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I have several friends from college working as I-banking analysts in NYC banks. Despite their 6-figure salary, not one of them seem to be genuinely happy with their job. Actually, one of my friends just quit his job with nothing lined up. He told me he just hated his job so much and couldn't take it anymore, grinding out 90-100 hours a week, doing mindless data-entry work on excel spreadsheets.

The most common complaints I hear regarding banking are: 1) intense workload, 2) unpredictable work schedule, 3) mind-numbingly boring work, 4) retarded hierarchy culture.

Now, I don't work in banking so I can't confirm any of the above, but I give my friends benefit of the doubt, anyhow.

On the other side of the fence, I have 2 other friends from college. Both were math majors at HYP. They passed actuarial exams, and took analyst jobs at large insurance firms in NYC, as actuaries.

Their starting comp was 140-150k/ year, and they only work 45-50 hours a week. My friends tell me they love their job, as they can truly achieve work-life balance and the fact that their job is intellectually stimulating. They say that, having been math majors back in college, they appreciate the fact that they can use the math/stats/cs skills they honed in college directly at their job.

I am not a banker nor actuary. But, it sure as hell sounds like, if I can choose either career path, I would go for becoming actuary. For some odd reason, I will say that the profession of actuary is somewhat under the radar, as many people, myself included, didn't hear much about the profession during college years, while most were exposed to the constant I-banking/ consulting recruitment propaganda in college.

I think that I should've been a math major back in college...

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Comments (13)

  • Black Jack's picture

    I feel like you can learn what you want to learn about the IB lifestyle on here pretty easily, so I will address only what I know about actuaries.

    1. The only schools that have actuary programs (that I know of) are second/third rate schools, so you are dealing with people that aren't that bright (with that said there are a small amount of people like your friends who take the tests independently of studies and make it).
    2. The ceiling for earnings is much much much lower. Sure, starting salary may be over 100,000 (though that is rare and usually it is around 70-80k), but someone doing it for 6-8 years is more than likely still making under 200k.

    It comes down to personal preference- I would never want to work at an insurance company, and personally as of now think I want something more demanding out of college. I also know people who have been actuaries for a long time and love it. The lifestyle is nice, though I wouldn't expect to make it big at all.

  • IvyGrad's picture

    1. The only schools that have actuary programs (that I know of) are second/third rate schools, so you are dealing with people that aren't that bright (with that said there are a small amount of people like your friends who take the tests independently of studies and make it).

    You don't need to be in the actuary program or major to become an actuary. That is equivalent to the situation, where you don't need to be a biology major to get into a med school.

    To become an actuary, you need to pass a series of very math-intensive exams. An idiot wouldn't pass those exams. It doesn't matter if you were "actuary major" at a 2nd tier State U, if you can't pass the actuarial exam, you won't get the job as an actuary.

    2. The ceiling for earnings is much much much lower. Sure, starting salary may be over 100,000 (though that is rare and usually it is around 70-80k), but someone doing it for 6-8 years is more than likely still making under 200k.

    An interesting question to ask, here, is exactly how many of those IB analysts end up cracking high 6 figures? The vast majority of IB analysts don't make it to MD/ Partner level, at IB or elsewhere.

    In theory, I-banking has high ceiling, but it means very little if you can't attain that level of comp yourself. And, even if you do, you will have sacrificed 70-80% of your waking hours in order to make that happen.

  • West Coast rainmaker's picture

    I would be surprised if your IB friends were happy - the life of an IBD analyst sucks. Any 1st year analyst who is thinking "I would like to do this for the rest of my life" is more than a little unusual. You do it for the exit opportunities. Making VP in IB (complete with 500k+ all-in comp) is largely achieved through outlasting your peers. Pre-director level, most attrition is voluntary.

    Hedge funds and PE will usually get you to the 200k+ mark in your first year post IB. Going the corporate route normally comes with a paycut, but you are still in the low-mid 100k range as a 25 year old. So I would say the % of IBD people who eventually make it to 300k+ salaries is fairly high, provided that they do not exit by choice.

    Not to knock being an actuary - it is a great career. But you need to like math, and you need to like the work (modelling risk). You will have solid work-life balance.

    And I do think those starting salaries (140k) are very high for actuaries. 70k + a small relocation bonus is a normal new hire package. If you look at the salary statistics, 140k is average for an actuary with 6-7 years experience and 8 exams passed.

  • Black Jack's picture

    As was addressed above regarding scales of pay etc. It is hard to compare the two outright- When you choose actuary you are choosing a career. When you talk about IB you are choosing a route that has the possibility of continuing in banking but more likely exiting to PE/HF/corporate or many other possibilities. So in considering the pay you have to consider the pay of a career as an actuary vs. the pay that comes with the route beginning with IB. Most any way you slice it the latter is higher paying. An established actuary working 6-10 years is probably making around 200k all in. The same person who moved to PE after their 2 year IB stint is likely making somewhere around 2x as much (if not more). This isn't a rule, and I'm sure you can find people who began in IB and are making less than someone who began as an actuary at the same time 5 years ago, but I think this is much more rare. To provide a specific example- my uncle is an actuary for a large insurance provider in the midwest. He has been doing it for about 25 years and makes around 250-300k all in + good benefits.

