Financial Analyst vs. Actuary: An Overview

The financial indu💃stry is full of careers for analytical people, including financial analysts and actuaries. These are good careers for those who love math, statistics, charts, and models, and those who c🦋an dive into a subject and pick apart its complexities. But, these two professions are very distinct from one another.

Financial analysts and actuaries focus on different areas of the financial industry. Financial analysts typically conduct research and review financial data to make predictions about corporate financials and investment opportunities among other things. 澳洲幸运5官方开奖结果体彩网:Actuaries, on the other hand, work in different industries doing risk and loss analysis. Keep reading to learn more about these two professions and how they differ.

Financial Analysts

Financial analysts provide expertise for businesses and 澳洲幸运5官方开奖结果体彩网:investors in economics, markets, investments, regulations, taxes, or 澳洲幸运5官方开奖结果体彩网:corporate governance. A financial analyst primarily offers accurate information and makﷺes recommendations based on that information. Corporations, private companies, public agencies, defense contractors, and nonprofits all employ financial analysts.

Since there are many different kinds of financial analysts (buy-side, sell-side, institutional, industry-specific, corporate, private, and so on), there is no defined career patꦬh or set of necessary skills to become one. Every financial analyst should be gifted at analytical problem-solving and be able to communicate effectively with non-experts, but there are r♑elatively few additional hard-and-fast requirements.

Common areas of study for financial analysts include finance, economics, statistics, accounting, mathematics, or other business-related fields. Many financial analysts eventually pursue other professional designations such as the 澳洲幸运5官方开奖结果体彩网:Chartered Financial Analyst (CFA) designation. Some financial analysts have advanced degrees, such as a 澳洲幸运5官方开奖结果体彩网:master of business admini𒉰stration♑ (MBA).

Actuary

Actuaries work in the insurance industry, making them important industries where insurance plays a prominent role. They compile and analyze 澳洲幸运5官方开奖结果体彩网:statistics about risks and the individuals who are exposed to risk. They also work for large financial institutions where they assess risks on loan products. Actuaries measure the potential for loss in an 澳洲幸运5官方开奖结果体彩网:investment portfolio, which dir🍨ectly crosses over into the realm of financial analysis.

There are comparatively few actuaries in the U.S. Actuarial work involves long hours of dedicated analysis and statistical modeling and appeals to a relatively small subset of the population. Another key reason is that actuaries spend several years passing a series of rigorous certificatio♓n exams before most companies will consider them.

Aspiring actuaries are encouraged to pursue an undergraduate degree in a field such as mathematics, statistics, or actuarial science. Some corporate finance and business coursework is typically also done. After receiving a degree, actuaries work toward credentials through one of two professional associations: the 澳洲幸运5官方开奖结果体彩网:Society of Actuaries (SOA) or the smaller 澳洲幸运5官方开奖结果体彩网:Casualty Actuarial Society (CAS).

Actuaries don't have to be licensed, but very few employers consider hiring applicants who are not working toward these credentials. There are both associate and fellow levels. Candidates must pass a series of exams. Students often take the first exam or two before graduation. It can often take up to seven years just to pass all the exams for the associate level. However, one can work after passing the first two exams.

Key Differences

According to the Bureau of Labor Statistics (BLS), the median salary for an actuary in the U.S. is $120,000 as of 2023,💞 though aspirants are unlikely to earn near the median salary without starting to pass exams from the CAS or SOA. The BLS expects an ꧂additional 22% percent increase in actuarial positions between 2023 and 2033, much faster than the average for all occupations.

There are over 30,000 actuaries in the U.S. There aren't many licensed actuaries to go around, so businesses must compete to hire good people.

As of 2023, the median salary for financial analysts is $99,890. The BLS estimates that financial analyst positions will increase by 9% between 2023 and 2033, which is much faster than average growth.

Special Considerations

The average financial analyst works between 40 and 50 hours per week and usually doesn't work holidays. Unlike many of their compatriots on Wall Street, fina𒁃ncial analysts are not generally expected to dedicate their entire lives to their work.

Actuaries spend even less time at the office than financial analysts. Most actuaries work about 45 hours a week at most. Actuaries who pursue their credentials can expect to study for the exams outside of work. Some employers offer study time𒉰 during🏅 work, but it is usually not enough on its own to pass an exam.

Some investment banking actuaries may work more than 50 hours a wee𒊎k and may also be expected to travel often to meet with clients. Financial analysts who work for investment banks 𝕴often do so as well.

Financial analysts don't receive the same accolades about job desirability, but this career is a better fit for people who like the Wall Street environment, who like working in support of multiple teams, and who may eventually want to move into another financial career, such as investment banking or private equity.

The Bottom Line

Financial analysts and actuaries are just two of the career paths for professionals in the financial industry. Financial analysts provide important information for companies and investors so they can make more informed decisions about the way they spend and invest. Ac☂tuari🐬es help companies determine risk and the potential for loss in the insurance and financial services sectors.