

4. I think the UK technical exams are better at finding out what people know, since they don't use multiple choice which is a deeply sucky method. There is more technical material -- the SOA has removed financial mathematics from the syllabus, while the IoA/FoA have beefed it up, made it more rigorous, and added a full exam on stochastic processes.



I wasn't aware that the SOA removed financial mathematics (I guess you're referring to exam 230 and 220 and all the 3**V exams). What a dumb ass decision.

The industry is moving to a more principals based approached starting with RBC C3-phase 2 with VACARVM next and some talk about UL and VUL and the SOA is dropping financial math. Even in the absence of regulatory change insurance companies are shorting some very long embedded options giving the company some serious exposure to non-diversifiable risk.

Mary, why is the society trying to dumb down fellowship? Is it to increase membership?

Also did Institute of Actuaries boost these requirements in response to the failure of the Equitable?

[no]

I wasn't aware that the SOA removed financial mathematics (I guess you're referring to exam 230 and 220 and all the 3**V exams). What a dumb ass decision.


You are taking Mary Hardy's scaremongering tactics too seriously. It is the board who screwed up things. Instead of adding one Financial economic (FE)exam, they are changing three preliminary exams. Why not change exam FM to an FE exam*? That way we can keep exams M and C intact at least for five years.


* I do believe that Kellison's book has outlived its usefulness. Nobody, other than exam takers, will use those formulas to figure out quantities in interest theory.

[mr.c]

4. I think the UK technical exams are better at finding out what people know, since they don't use multiple choice which is a deeply sucky method.
Very nice! Which exam covers the application of the "deeply sucky method"? :-P

[Mary Hardy]

How do you know this? You have not taken any SOA exams, other than the FAC (The boose fest after a bad movie)? Am I wrong? I can critique any exams in the comfort of my office; but taking it under the exam condition is a totally different thing.

I would believe this statement if it was made by an FSA&FIA, who became an FSA before the mutual recognition agreement.



Actually, it's worse than you think. I never even took the FAC. However, as an educator and a member of the Board of Governors of the SOA, I am quite involved in the examination system. The course 8 papers and pass rates are public domain information. With enough experience, and with contact with current candidates, I think it is possible to tell how difficult the exams are. I am not demeaning Course 8 in any way, it's a very very tough hurdle.

Your perfect control candidate does not exist I think, since anyone who didn't use mutual recognition would have qualified under a previous exam system one side or the other of the Atlantic.

[Mary Hardy]

You are taking Mary Hardy's scaremongering tactics too seriously. It is the board who screwed up things. Instead of adding one Financial economic (FE)exam, they are changing three preliminary exams. Why not change exam FM to an FE exam*? That way we can keep exams M and C intact at least for five years.


* I do believe that Kellison's book has outlived its usefulness. Nobody, other than exam takers, will use those formulas to figure out quantities in interest theory.

Under the current system, there is no examination coverage of, for example, no arbitrage or the Black-Scholes model, except for candidates in the finance and investment streams.

There is a current proposal to add this material back in 2007 or so. Until then -- no financial economics in the examined curriculum. The proposal has yet to be approved by the Board. Not scaremongering, just facts.

[ginku]

I think the CAS/SOA is tougher to crack for a variety of reasons. One, There is no exam in the CT series that comes any way close to the Exam 3/M.
Another way to look at it: High Actuarial salaries have two major components- rent (scarcity value) and signalling effect (u must be bright since you cleared all those tough exams!). Both increase with difficulty of clearing exams (By raising the bar there are both fewer qualified Actuaries and on the average the signalling effect is greater).
These supply side effects I think dominate the demand side effects due to the high integration levels of all western economies.
Hence, the higher median salaries would indicate that the US Act exams are tougher.

Interesting question: If you believe that the above theory is correct (ask any economist or game theorist for help if you cant understand the argument) would you choose the easy one or the tougher one?
Answers anyone?

