Actuary vs. Financial Analyst: Crunching the Job Numbers

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Modern computers have immense processing power. They can run algorithms that contain millions of data sets, produce complicated results as spreadsheets or 3-D graphics, and simplify the most complex information. But no matter how powerful computers may be or how intelligent their calculations become, human interpretation remains important. There is still the need for educated, trained individuals who can analyze data-focused information and understand its real-world impact.

Coworkers discuss financial analytics while looking at a computer.

Actuaries and financial analysts are two professions that are at the heart of data interpretation. Both careers rely on smart, analytical problem-solving with a background in data and statistics. Let’s learn more about each of these career choices.

Actuary Overview

Actuaries are invaluable experts in risk analysis who work in a variety of industries. They analyze and estimate the economic cost of different possible outcomes in a company. For instance, a life insurance actuary could analyze each client’s individual data set (age, health factors, job, background, location, etc.) to determine the likelihood that they would carry the policy to term. From there, the actuary could determine what the cost/benefit margins will be to the insurance company, which then helps to determine the cost of the insurance to the consumer.

Becoming a fully certified actuary takes time and dedication. Detailed education, post-graduate certification, and ample experience can lead to many rewarding opportunities in the field. In addition, actuaries in training are able to work and earn money through entry-level positions.

Actuary Salaries and Job Outlook

The U.S. Bureau of Labor Statistics (BLS) reports that as of 2018, there were 23,600 actuaries working in the United States. Those actuaries earned a median annual salary of $102,880 per year, with the top 10% earning over $186,110.

If you’re excited about applying your analytical skills to a growing field, actuarial work may be for you. The BLS projects that from 2016 to 2026, the U.S. job market will add 5,300 actuarial positions, a growth rate of 22% during that span. That rate is more than three times the national job growth average.

Financial Analyst Overview

Financial analysts examine markets, stocks, companies, and other business and financial data. They take this information and use it to project future earnings, investment opportunities, potential monetary issues, and other relevant financial matters that are important to business and industry. Financial analysts may work for financial analysis companies, or they may assume an in-house position in a company. In addition to analyzing data, they also prepare reports on their findings and make recommendations. Financial analysts must be confident in their work, because their reports and recommendations can have a weighty impact on their employer.

Financial Analyst Salaries and Job Outlook

The BLS reports that there were 296,100 financial analysts in the U.S. as of 2018. The largest sector of employment was securities, commodity contracts, and other financial investments and related activities, with 24% of financial analysts working in this sector. In addition, financial analysts find work in professional, scientific, and technical services (14%); credit intermediation (13%); and company management (12%).

The median annual salary for financial analysts is $85,660, according to the latest reports, with the top 10% earning $167,420 or more. The BLS expects the job market for financial analysts to grow 11% from 2016 to 2026, adding 32,200 jobs to the market.

Similarities Between Actuaries and Financial Analysts

Actuaries and financial analysts are both expert number-crunchers who focus on interpreting data. In industries requiring skill with numbers and problem-solving abilities, these professionals may spend a lot of time reviewing data, working with computer software, and preparing reports.

It’s not all about hard skills with data, however. In both professions, strong communication skills are necessary as they interface with clients, create presentations on their findings, and work with their team to create action items based on findings. In addition to having similar skills, actuaries and financial analysts often come from similar degree programs, such as Maryville University’s online Bachelor of Science in Data Science.

Differences Between Actuaries and Financial Analysts

Though actuaries and financial analysts need similar skills to succeed, there are differences in the two career paths. These include how they apply their skills, the education, and the experience needed to land jobs in their field.

Applied Job Skills

The job skills required to be an actuary vs. financial analyst might be similar, but the way they are applied to their specific industries varies. Financial analysts develop a complete picture of an existing fund or investment. Actuaries focus on risk potential, and their main job involves using data and numbers to ensure their employers aren’t making decisions that will cost them money.

Certification Process

Both fields require a strong education, including a degree or experience that demonstrates an understanding of data. Upon receiving a degree, the path for actuaries differs from financial analysts.

The process of becoming a certified actuary takes time, no matter which of two certification paths professionals choose. The Casualty Actuarial Society (CAS) and Society of Actuaries (SOA) both have their own certification, each of which consists of multiple examinations. In addition, professionals must obtain Validation by Educational Experience (VEE) hours and take postgraduate online courses. Combined, this can reflect hundreds of hours of studying and preparing for exams.

Financial analysts, on the other hand, can find work without having an official certification. The Chartered Financial Analyst (CFA) certification, a globally recognized credential, is not required to work in the field. In fact, to sit for the three exams you must have already worked in financial analysis for at least four years. Having said that, a CFA certification is a desired designation for financial analysts.

Work Environment

According to the BLS, 70% of actuaries work for insurance companies, with another 16% working in professional, scientific, and technical services. Most of that second group (3,500 out of 3,900 analysts) works in management, scientific, and technical consulting services.

Financial analysts, on the other hand, can serve in a wider array of industries. All businesses that manage or hold large amounts of money can benefit from the insight of a financial analyst.

Actuary vs. Financial Analyst: Which Is Right for You?

If you enjoy working with numbers, analyzing spreadsheets, and communicating statistics, then you may find a career as an actuary or financial analyst both challenging and rewarding. Either field can present opportunities to impact the financial future of organizations. Discover how Maryville University’s online Bachelor of Science in Data Science could accelerate your opportunities to enter these growing job markets.

Casualty Actuarial Society, Exams & Admissions

CFA Institute, CFA Programs

Investopedia, “Chartered Financial Analyst (CFA)”

Investopedia, “Financial Analyst vs. Actuary: What’s the Difference?”

Maryville University, Bachelor’s in Data Science

U.S. Bureau of Labor Statistics, Actuaries

U.S. Bureau of Labor Statistics, Financial Analysts