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accountant vs actuary

When we hear about actuaries and accountants the first thing that comes to mind is that they fundamentally do the same work; they simply look at the finance side of businesses. The actuarial profession is generally grouped in with accountancy mainly due to the lack of knowledge of what an actuary is and what they do. Whilst the two professions do have some comparable attributes, they are largely different vocations.

Actuary vs Accountant Roles 

At a high level, accountants deal with a company’s financial statements whereas an actuary analyses data to assess the risks and price insurance/pension premiums. Accountants are not inclined to look into the future; they work with past financial data, addressing the impact of any events that have already taken place. In contrast, actuaries attempt to predict the likelihood of events that may occur and their associated financial impact.

Actuary vs Accountant: child and actuary dad

Accountants have a very diverse range of roles with the stereotypical accountant being an auditor working in one of the ‘Big Four’ firms. In general, they provide a business with any financial data which may be relevant in making business decisions. Typically, accountants work in the following areas:

  • Audit and Assurance
  • Tax
  • Forensic Accounting
  • Corporate Finance

Actuaries traditionally work in one of the following areas:

  • Life, Health & General Insurance
  • Pensions
  • Corporate Finance
  • Investment Management
  • Banking

Big questions surrounding 

the two professions:

  • What are the roles of actuaries and accountants?
  • Where can they find jobs?
  • Will technology have an impact on
    these careers?
  • Who gets paid more? (what everyone wants to know!)
  • What skills and qualifications are
    needed to become an actuary or accountant?
  • Who would win in a fight? 
  • Overall, which career comes out
    on top ?

Where do Actuaries & Accountants Work?

actuary vs accountant

Accountants are required in every industry as every business and organisation must have an accountant, from small local businesses, large corporate organisations to the government, schools, and hospitals. This means that accountants can take their pick of where to work. They can choose to work in any of the biggest cities, small towns or somewhere in between, with most choosing to live in some of the bigger cities.

Actuaries, on the other hand, do not have the same luxury. The actuarial field is much more specialised and whilst many large companies choose to have actuaries to analyse risk to aid decision making, general businesses do not require an actuary. This means that outside of insurance and pension companies there is often little opportunity for actuaries to get jobs, so they have no choice but to work in the big cities where the large firms are. In the UK and Ireland, you will find that most actuaries are based in either London, Edinburgh, or Dublin.

If we look at the US, there were approximately 1.4m accountancy jobs in 2019 with a projected growth rate of 4% by 2029 which is around average in the US. In comparison there were 28k actuary jobs in 2019 with a projected growth rate of 18% by 2029, which is more expeditious than the US average. This implies that whilst there are undoubtedly more accountancy jobs than actuary jobs, more and more actuaries will be needed in the future.

The Impact of Technology in the Future

Across all financial sectors we are seeing immense advances in the utilization of technology with big data having a large impact on most industries. So, will there be a need for accountants and actuaries in the future?

There is a vast amount of opportunity for many accountancy and actuary roles to become automated in the future. The fear is that this leads to a large decrease in the number of jobs available. Big data will be beneficial but also cause some issues for both industries. It allows both industries to provide data-driven results, making it easier to identify and manage risks and make more strategic decisions. However, both accountants and actuaries will need to learn how to best utilize the big data to do so which may prove challenging for many businesses.

In the accounting industry, the need for a bookkeeper has diminished over the past few years as many businesses can avail of simple software which they are able to use themselves. Digital tax is now compulsory in many countries all around the world, leading to many firms establishing digital platforms with their clients for ease of use, which may lead to fewer tax accountants being needed.

Machines can carry out processes and compliance work that accountants have always done manually with artificial intelligence likely to take over many tasks in the coming years. However, rather than accountants losing jobs, they are simply changing what they do. With all the manual labor cut out, many accountants will move into more data analytic roles and advisory services, giving them the skills and qualities needed to advise clients leading to better, more informed decisions being made for example.

Similarly in the actuarial industry, repetitive, monotonous tasks have been replaced with automated procedures. Particularly, the need for actuaries of defined benefit schemes has vanished as well as a declining demand for reserving actuaries. But the need for actuaries is still increasing. Many businesses are now seeing the opportunity for actuaries to carry out more useful and valuable tasks. We will start to see more and more actuaries developing their skills in data science, machine learning, and artificial intelligence, for example, to future-proof their careers.