[DW Simpson]

High Actuarial salaries have two major components- rent (scarcity value) and signalling effect (u must be bright since you cleared all those tough exams!). Both increase with difficulty of clearing exams (By raising the bar there are both fewer qualified Actuaries and on the average the signalling effect is greater).
These supply side effects I think dominate the demand side effects due to the high integration levels of all western economies.
Hence, the higher median salaries would indicate that the US Act exams are tougher.

I disagree. Higher relative actuarial salaries are more complicated than that, and one needs to look at the individual actuarial disciplines and compare those from across the pond, look at the individual economies, look at who employs actuaries and where they're employing them and how that mix is different between 2 countries, etc.

Comparing actuarial salaries says little to nothing about the relative difficulties of actuarial exams.

[no]

Actually, it's worse than you think. I never even took the FAC. However, as an educator and a member of the Board of Governors of the SOA, I am quite involved in the examination system. The course 8 papers and pass rates are public domain information. With enough experience, and with contact with current candidates, I think it is possible to tell how difficult the exams are. I am not demeaning Course 8 in any way, it's a very very tough hurdle.

Your perfect control candidate does not exist I think, since anyone who didn't use mutual recognition would have qualified under a previous exam system one side or the other of the Atlantic.

I thought, Keith Sharp, was an FIA, before he wrote SOA exams and became and FSA; but you would know better.

[JMO]

Under the current system, there is no examination coverage of, for example, no arbitrage or the Black-Scholes model, except for candidates in the finance and investment streams.

There is a current proposal to add this material back in 2007 or so. Until then -- no financial economics in the examined curriculum. The proposal has yet to be approved by the Board. Not scaremongering, just facts.

This is sad. I would think that actuaries really need to know about financial economics and enterprise risk management right from the start of their training. (Not that either topic was on the exams when I was a student. . .)

[justarrived]

If Mary Hardy is an educator and member of SoA BoG - her comparison of the two does carry credibility.

However I think - a person who starts taking actuarial exams - UK or US - would mostly be taking them for the first time - so no matter which exams you are taking - it does take a lot of effort to first study for the subject and then actually pass them. Add to it the difficulty ( but a help too) of working full time in a related field.

ALso the comparison becomes difficult - due to further differences

Its true that a UK student can have exemptions from upto 9 of the 15 exams - which one can complete in even 1 year. Whereas an SoA student has to pass the SoA exam and cannot get any credit from any university course!

UK work week is about 35 hrs in a life company. On a relative basis - it could be lower work hrs than the US work week. ( here there would definitely be differences based on life vs pensions vs P&C and also company vs consulting)

So ( assuming exams are the same difficulty ) i think it would take US students more effort than UK students!

However , SoA does not have any practical experience assumption implicit in the exam system, whereas FoA and IoA do have an implicit assumption of experience in the related field in the later more advanced exams - 300 series onwards (now called specialist technical stage).
This means - for eg a person working in LIfe insurance - would find it very difficult to pass a P& C 300 series paper and vice versa! So this would mean that even if a UK student does infact have more time on hand they would need to put in more effort in these advanced exams.

So overall inspite of these differences - I still think qualifying as actuary either FSA or FIA would involve broadly similar level of effort. So a person who is trying to decide which exams to pursue should think of some of the following aspects ( not exhaustive by any means):

1) country where wish to practice
2) where residing
3) where want to be in future - eg want to be able to work worldwide? or only in a particular country
4) good access to tuition material
5) specificity or generality of the tution material and experience in the relevant area
6) mutual recognition agreements.

[hardlife]

I agree with 'justarrived'. One more issue to point out is for UK candidates, if they are stucked halfway in the examination system, they can opt to attend university for postgraduate diploma. That will give them even more exemptions if they did well. They will be getting more than 9 out of the 15 exams exempted. While for US candidates, we got no choice but to sit for SOA exam until we finally pass.

