Post FEM Responses Here

[sundwarf]

The points in my response below are probably mentioned before, and I am never a writing guy. Still, I would like to have my opinion known.

To Whom It May Concern:

I am writing in response to the Board’s open letter regarding Future Education Methods (FEM). While I appreciate the effort the Board has put in on this issue, I adamantly oppose to the proposal. I do not believe the open letter has made a strong case on the viability of the proposal at all.

Why the Proposed FEM Process Will Not Work

I would interpret points (1), (2) and (7) as sharing SOA’s accreditation power with the qualified universities. To my knowledge such scheme is unheard of among other professional organizations. Other organizations keep complete control of the accreditation process to minimize the variance of qualification standards. Although the letter states that the Accreditation Committee’s (AC) will have a very strict oversight on the qualified programs, I just do not see how the AC can micro-control the quality of all courses in each program, which I believe is needed in order to maintain our Society’s traditionally high bar of entrance. Relaxing the quality of our accreditation standards is not an option and such proposal will not be well-received in the business world.

The exemption of the Probability (P) exam from the FEM is self-contradictory and only helps arguing against the proposal. Stating the teaching of the materials for exam P is not under the control of the actuarial science program staff is analogous to handling the universities the ability to accredit their students without the Society’s true control. If it is hard enough to exert quality control to couple calculus and probability courses within a university, how can it be easier to exert quality control to numerous actuarial science programs across the country?

The open letter states that exam P will act as a screening mechanism for both candidates and employers. I cannot help but think if the Board understands how the current actuarial job market works. As more and more candidates are attracted to the field, they need to have more exams passed in their belts to get into the door. Unlike the time I joined the actuarial community, exam P is no longer the exam which stands out candidates. In addition, due to the frequency of the offering of the exam, candidates can retake fairly soon without a long wait time. Thus, the pool of exam P passers is now much bigger than any time in the past. Because of the reasons above, I just do not see how exam P can be the screening mechanism under the proposal.

Last but not least, using final examinations and achieving certain scores in order to obtain exemptions will achieve nothing but create “easy paths” for students to breeze through the accreditation process. There are just too many ways to rebuff these 2 steps in the FEM process. Perhaps sharing a little bit about me will strengthen my case:

I graduated in 2005 in an Ivy-League university with a degree in Engineering. The program was very demanding in general, however, I have never faced a final exam which was nearly as difficult as the SOA exams. The quality of classes varied greatly even within my major – I learned a lot from many of those classes while no-so-much from others. I have also never seen 2 professors with the same grading standards. Last but not least, many students, including myself, did reference to how the professors give grades and avoid non-core classes which had very low median grades.

I can speak with confidence that what I experienced is similar to what is happening in all other institutions. Again, like I said before, it will be possible for the AC to micro-control every aspects of the qualified institutions and thus the proposal will never work the way it is intended.

Why We Should Not Make This Change

I strongly believe the benefits stated in the open letter are misleading at best. First of all, the actuarial profession will become a more attractive option for students entering university only if they are attending the qualified actuarial science programs, and the profession will become less attractive to everyone else. From what I have been told there are only a number of universities in both Canada and the United States which qualify for the exemptions. This simply discourages students from non-actuarial science programs, such as me, and other career changers to consider joining the actuarial community because they are likely many steps (exams-wise) behind the actuarial science students when they decide to do so. I cannot imagine 20 years after the implementation of the proposal most actuaries will be graduated from a small group of universities.

I have made a strong argument regarding the quality of the actuarial science program in the above section. In addition, political pressure within universities can become an important factor. In my opinion there is a higher probability the professors getting pressure from their department to give high marks to as many students as possible rather than truly trying to improve the quality of the education. Such potential pressure should not be ignored.

The third benefit stated by the FEM is totally subjective. The letter seems to presume learning in class is superior to taking actuarial exams. In my opinion there is not “superior” learning method; this is really up to the students’ preferences. On the other hand, I do not see how the actuarial profession will be benefited in the long run by having most actuaries coming from a small subset of universities, and at the same time the governing body has no control over the quality of the candidates.

One Last Word

As you may notice above, I switched from engineering to the actuarial field because the field is highly respected and has a challenging membership requirement. I believed by attaining my fellowship would prove my worth, and I was really proud of myself when I became a FSA last year. If an unsound alternative such as the FEM is implemented to somehow substitute the existing exam system, not only I but also many other fellow actuaries will be very disappointed. More importantly, the quality and diversity of future candidates will be at stake because the Society will have far less, if any, control over the screening process. Thus, I strongly oppose the proposal and hope the Board to rescind it as soon as possible.

Yours sincerely,
Sundwarf, FSA