|North American Actuaries||CFA After Qualification||Common|
Is Actuary Harder Than CFA?
Actuary and CFA (Chartered Financial Analyst) are two of the most in-demand professions nowadays. These two are related to financial management, but they have differences in terms of their requirements, responsibilities, and complexity of exams. In this article, we will compare the two professions and see whether actuary is harder than CFA.
What is an Actuary?
An actuary is a professional who is responsible for analyzing risk and uncertainty. Actuaries work in the fields of insurance, pensions, and investments, where they use mathematical skills to assess the likelihood of future events and the financial impact of those events.
What is CFA?
The Chartered Financial Analyst (CFA) designation is a globally recognized certification for finance and investment professionals. It is widely considered to be one of the most respected and prestigious investment designations in the world.
What are the differences between Actuary and CFA?
Although actuary and CFA are related to financial management, they have differences in terms of their requirements, responsibilities, and complexity of exams. Some of the differences are:
- Actuaries focus on assessing risk and uncertainty, while CFAs focus on investment management.
- To become an actuary, you need to pass a series of exams and complete an education and experience requirement. To become a CFA, you need to pass three levels of exams and meet some requirements related to education and work experience.
- Actuary exams are considered to be more challenging compared to CFA exams, as they require a high level of mathematical skills and the ability to apply them to real-world problems. However, the CFA exam is also challenging, but it is relatively easier compared to actuarial exams.
- Actuaries work in fields like Insurance, Pensions, and Investments, while CFAs work in Investment Banking, Asset Management, Risk Management, and Corporate Finance.
- The supply of CFAs is higher compared to actuaries, which has led to a reduction in the salary and the value of the certification. However, the actuary profession is highly regarded and in-demand, which has led to a high salary and value of certification.
- Many North American actuaries take the CFA exams after qualification to enhance their skills, while it is common for CFAs to become actuaries for career advancement.
Actuarial Science is a highly specialized field that deals with risk modeling and analysis. Actuaries use mathematical models to predict the likelihood and impact of uncertain events like natural disasters, accidents, and illness, and use this information to help businesses and organizations manage their risk. Actuaries work in a variety of industries, including insurance, healthcare, pensions, and financial services.
Difficulty of actuary exams
Actuarial exams are considered to be some of the most challenging professional exams to pass. According to the Society of Actuaries, it takes an average of 6-9 years to become an actuary, and candidates must pass a series of exams to become certified.
The actuary exams cover a wide range of topics, including mathematical modeling, statistical analysis, and financial risk management. Some of the exams require proficiency in advanced mathematics and computer programming. The exams are designed to test candidates’ understanding of real-world problems and their ability to apply statistical and mathematical models to solve them.
As per Investopedia, the pass rate for actuary exams is usually around 40-50%, which indicates their high difficulty levels. The cost of these exams also varies, but it is considerably less expensive than the cost of the CFA exams.
Pay of Actuary
According to the Bureau of Labor Statistics, the median pay for actuaries was $108,350 per year in 2020. The demand for actuaries is projected to grow by 18% from 2020 to 2030, which is higher than the average for all occupations. This is due to the increasing complexity of risk management in the financial sector, and the need for skilled professionals who can analyze risk and uncertainty.
The actuarial profession is highly regarded and in-demand, which has led to a high salary and value of certification. The value of the certification is also high because of the high level of difficulty of the exams, and the fact that this field is very specialized.
The CFA (Chartered Financial Analyst) designation is a professional certification for finance and investment professionals. It is offered by the CFA Institute, which is a global organization that sets the standards for professional excellence in the finance industry.
Difficulty of CFA exams
The CFA exams are challenging, but they are relatively easier compared to actuarial exams. According to Investopedia, the pass rate for CFA exams is usually less than 50%, but this pass rate is still higher than the pass rate for actuarial exams.
The CFA exams cover topics such as economics, portfolio management, and financial analysis. The exams are structured as three different levels, with each level becoming progressively more difficult. Candidates must pass each level to move on to the next, and the final level requires the completion of a thesis.
The CFA exams are also costly, with the total cost for all three levels ranging in the thousands of dollars. The exams require a high level of dedication and commitment to complete, and candidates typically need to spend at least 300 hours studying for each level.
Pay of CFA
The CFA is less valuable in terms of pay compared to the actuary profession. According to the CFA Institute, the median pay for CFAs in North America is around $100,000 per year, which is less than the median pay for actuaries.
The CFA profession is also oversupplied, which has led to a reduction in the salary and the value of the certification. However, the high demand for skilled financial professionals and the prestige of the CFA designation have helped to maintain a relatively high value for the certification.
Both Actuary and CFA are challenging professions that require a high level of dedication and commitment to achieve. Actuarial exams are considered to be more challenging compared to CFA exams, and the actuary profession is highly regarded and in-demand, which has led to a high salary and value of certification.
The CFA, on the other hand, is less valuable in terms of pay compared to the actuary profession due to oversupply, but it is still considered to be one of the most respected and prestigious investment designations in the world.
Ultimately, the profession you choose should depend on your interests, skillset, and career goals. Both careers offer great potential for growth and success, provided that you are willing to put in the time and effort required to succeed.