[tope]

I took one of the later UK exams 301 - Investments, and it is just like preparing for Course 6 EXCEPT

1. You order two binders of 25 (or is it 27) chapters and that is ALL the information you need to sit this exam, just know those binders inside out and you are golden. The binders look just like the BPP study notes for Course 5 and 6..In fact the BPP folks are the UK company that supplies these binders for the Institute of Actuaries. They also give seminars..and the idea of grading mock exams is something not unique to UK exam takers, in fact most students capitalize on this and the ir companies are usually supportive

2. In the exam itself, the exam rooms are usually poor with desks about 1/3 of your arm span, that somehow will be hard for US testers to deal with

3. I can't remember how many questions exactly , but lets say out of ten questions, you get to choose which 7 or 8 you want to answer..nice isn't it

4. Oh and it's only 3hrs or so, no Afternoon sessions or stuff like that


Does that make it easier than US exams, I don't think so, but your travel time to designation is so much faster.

[justarrived]

I took one of the later UK exams 301 - Investments, and it is just like preparing for Course 6 EXCEPT

.

Well well - I did not draw a conclusion that US exams are easier than UK exams. What I meant was that there are some factors that make life easy or difficult about both UK and US systems and which make comparing the 2 difficult.

so if most UK exams are based only on 2 binders - theres a lot more depth to it than meets the eye. Also If you have taken 301 and feel its easy...try passing 303 - oh yes even if its looks like just 2 binders passing this and other 300s are not simple at all. Even the best people have found themselves taking these exams 2 or 3 times!

So my point is both UK and US exams are broadly equally easy or difficult - both systems have some very difficult parts which make qualifying in either system a great accomplishment - Also i dont think its right to belittle some system just for the sake of it!

[justarrived]

and yes none of the 300 or higher subjects have optional Qs. ALL Questions ARE COMPULSORY.

[tope]

Things must have changed from 6yrs ago..thanks

and I was not belittling a system, i was just recanting my experiences.. Thanks again!!!

[Mobile Actuary]

Recanting, recounting, one of those words. :D

[tope]

Don't you just love the Englis langage :tup: :razz:

Thanks for the lesson

[Abnormal]

Do an FIA.

Not only is the travel time significantly shorter (can't find the link but Peter Clark of the Institute was talking about 5 years or so) and you can potentially get credit for university courses but given the way the various Mutual Recognition agreements are drafted you have a number of other benefits.

Do an FSA by exam and you can only become an FIA after living and working in the UK for a fixed period of time. Further, since Mutual Recognition isn't transitive, you don't get automatic recognition within the EU.

However, become an FIA by exam and, not only is their no UK residency requirement but the transition to FSA is almost automatic (you've always been able to join the AAA) and your designation is automatically recognized globally. Hate to tell the SOA this but the various Mutual Recognition agreements have actually diluted the importance of the FSA designation, not enhanced it.

[Queen02]

If Mary Hardy is an educator and member of SoA BoG - her comparison of the two does carry credibility.

However I think - a person who starts taking actuarial exams - UK or US - would mostly be taking them for the first time - so no matter which exams you are taking - it does take a lot of effort to first study for the subject and then actually pass them. Add to it the difficulty ( but a help too) of working full time in a related field.

ALso the comparison becomes difficult - due to further differences

Its true that a UK student can have exemptions from upto 9 of the 15 exams - which one can complete in even 1 year. Whereas an SoA student has to pass the SoA exam and cannot get any credit from any university course!

UK work week is about 35 hrs in a life company. On a relative basis - it could be lower work hrs than the US work week. ( here there would definitely be differences based on life vs pensions vs P&C and also company vs consulting)

So ( assuming exams are the same difficulty ) i think it would take US students more effort than UK students!

However , SoA does not have any practical experience assumption implicit in the exam system, whereas FoA and IoA do have an implicit assumption of experience in the related field in the later more advanced exams - 300 series onwards (now called specialist technical stage).
This means - for eg a person working in LIfe insurance - would find it very difficult to pass a P& C 300 series paper and vice versa! So this would mean that even if a UK student does infact have more time on hand they would need to put in more effort in these advanced exams.

