One question we often get from students is whether we recommend they take LAM or ERM to fulfill the 2 or 4 hour FSA exam requirement. We thought it would be helpful to organize our thoughts in this blog post. As you would probably guess, there is no one-size-fits-all answer, and we will outline the main considerations below. Eddie and me (Zak) have co-taught ERM and LRM/LAM for a while now, so we do think we can definitely give you some helpful guidance here.
First, if you are looking for a shorter exam, then you want LAM. Not only is the ERM syllabus much longer, but also ERM has a case study and LAM does not.
Here is a rough sketch of what you’re looking at:
LAM Syllabus ~ 800 source material pages
ERM Syllabus ~1200 source material pages + 200 page case study
Above are “source material pages” meaning the actual readings the SOA puts on the syllabus. This is not the number of pages for the TIA study manuals, but they are roughly similar proportions. Please note that these are approximate figures, and they do change over time, but this should give you a good general idea of the relative syllabus size.
As far as difficulty, since the exams are on a curve it does come down to relative performance. I would recommend downloading a few past exams and glancing at them. You might get a feel which is easier to you after looking at a few past SOA exams. For me, LAM is simpler – it might require a bit more technical knowledge of the life track, but that’s something I enjoy. ERM, on the other hand, is much more verbose – the questions can often span 3 pages. The case study for ERM takes a significant amount of preparation and effort. There is no case study for LAM so that will save you time. The case study is a major factor to consider.
I figured it’s also good to discuss potential challenges with LAM to fully lay out both sides. LAM is a newer exam so there won’t be as many past SOA exam questions to practice with. LAM started in 2019 compared to ERM which started in 2012. The other challenge is that since LAM is only a 2 hour exam, you run the risk of failing from “bombing one question”. You have a bit more of a cushion with ERM since it’s a 4 hour exam.
It may be worth briefly mentioning that the SOA LAM exams have had some quality issues. In particular, for the Spring 2021 exam, the SOA had to throw out 4 out of 40 points. When studying for any FSA exam, understand that the past SOA questions and solutions are often not perfect. They are written by volunteers with busy full time-jobs. Often the question and solution creating process goes through many iterations; there can be communication breakdowns in this process which lead to errors.
We also wanted to mention that LAM and ERM have very small overlap in terms of syllabus readings. Years ago, there was more of an overlap between the exams. Currently, there are just a few readings that crossover between the exams. You can essentially think of them as entirely separate exams with separate syllabi.
These links might also be helpful:
http://theinfiniteactuary.com/blogs/exam_ila_lrm/2018/04/26/lp-lfv-lrm-or-erm-which-should-i-take-first/
http://theinfiniteactuary.com/blogs/exam_ila_lrm/2019/07/10/what-does-it-take-to-pass-an-fsa-exam/
To summarize, we recommend doing the following to help guide your decision:
- For both LAM & ERM, check out a few past exams on the SOA website to get a feel for what might be a better fit for you
- Look through the TIA product page and samples
- Open the SOA syllabus for each exam. Skim through it, and even feel free to click some of the links to syllabus readings. You don’t need to read them, but you can skim through them to get a feel for the material covered on each exam
- Consider your backgrounds and interests. You’ll be spending a lot of time studying for the exam you choose, so pick one that you can see yourself being motivated to allocate enough study time for
- Talk to other actuaries who have taken either exam to get their perspective
Here’s a list of pros/cons which you may find helpful. Keep in mind this is just our opinion!
Pro LAM
Pro ERM
- More established exam (since 2012), meaning more past exam questions, etc.
- “Bombing one question” does not pull down your score as much since the exam is 80 points for ERM instead of 40 points for LAM.
Lastly, we highly recommend once you make a decision to not second guess yourself. Make a well-informed choice of which exam to take, and then go for at it with 100% effort. We hope this helps you decide and good luck on your FSA exams!