The Essence of being a Profession

What sets professional bodies apart from trade bodies is that one of their core objectives is to act in the public interest as well as to support the needs of the membership. The Privy Council requires this to be demonstrated before granting a charter to a professional body. However, “acting in the public interest” is a term open to wide interpretation. We have drafted this note to outline how the Faculty and Institute of Actuaries (the UK Actuarial Profession) interpret their public interest role in the UK and what they expect of individual actuary members. It does not define what the public interest is in all circumstances.

The UK Actuarial Profession fulfils its public interest role by:

Its communications processes:

• being open, honest, and transparent
• acting impartially, reasonably, ethically and with a sense of justice towards its stakeholders [Footnote 1]
• contributing to the debate on the setting of standards in the financial sector in the UK and internationally
• speaking out, when it considers it appropriate to do so, on financial matters, particularly where the public might be ill equipped to understand the associated risks,
• contributing to the debate on government policy in financial matters and other areas where the profession has expertise by explaining its implications
• publishing material, when it considers it appropriate to do so, which will help the understanding of consumers of financial services and the members of pensions schemes

Its education and practice development processes:

• developing and maintaining relevant and high calibre qualifications and professionalism in actuarial science
• encouraging and undertaking research which progresses actuarial science and the body of knowledge in the areas in which actuaries specialise or can give actuarial insight based on their expertise
• providing a range of learning and development opportunities to encourage all working UK resident members to maintain up to date professional knowledge

Its regulation and enforcement processes:

• developing a code of ethics (Professional Conduct Standards) and ethical standards which members are required to follow
• requiring compliance with the continuing professional development scheme
• licensing those people deemed fit and proper to serve in the roles reserved exclusively for actuaries by issuing them with practising certificates subject to certain regulatory requirements
• enforcing its requirements by operating a disciplinary scheme which can ultimately deny an individual from practising in a reserved role or from being a member of the Profession
• requiring mentoring or supervision in certain circumstances

What the UK Actuarial Profession does not undertake to do as part of its public interest role is:

• perform the roles of the regulatory bodies set up by government to protect the public in relation to pensions and financial services
• put unreasonable or unnecessary constraints on its members’ ability to practise
• set technical actuarial standards, which are the responsibility of the independent Board for Actuarial Standards
• monitor the work of all actuaries
• provide pro-bono actuarial or financial advice to individual members of the public

It is the role of Government and Regulators to decide:

• which roles need to be reserved to actuaries
• what rules to impose on the financial services firms and pension schemes in order to protect the public
• when to give statutory protection for “whistle blowing”

Individual members of the Profession serve the public interest by:

• keeping up to date with their technical skills and competence and with professionalism issues
• complying with the Profession’s standards for conduct and ethics, including peer review requirements and the technical standards set by the Board for Actuarial Standards where they apply and other regulatory requirements
• being clear for which client they are working and bringing to their client’s attention any relevant conflicts of interest
• making sure clients who have fiduciary duties are made aware of the implications for the consumers of financial products and members of pension schemes of the actuarial work undertaken for them
• communicating the results of their work in such a way to enable the client to make informed decisions
• complying with the “whistle blowing” requirements of the FSA and the Pensions Regulator if there is failure to comply with legal or regulatory requirements
• reporting other actuaries to the Profession if they fail to comply with professional standards [Footnote 2]
• taking on appointments which have a specific consumer protection role, such as that of independent expert in insurance company restructurings

What individual members of the Profession are not expected to do is:

• assume the responsibilities of the regulators in protecting consumers of financial products and members of pension schemes including those of the clients for whom they are working
• put constraints on their clients beyond those required by laws or regulation
• proactively monitor other actuaries, unless appointed to do so
• make decisions that are properly the responsibility of their clients

1. Stakeholders include: the FSA, TPR, Government, FRC and its operating bodies, international standard setters, trade bodies in the financial services and pensions sectors, international actuarial associations, other professional bodies, the users of actuarial advice, employers of actuaries, educational establishments which provide actuarial related courses, media and the wider public who are the ultimate actual and potential beneficiaries of actuarial advice.

2. Unless legally restricted from so doing.