So overall inspite of these differences - I still think qualifying as actuary either FSA or FIA would involve broadly similar level of effort. So a person who is trying to decide which exams to pursue should think of some of the following aspects ( not exhaustive by any means):

1) country where wish to practice
2) where residing
3) where want to be in future - eg want to be able to work worldwide? or only in a particular country
4) good access to tuition material
5) specificity or generality of the tution material and experience in the relevant area
6) mutual recognition agreements.

As a Scottish person now living in CA and taking the SOA exams let me add some input based on my experience.

Firstly, there are more Math grads as a % of grads in the UK than in the US so even getting a job is an almost impossible task even with a good degree from a British "Ivy League" Uni. Some of the big consulting firms were getting 1000 applications, interviewing 100 for 20 jobs nationwide.

There are only a couple of Uni's offering the special Masters degree in Actuarial Sci which give the first 9 exemptions...most of us with Honours Math degrees get no exemptions and start from scratch.

In my short time with Lloyds Bank, I did only work 35 hrs a week and had more vacation time. However, I was expected to take exams 3 at a time, get much less study leave than in the US, the study leave had to be taken inside the office in a "study room" as well as survive on less than $30k a year and paying almost $1000 rent. I was also expected to pass a minimum of 1 exam per sitting else I would be FIRED and another 500 students would be lining up to take my place.

So you think it is easier for US Students? I don't think so. The only thing I think that perhaps makes it harder for US students is that undergraduate degree's are not taught to the same indepth level and so grads have perhaps never tackled one topic into microscopic detail before unless they have done a Masters. No liberal arts with a little bit of Calc degrees allowed.

IMHO of course (o;

[justarrived]

Wow - that was some good first hand input Queen!!!

Also even if FSA designation does not carry the same mutual recognition benefits, few US students would really want to leave US for lack of opportunities in US itself! So If you are serious about finding work - you can find atleast one opportunity!

Whereas a lot higher % of faculty or institute students work outside of UK - in countries like India, South Africa, China, Singapore, other EU countries, NZ and Australia.

This further adds to the difficulty in comparison!! - You could say FSA designation is self sufficient in the sense of being able to practice in the US - students dont really have to go elsewhere if they dont want to.

FIA or FFA designation is valuable depending on where you work, not to say its not self sufficient. So experience for eg in South Africa may not be as valuable in the UK as experience in the UK itself.

[Queen02]

[QUOTE=justarrived]Wow - that was some good first hand input Queen!!!

Also even if FSA designation does not carry the same mutual recognition benefits, few US students would really want to leave US for lack of opportunities in US itself! So If you are serious about finding work - you can find atleast one opportunity!

QUOTE]

I noticed that. I didn't realise the UK exams had changed and so I looked online [just in case my green card doesn't work out and I need to go home]. I remember the ASA giving exemption from all of the old 100 series but now it hardly gives any exemptions. I've have a ton of exams left to do when I get home. They must not be in alignment in content anymore.

You'd think with the lack of qualified actuaries and people dropping out midway through the exams like flies due to being able to earn more $$'s in a dotcom or some career with no exams, they'd standardise the exams at least between US, Canada and UK so as to give more international opportunities.

[DW Simpson]

You'd think with the lack of qualified actuaries and people dropping out midway through the exams like flies due to being able to earn more $$'s in a dotcom or some career with no exams, they'd standardise the exams at least between US, Canada and UK so as to give more international opportunities.

Whether the exams are standardized between countries hasn't seemed to matter a lot to many employers. We've seen increased mobility worldwide whether someone holds US/Canada or UK credentials. For example, our UK positions frequently use FIA/FSA and FIA/FCAS interchangeably, as do many of our Asian roles.

[Anonymouse]

Nobody, other than exam takers, will use those formulas to figure out quantities in interest theory.

:wave:

I use the concepts that I had to understand deeply for the exam more than any of the formulas though.