Actuary & Accountant Average Salaries

One of the more alluring aspects of both careers is the potential to earn a lot of money as you complete all the exams and move up the career ladder. Having said that, overall actuaries tend to earn more than accountants due to the higher skill level needed for the role and how specialised the career is.

actuary vs accountant: cartoonized accountant

Last year in the US, the median salary of an actuary was $111,030 with the middle 80% earning between $66,030 and $196,0102. In comparison, the median salary for an accountant was only $73,560 with the middle 80% earning between $45,220 and $128,6801.

Its also worth noting that to get this higher salary, actuaries do not tend to work any more hours than accountants. If anything, it is likely that most accountants work more hours over the course of the year than actuaries due to the nature of their work. 

actuary vs accountant: salary increase

Whilst many actuaries may be busier at some points, they do not normally have the big ‘busy season’ that accountants do at the end of the tax years. Having said that, both careers require a lot of hard work and commitment with both careers being seen as relatively stressful jobs and this can be seen in the reward of a higher salary than many other careers.

Whilst money is not everything, it certainly makes actuarial work seem all that more appealing if you are weighing up the two careers.

Skills and Qualifications Required

Exams, Exams, Exams! To be a fully qualified accountant or actuary the exams will seem never-ending to most. Unlike most careers that require a degree-level qualification, getting a top degree in either subject is not enough to be fully qualified.

There are three different routes to choose from to become a Chartered Accountant with the most popular being the ACA qualification. To achieve this, you have to complete 15 exams as well as gain a minimum of 3 years of practical experience.

Similarly, there are 13 professional exams to complete, again with a minimum of 3 years of practical experience to become a Fellow Actuary (FIA or FFA) via the Institute and Faculty of Actuaries (the UK professional body).

It is worth noting that for both careers you do not necessarily have to complete an Accounting or Actuarial degree, but this typically shortens the length of time it takes to become qualified as it is likely you will receive several exemptions from the professional exams, providing you have done well enough in your degree.

Whilst the qualification requirements are very similar, actuaries and accountants do need some different skills. We tend to associate both as maths-orientated careers, however, a very basic level of maths is needed to be an accountant, but you do need to relish working with numbers. Actuaries on the other hand need a very high mathematical calibre, particularly in statistics. Both accountants and actuaries must have strong communication, analytical, and management skills. It is also becoming more and more important to have IT skills, especially in Excel and some type of programming language.

MMA Style Actuary vs Accountant 

Outside the office if we put an actuary and an accountant into the ring, who would win?

The Actuarial Assassin vs The Iceman (Accountant)

actuary vs accountant: actuarial assasin
actuary vs accountant: iceman accountant

Taking a break from all the office work, how would the 2 compare?

Taking the ring for the accountants we have Chuck Liddell (51) – The Iceman. Chuck studied accounting in California before deciding that he had an abundance of personality to only be an accountant and started focusing on his fight career. With many world titles under his belt, coming in at 205lbs and known for his one-punch knockouts, he would be a tough one to beat for Jon Forster (43) – The Actuarial Assassin.

Jon graduated from college in New Jersey before moving up the actuarial career ladder at an exponential rate. With only one amateur title and weighing only 145lbs, he would definitely be the underdog in the ring. Would the Iceman use one of his ‘lightning-fast combos’ or with his strong actuarial knowledge, could the Actuarial Assassin use all the data from the Iceman’s past fights to predict his every move? As an actuary, if we asked Jon what his likelihood of winning the fight would be, we cannot see him giving himself good odds. Jon may be better at sticking to his day job but at least he is a fully qualified actuary as opposed to only having an accounting degree.

Whilst it might seem like the MMA world is miles apart from the actuarial and accounting industries, there are common transferable skills between them. As Jon has said in one of his interviews: “I always point out that the same traits that made me a top Division 1 wrestler in college and MMA fighter—work ethic, determination, drive, commitment, leadership, ability to learn, and ability to overcome adversity—also allowed me to be successful in my profession.”

Actuary vs Accountant - Which is Better?

Having largely compared the two, both are profoundly reputable careers with high job security once qualified. It is difficult to say which is overall better as although actuaries tend to get paid more, they do tend to have to study and work harder so it really comes down to finding the right balance for every individual.

However, as an actuarial student, would I say that I am biased towards actuaries?

The answer is yes.

The actuarial career definitely seems like the best one to choose.

“This is a guest article written by Erin Gillen. Erin can be found on LinkedIn here.”

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