Graduate Profile

Finlay Stewart - BSc Physics 2006 - Actuary

Finlay StewartWhen I arrived at St Andrews, ready to start my Physics degree, I had very little idea what I wanted to do when I was finished. Except that I knew I probably didn’t want to go into research, I was too mercenary for that. Instead, I spotted a pile of careers books on a table outside the door to the labs, one of which was entitled, “Actuaries”. It sounded very interesting, and after some further reading, I decided to apply for internships early in my 3rd year, and that summer started working for Hewitt Associates in London. The great thing about my internship was that I was very much treated as a new graduate would be, doing real work for real clients. After a multi stage selection process, involving an interview, numerical and verbal problem solving tests, a presentation, and of course the 9 week internship itself, I was offered a graduate job for the following year. I also began to wonder if the Transferable skills for Physicists module had in fact been designed with the help of a recruitment consultant, so similar was it to the selection process! The following year, after graduating with a BSc Hons in Physics, I began my career with Hewitt (again), training to be an actuary, working in the field of pensions consultancy.

According to one definition, an actuary is “a business professional who deals with the financial impact of risk and uncertainty.” Most of the work that I am involved in deals in some way with estimating what the cost of providing a given person’s pension will be. The actual cost will depend on a multitude of things: inflation, what returns the company will receive on its investments, and when the pensioner actually dies, to name but a very few. And while it’s true that I doubt I’ll ever find a use for Schrödinger’s equation in the actuarial world, there’s no doubt the concept of an uncertain value is something any physics student will be happy with.

When I arrived at Hewitt, I was assigned to perhaps 8 or 9 clients, or companies that Hewitt advises on their pension schemes, and the majority of my work comes from these. Each client has a “team” of about 5 people assigned to it, which means across my clients I get to work with a lot of different people. Some of the work is fairly common, an example of which would be calculating an individual member’s Transfer Value. This, put simply, is calculating the expected cost of providing the member’s pension, a value that legally they are entitled to move from a previous employer’s pension scheme to their current one. In my first few months, I probably did at least one of these a day. As I’ve become more experienced, and new people have joined, I now tend to check other people’s transfer value calculations, as much as I do them myself. Which gives me more time to take part in the less “standard” pieces of work we do for our clients, a few examples I’ve given below:

Recently, legislation changes meant that a pension scheme member could take more of their pension as a tax free lump sum when they came to retire. One of my clients wanted to know what the implications of this had been on their pension scheme. And so, we had to use data on recent retirements to perform an analysis on what the retirees were actually doing, and how much of a long term saving the pension scheme gained when they gave up pension for an immediate lump sum.

For another client, we were tasked with providing an estimate of what the recently established Pension Protection Fund’s annual levy for the scheme might be. Hewitt uses standard models for this type of work that can be repeated across clients, but there’s still plenty of work in turning the client specific data into the inputs that the model needs. Data manipulation is not perhaps the most glamorous of jobs, but it is important and more interesting than you might think, as it does sometimes take a fair bit of ingenuity. Especially when, as is usually the case, you don’t have all the data you might ideally have wanted, and have to make assumptions that you think won’t underestimate the levy. Coming from a Physics background, the idea that your results can only be as accurate as the initial data, was another concept I was quite familiar with.

Of course, I wouldn’t be able to tell you about being an actuary without telling you about the exams. Qualifying as an actuary takes an average of about 5 years, and the exams are not easy! Nor is balancing studying and working full-time particularly easy, but it is a big part of training to be an actuary, and Hewitt lends a helping hand, as it does for all its graduates. The cost of sitting the exams (for the first attempt, and for any subsequent attempt you pass) is covered, as is study materials and tutorials. And especially useful is the bank of study days that Hewitt provides, to allow you time to study for the exams. In the run up to my first set of actuarial exams, I find myself “working” 4 days a week in the office. Although that’s not to say I work any less on my study days! Its hard work, but definitely worth it.

I hope I’ve been able to give you a fair description of life as a first year actuarial student. And more to the point, I hope I haven’t put anyone off! I’ve only just started down the road to qualification as an actuary, but I’m enjoying every minute of it!

Note:- Finlay is willing to communicate with any St Andrews students who wish to discuss with him an actuarial career. Bruce Sinclair can provide contact details.