How far do I go? Answers to the associateship-fellowship question

Glenda Maki

We all know the benefits of attaining fellowship status–more money, legions of adoring fans–well, not quite. While many candidates enter the profession with the goal of becoming a fellow, others find fulfilling careers as associates. Which choice is right for you?

Weighing the costs and benefits

For some, the choice becomes a cost/benefit decision. "I was already in a management role doing the type of work I could have anticipated if I had an FSA and at the level that would be expected. I'm not sure if my experience was typical, but I believe it is not uncommon," says one actuary in the Chicagoland area.

Another Chicagoland actuary had a similar experience. He says he doesn't think of there being either advantages or disadvantages to being an associate, but acknowledges that it does take a great deal of effort to pursue fellowship. "And for some, like me, focusing that time and effort on other aspects of career development was more rewarding."

Not having the fellowship designation has had little impact on his career. "At the very first marketing meeting I had after starting our firm almost 13 years ago, the prospect started off the meeting by asking, 'Are you an FSA?' It's the only time I can remember being asked that question by a client or prospect."

His business partner, an ASA as well, also says that he has not encountered any disadvantages in his work or in interacting with audiences outside the actuarial profession (clients, attorneys, accountants). "I think within our profession there may be some individuals who feel an ASA isn't complete as an actuary." However, he adds that at his firm, "we encourage our actuaries to choose the course that fits best for them."

Considering external/family interests

For others, the decision can hinge on family responsibilities. One of the benefits of not pursuing the FSA designation, for Mark Cary, ASA, and chief actuary at Health Partners, in Philadelphia, Pa., was that it freed up time for his family. He got married and started a family around the same time he got his ASA. "I had taken one FSA exam seriously after that, and life just intervened."

Commitment to family was also why Karen Moritz, ACAS, associate actuary at USAA in San Antonio, Texas, decided to remain at the associate level. "I found myself going more slowly through the exam process with my three sons. Finally, when my middle son was diagnosed with a brain tumor, I made the official decision to shift priorities to my family." Her son has since recovered and she says that exams no longer are a priority for her, but says there is a possibility that she may work toward fellowship when her children are older.

What do employers think?

"There are situations in which companies may give more consideration to career associates rather than associates working toward fellowship because they may not want to or may not be able to support employee study time," says Sally Ezra, partner at D.W. Simpson & Company, an actuarial recruiting firm in Chicago. Companies may also seek out career associates because they don't want to lose an employee every 18 months if he or she is in a rotation–they often want someone who will settle into and be satisfied with their particular role. 

In addition, candidates who have a unique, hard-to-find skill set can be desirable to a company even though they are not fellows. "We find that these candidates are generally compensated as well as their counterparts with fellowship," says Ezra. "Conversely, though, those candidates may have some limitations when they are ready to make their next career move–those hiring for the candidate's ideal position may not consider a career associate."

Fellowship opens doors

Vinaya Sharma, FSA, associate actuary at Allstate Life Insurance Co. in Northbrook, Ill., says there are quite a few benefits to earning the fellowship designation. Fellows become more attractive to employers since the exam process generally indicates that they have "intelligence and discipline." He adds that fellows generally command a "fairly decent compensation, and thus a rather comfortable lifestyle–one side perk is that for those that come in contact with you and understand what it takes to get an FSA are usually rather impressed. It can be a nice ego boost from time to time."

How high can you go?

We all know that fellowship opens doors, but are there limitations as you rise within the ranks? "As anybody climbs the corporate ladder, there are fewer positions available," says Ezra.

Although the number of available positions tends to narrow the further one climbs up the corporate ladder (you can only have so many CEOs) actuaries have several skills that can help them move horizontally and/or vertically, says Sharma. However, some of the skills an actuary may acquire can be transferred to other nontraditional positions. For example, some companies have actuaries working as the CFO, which requires accounting knowledge; or chief risk officer (CRO), which looks at risks not traditionally contemplated (legal risk, etc.).

What are the options for fellows?

For those with a fellowship designation, many will go into management. For others, consulting is an option. Another possibility is to specialize in some sort of a niche market. "Having knowledge and experience that makes the person unique will offer options that would not be available to others. There are certain technical competencies that are uncommon, yet very sought after," says Ezra. Often that person's role could be more consultative or research-oriented if they decide not to go the management route.

So, let's talk in terms of dollars

For an ACAS, the salary range can begin at $66,000 and can reach over $200,000 with 20 years of experience. Someone who has earned the FCAS designation can start out at $101,000 and can reach upwards of $300,000.

ASAs can start out at $58,000, with the possibility of reaching over $200,000 per year, while FSAs can start out at $82,000 and can earn a salary of $280,000 or more. These numbers were obtained from the D.W. Simpson & Co. salary survey. For more information, visit DWSimpson.com/salary.

Consider carefully

It comes down to a choice. When deciding whether or not to continue with exams, candidates can still do well in their career, but they can also be excluded from consideration for certain opportunities. "If they are going to regret not getting their fellowship when they are being passed over by fellows, they should continue," concludes Ezra.

FSA

The choice is yours–both routes are challenging. And remember, if you decide that you want to work toward fellowship at a later date, you can, because candidate credits never expire. In addition, with the coming changes to the exam system, including the addition of Internet-based modules at the FSA level, candidates of the SOA could continue to make progress toward their FSA even if they are not active in the workforce or don't have the time available to devote to studying for a traditional exam.

FCAS

The CAS is considering a recommendation to have only one class of members–fellow.  This reflects the narrowing difference in requirements for associateship and fellowship over the years.  The 1997 report announcing the 2000 education redesign stated that “ACAS must imply competency to practice.” The 2004 report of the Task Force on Classes of Membership commented that “there are not significantly pragmatic differences between the two classes: Both classes of membership are exposed to the same high level of professional performance, conduct and legal liability for errors and omissions” (see CASACT.org/members/reports). Later this year, the Task Force on FCAS Education will make recommendations for revisions to the upper-level education structure.  Within this context, the CAS will consider the appropriate number of classes of membership.  If the CAS decides to discontinue the associateship class, existing associates would likely be able to maintain their designation but no new associateship designations would be granted.

Outside North America

If you aspire to work outside of North America, having the fellowship designation could be of benefit as well. For candidates of the SOA, having the FSA can  simplify matters for those considering working outside North America, as the UK, Australia, Hong Kong and other countries recognize the FSA designation.