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The wise words of an actuary are a must in today’s investment industry. With fluctuating risk levels and ever-changing factors affecting all asset classes, the statistical rationale of actuarial professionals forms a foundation for many investment decisions.

According to the Institute and Faculty of Actuaries (IoFA), there are only around 5% of actuaries who specialise in investment. These types of actuary could work for an investment bank, investment firm, asset management firm, pensions company or insurance company. Depending on their level of experience, they’ll be busy with a number of different responsibilities.

Actuaries: sound investments in the industry

Research is a core part of the work many investment actuaries do. They will carry out research into various asset classes and markets to investigate current and potential levels of risk associated with investing in them.  This could involve quantitative methods, using mathematics, statistics and computerised techniques for the analysis of measurable data and spotting the trends in this, to qualitative methods which could deal with behaviours of markets etc.

The actuaries will then feedback their findings to portfolio managers or consultants in their company to support them in the development of investment strategy. They use their commercial awareness combined with research results to provide consultations and guidance on optimising portfolio construction (selection of different assets) to generate the highest possible returns, whilst mitigating risk.

Got the skills?

At more senior levels, actuarial professionals can work in client facing roles as investment consultants and can communicate their findings to their clients themselves as they provide advice on investment strategies and investment opportunities. If you fancy this as a career path, you can start out as an analyst and work your way up.

Technical prowess is also necessary. Some roles require modelling and programming skills to develop models in order to assess the likelihood and impact of different factors on an investment, and work out levels of risk. Actuaries will also monitor investment product performance and conduct performance analysis reviews.

Apart from the obvious flair for maths and statistics, wannabe investment actuaries and investment consultants will need to have top communication and written skills too. Expect to have to produce written reports of findings in this line of work.  

Investment actuaries tend to start out as graduates from a finance/scientific or mathematical background, and train up through a graduate scheme before choosing to specialise in this area. The salaries vary, but there’s certainly the potential to earn big bucks here. Salaries average at around £35,000 to £50,000, which may develop as your experience grows up to six-figure sums!

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