    Regarding your first point (and sorry to work backwards). The majority of actuaries are people who have studied actuarial science in school. As I alluded to, there are a number that study math at an Ivy or other top school and decide (somewhat randomly) that they want to study independently for actuarial exams. This is much less common. No, you can't be an idiot to pass the exams, but they are not all that difficult with the right amount of preparation. My 2 friends who are studying to become actuaries were very average math students in high school and continue to be quite average students overall. They have each passed 3 (I believe) exams. Additionally, actuarial science is different in the sense that employers look much less closely at GPA and much more closely at # of tests passed. Take that as you will- it can be a good thing or a bad thing.

    Source- friends studying actuarial science + relative working as actuary.

  • couchy's picture

    if your an actuary, you better like school because you basically just signed yourself up for several years of exams

  • mongoose's picture

    How hard is it to find a job if you do pass the two initial exams?

  • Charles-perry's picture

    Dont become an actuary unless you LOVE maths/stats (actually - more stats) and a bit of finance. I used to study Actuarial Science at LSE. It was hard like anything. Worst then anything I have done before. You have to really enjoy Stats. you have to remember a lot of stuff. When they say its hard - trust me - its HARD!

    Its a good job though. I have friends at top firms who are becoming actuaries. BUT THEY LOVE STATS. I cannot emphasise it anymore then that. Also - generally speaking - actuaries are nice people but a bit one-dimensional... IBD people tend to be multi-dimensional. (please do not confuse that with being a boring person)

  • In reply to Charles-perry
    leveredarb's picture

    Charles-perry:
    Dont become an actuary unless you LOVE maths/stats (actually - more stats) and a bit of finance. I used to study Actuarial Science at LSE. It was hard like anything. Worst then anything I have done before. You have to really enjoy Stats. you have to remember a lot of stuff. When they say its hard - trust me - its HARD!

    Its a good job though. I have friends at top firms who are becoming actuaries. BUT THEY LOVE STATS. I cannot emphasise it anymore then that. Also - generally speaking - actuaries are nice people but a bit one-dimensional... IBD people tend to be multi-dimensional. (please do not confuse that with being a boring person)


    lol if you think IBD ppl are multi-dimensional then may god help you.

    bankers are quite possibly the most narrowminded ppl in the world.

  • In reply to Black Jack
    honeyoak87's picture

    Black Jack:
    I feel like you can learn what you want to learn about the IB lifestyle on here pretty easily, so I will address only what I know about actuaries.

    1. The only schools that have actuary programs (that I know of) are second/third rate schools, so you are dealing with people that aren't that bright (with that said there are a small amount of people like your friends who take the tests independently of studies and make it).
    2. The ceiling for earnings is much much much lower. Sure, starting salary may be over 100,000 (though that is rare and usually it is around 70-80k), but someone doing it for 6-8 years is more than likely still making under 200k.

    It comes down to personal preference- I would never want to work at an insurance company, and personally as of now think I want something more demanding out of college. I also know people who have been actuaries for a long time and love it. The lifestyle is nice, though I wouldn't expect to make it big at all.

    This is very accurate. Actuaries trade upside potential for a comfortable work environment with minimal required initiative. As someone on the outside (Economist) that works with actuaries, I have noticed the following things when you bring a large group of these people together under one roof:

    1) Everyone is married or in a long term relationship regardless of their age and/or attractiveness of partner. Actuaries take risk aversion seriously in all aspects of their life.
    2) Much of the time spent involves arguing about arbitrary assumptions, who made said assumptions and why all other assumptions are inherently wrong...
    3) Attention to detail is revered regardless of its utility to the bottom line.
    4) Top line potential is very low i.e. 200k and actuarial skills are not very useful in fields outside of insurance unlike stats or math.
    5) Exams take a long time to finish - the average is somewhere around 10 years though I have seen it done in 4.
    6) Many Actuaries are actually quite bad at math/stats. I find that they are very good at learning new equations but get very uncomfortable when faced with actually questioning and/or creating new equations.
    7) Actuaries are dull. Actuarial studies filter for people that are very good at studying and writing for exams. All other aspects of life are secondary.

    Morpheus: Have you ever had a dream, Neo, that you were so sure was real? What if you were unable to wake from that dream? How would you know the difference between the dream world and the real world?

  • marcellus_wallace's picture

    I have tons of Actuaries as friends due to going to a school with a top math program. You make it sound like its so easy, oh you just "take insanely hard math classes, you pass these crazy ass math exams, you go work and print 140k-150k" boom done.

    In reality, Actuary is a shitload of math you have to love math/stats/insurance, next its shit ass boring you think banking/consulting sounds boring as an acturary what they do you snooze like no tomorrow, its extremely repetitive same style of analysis over and over and over. Passing the exams is not guaranteed, many people do not pass them on the first try which limits your bonus/earning potential since you are charged out based on the exams.

    Not buying the 40-50hrs at 140k story, that salary level you have to work for a Oliver Wyman or another top consultantcy and based on the people I know they do not work 40 hours, the ones who work for insurance firms making less money work 40-50hrs not Oliver Wyman style folks.

    I think you are really glamorizing Actuary from a couple friends you have who were probably 100% made to do that, like banking most Actuary analysts dislike their jobs/gigs and only do it because nothing else pays that much for that much school.

    Btw, the skills/qualifications needed to do banking vs Actuary is night and day....History majors become bankers.

  • AQM's picture

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  • In reply to leveredarb
    Charles-perry's picture