Royal Mail Shares

(Genuine) Question: Have you ever worked in an Actuarial Consultancy before?

I have seen cases where 'ethical' actuaries have essentially made recommendations before even doing the work because that's the steer given by the client's CEO.

Guarding self-interest is (and should be!) done by ALL parties involved. Government/Public Sector get ripped off systemically because they are naïve & lack common sense. If you don't think to yourself; maybe the price is too low as it is 26 times oversubscribed let's renegotiate then an outsider can conclude you're a moron and probably deserve to be ripped off.

Offering shares at a discount is standard practice that is driven ultimately by demand.


I'm all for debates but one based on theory without sufficient allowance for the realities on the ground are probably best discussed in a University auditorium

 

Exactly. Without wishing to be brutal to human-kind, everyone responds to self-interest and incentives, good or bad. Psychologists like Dan Ariely have shown that most people will be dishonest for personal gain when they think they can get away with it.

So it's not that investment banks hire bad people or that bad people become politicians, it's that the incentives involved in being a politician or an investment banker can bring out the "badness" in people because there is so much to gain and little chance of being caught.

Of course I'd love to say that actuaries would be different and would be completely upstanding but I can't believe that, we're all human.

 

Wrong premise. NOBODY knows what anything is worth. You can guestimate it based on what you THINK and use experience (that sounds eerily actuarial).

Whenever doing anything leaves you vulnerable to criticism but it is better to try and fail than to be an armchair critic on the sidelines. Actuaries getting involved would at least mean they are relevant in high profile decisions that impacts everyone (here the taxpayer).

 

Then that's not ethical and they should be reported.

 

Essentially then our profession's skills are worthless if we are just fed some theory in the exams but in practice we make it up as we go along and come up with things to please bosses, such as commutation factor 25 or whatever.

 

That's just saying everyone is bad so it's ok to be bad. Low moral standard.

 

No I don't think it's incompetence, mind you that's probably the excuse the media gives them. It's more about vested interests.

 

Then people should not be so handsomely rewarded for guessing.

 

The Profession gives the impression is it evidence and information leading to advice and policy. However, as your example shows, for many it is advice or policy then scramble around for something to back up the desired policy.

So it's justifying something that's already been decided. I don't consider that a skill but deception and lack of integrity.

I think the only serious future for the Profession is to market itself as a genuine source of unbiased information and advice, achieved by tried and tested methods and rigour. Sadly, there will be bad apples who spoil it for everyone.

 

Where in that quote did I say it was okay to be bad?

I said the incentives are messed up, improve the incentives and you improve the outcome.

 

People of poor morals do get taken on by banks, political parties etc. it's not something they get corrupted with, they are corruptible in the first place. Indeed I would even argue that, although they'll never admit it, how corruptible a person appears to be is something that appeals to recruiters in these industries. Last thing they want is a person of good morals who'll blow the whistle from time to time.

 

The only serious future for the Profession is in remaining and increasing its relevance to society. Completely ignoring the human element to business & decision making will actually further cement outsiders current view as actuaries being a little socially awkward and lacking in the softer skills necessary to lead.

It's not a case of bad apples; it is a case of understanding there are multiple stakeholders who have different and often competing aims and desires.

Technically, the tried and tested methods and rigour you refer are often based on assumptions that don't hold in reality. Therefore, using a flawed model to solve real-world problem is spurious. World events don't follow pre-determined statistical distributions or data is often not credible or reliable to begin with.

 

Recruiters are only concerned with one thing - successfully placing candidates because of one thing: they get paid! They couldn't care less about anything else as their incentive structure doesn't recognise anything other than their sale figures.

I often tell people that the sad reality is people are too concerned about themselves to be interested in what the other person is doing.

 

Then the Profession is dead. There will always be people out there better at spinning (i.e. lying, deceiving), selling etc.

 

I suspect you're overlooking the small point that these clients are paying for a service. Of course you can't recommend garbage but you cannot ignore the 'hand that feeds you'.

I can also see that you probably haven't had much exposure to senior decision makers and the politics that must be worked through in order to make the 'right' decisions.

Of course 'right' doesn't really exist; it's more about what you can justify and the strategy and direction you want to go in.

 

To the contrary. If the Profession adopted your approach it'll probably be dead within 10 years. It's far too theoretical and probably better suited to University textbooks.

 

That's corrupt. Finding facts to back up the decision, rather than use facts to make a decision, is corrupt.

Also quit your patronising and incorrect assumptions about me. Stick to the issues.

 

It seems your vision of the Profession is that an Actuary is someone that finds some convenient clever-sounding evidence to back up what they wanted to go ahead with anyway.

 

That's a posh way of saying you have to be quite corruptible and engage in unethical activities

 

Only someone with low moral standards would agree with a statement like that.

 

I am not trying to patronise you at all! I'm 'forced' to make assumptions about you because it is the only way I can begin to coherently make sense of your ideas - in order to keep rigidly to the issues being discussed.