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The Actuary The magazine of the Institute & Faculty of Actuaries

Banking: Invest in me, I’m an actuary!

After two years in the actuarial recruitment field, one of the questions that has been posed to me on many occasions, particularly by student actuaries is: “I’d like to move into the investment industry, can you help?” Invariably they are referring to the investment banking and asset management sectors, rather than investment roles within the mainstream actuarial consulting and insurance sector. Much has been written about the suitability of an actuarial background for pure investment roles. I decided to share the views of someone who has ‘been there and done it’ — and is still doing it — and asked Graham Jung, an actuary with a varied career in the investment field, for his thoughts.

What was your transition path into investment banking?
I joined Watson Wyatt in 1988 and I was fortunate to be an early member of the investment consulting practice. I was committed to qualifying as an actuary and convinced that I wanted to focus on investment. In 1996, I joined AMP Asset Management as the head of investment solutions, working with institutional clients and on a wide range of internal projects. In 1998, AMP bought Henderson Investors and I took on the role of head of investment risk working with the investment managers as they developed hedge funds. In 2000, I moved to Goldman Sachs in the prime brokerage business working with hedge funds and their managers.

The technical skills associated with actuarial training are often thought to lend themselves well to technical quantitive analysis and modelling roles. What about the broader investment spectrum? At a broad level, the roles open to actuaries who wish to apply their training in the investment field fall into two camps: those requiring technical skills; and others where a detailed understanding of financial institutions such as pension funds and insurance companies is required. The first group contains asset management — particularly at quantitative firms, risk management and performance measurement roles. The second group is wider and includes sales roles for both investment banks and asset managers, as well as client relationship positions. There are, of course, other niche areas where a number of actuaries have developed their careers successfully, although most have first passed through a more traditional investment organisation.

CFA or FIA, does it really matter?
Yes, it matters but more for the individual than for their employer, colleagues or clients. In my experience, while a few actuaries will sit the CFA exams post-qualification, the opposite is not true. The CFA is well respected and understood within the investment industry but it does not have the full impact of a professional qualification.

Is it really possible to qualify as an actuary while working in the investment sector?
It is possible, although in my opinion it is challenging to do so, particularly for students moving at an early stage of their studies. The nature of the work in the investment industry is demanding, and there are only so many hours in the day. More crucially, study and peer support will be less readily available and time to qualification increases. I think that most actuaries would agree that pursuing qualification status is best achieved in an actuarial environment, which can include a strong investment focus, as my career history proves.

What thought processes should actuarial students be going through when they decide ‘I want to work in investment’?
I’d start with asking yourself two questions: ‘What do you really want to do?’ and ‘What attracts you about the investment sector?’ Think about what sort of investment work and environment appeals to you. For any career move, make sure that you are moving for positive reasons. The investment arena is large and diverse, for example, investment management, investment banking, commercial banking and private wealth management all have some actuaries working in the business. Each offers a different vocational environment and client base, with differing recognition of the actuarial qualification.

From your experience, is there such a thing as a right time to move?
In my case, I decided to move to the investment industry after qualifying and getting some valuable exposure in an actuarial consulting environment. There is also an argument for moving early, which may be more suitable to those individuals who perhaps are no longer committed to being an actuary. I would say that moving midstream while trying to qualify as an actuary is probably a more difficult path to take.

Chris Cannon is a partner in The Actuarial Recruitment Company covering the life, pensions and investment sectors.
Graham Jung is an executive director at Goldman Sachs, working in the prime brokerage business.