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GARP's 2017 FRM Information Session + QA

Nicole Seaman

Chief Admin Officer
Staff member
Subscriber
Yesterday I attended GARP's FRM Information Session + QA webcast, which provides candidates with very helpful information about the FRM exam. I took notes during the information session, and wanted to post those notes here in case they might be helpful :)You can also view the on-demand webcast HERE.

FRM: Leading global professional designation for risk management
  • Over 47,000 registrations in 2016
  • Annual growth of 13.4% since 2010
  • Candidates from all areas of financial services industry, including banking, asset management, and regulation
What’s New in 2017? For the FRM, increased coverage of:
  • Characteristics of financial institutions
  • Time series analysis
  • Validating risk models
  • Factor theory of investing
  • Retail credit and securitization
  • Current issues – bitcoin technology and economics, electronic trading, market and funding liquidity risk, negative interest rates, and emerging market debt.
Registration




Q&A Session (questions answered by Bill May, SVP, FRM Program Manager)


How long does it take to prepare and is there guidance available?

How long it takes to prepare really depends on the individuals background. Some may have already covered the topics in other courses or within their current career. Their study time may be less than someone coming in with no experience. We do a survey each year asking this question. The median of the distribution is around 250 hours. It is not trivial. It is comparable to what you would see with other certification programs. It takes dedication to prepare for the FRM exam. I encourage people to look at the study guide and learning objectives to get a sense about how they feel about what is going to be tested on the exam.

We do try to help with a 15-week study plan, which we make available on our website and via email once early registration ends. Some people follow it religiously. They do exactly what the email says every week. For others, it just helps to keep them on pace and helps them to not let things slide too much. It is designed to be flexible. We know that everyone has different things going on in their life, and we want everyone to benefit from the study plan.

What can people to do practice? What is the extent of the practice exams. Do the books contain practice questions?

The practice exams are full length exams. They are drawn from prior actual FRM exams so they are not "toy" questions. They should be reflective of what you should see on the exam. They come with full explanations to the answers. They give references to the readings. Working through the exams will help to identify your strengths and weaknesses so we really recommend taking the practice exams.

The books are key. Reading the books should be very helpful in helping someone to prepare. In the front of each chapter, the relevant learning objectives are listed. Read through those learning objectives before starting that chapter to find out what you are going to need to get out of that chapter. Can you answer the questions pertaining to that learning objective after reading that chapter? If not, this will show you that you may need to go back through that chapter again.

For someone who may have deferred the exam or need to retake it, if they have books from prior years, where can they assess what has changed and can they use the prior books?

The curriculum is revised annually. The current curriculum will be good for the May and Nov exams. A new curriculum will be published in 2018. The changes are not overly dramatic, particularly in Part 1. Part 2 does change a bit more, as it is a more fluid area, especially the Current Issues topic. There will be changes from year to year and we publish a document on our website called "Study Guide Changes". It compares the current curriculum to the older curriculum, and it lists what has been added or dropped. So if you did pursue the certification in a prior year, that is a way that you can see what has changed. That is going to play into the books. If you have books from last year, a sizable portion of them will still be applicable because that part of the curriculum did not change. However, there will be new topic and reading areas so those books would not be sufficient for anything that has been added in 2017.

Do you need to be a mathematician or how well do you need to know math?

There is a mathematical component to the FRM exam, as there is a mathematical component to the risk management community and profession. You do not need to be a mathematician. If you look at the Quantitative Analysis section, it will give you a sense of what you will need to know in terms of math. To get a basic sense, think of an advanced finance class or a basic graduate class in finance with probability, statistics, regression, etc. It is not a math test. You are not asked to prove anything, but a certain comfort level with math is helpful.

What is the pass rate for the exam?

The pass rate changes from year to year, but I would say if you want to think of it in a ball park sense, Part 1 tends to be in the mid-40% range. In 2016, the May and Nov pass rates were right around 45%. The Part 2 are slightly higher around 50 to 55% partly, I think, because these are folks who have already passed Part 1 so it is a slightly filtered population. The pass rate reflects that.

Guidance on where people need to find the readings once they register?

The books are available for purchase through our website. The free readings, which are all of the current issues readings and regulatory readings are also on the website. If you encounter any difficulties finding them or with any of the registration process, send an email to [email protected]. There is a team that responds specifically to these questions or concerns.

Work experience

We do ask for 2 years of relevant work experience. We will also look at experience prior to pursuing the certification. The 2 years do not need to be strictly as a risk manager. They need to be roles in which the knowledge, the skill and concepts of risk management which are covered in the FRM can be applied. They need to be risk relevant roles. We get folks who are programmers who program on a trading desk and work with risk people building risk models. We get people who are in sales of financial products. They need to understand what the risk characteristics are.

There is a philosophy that everyone is a risk manager, but others may be in different roles. They are still responsible and affected by risk factors and risk issues. We try to be flexible. There is an FAQ section on the website which should list a number of positions that are looked upon favorably. Your best bet is to look at the experience which you have, and think is this something where there are opportunities that I apply risk management skills effectively. That will give you guidance on whether that is relevant. You can also reach out to member services for guidance.

Differences between CFA and FRM

The CFA is a wonderful certification The focus of the CFA and the focus of the FRM are different. The FRM grew up in the risk management community and the risk profession. All of the situations, securities and institutions that it looks at is in the risk profession. CFA looks at issues from a different perspective. When you look at the risk return tradeoff, for example, the returns come from the risk which you are taking on. Being able to understand the risk factors of that, is crucial. It is the most important starting point for conducting your analysis. The market tells us that they are complimentary certifications. We have a lot of people who pursue the FRM and then pursue the CFA and vice versa. They have different emphasis but they should help you get a different view on the securities in the markets.

Do any schools use the FRM and how relevant is FRM for those who are entering the workforce compared to those who have been in the workforce already.

GARP and the FRM has a very active academic outreach program. There is a list of partners on our website of universities that align their curriculum with the FRM curriculum. There are some that embed it into their program and some may be required to take the FRM to complete their program. You will see contact information in that list on our website also.

We are very attuned to the needs of academia, and one of the big needs is for them to know what industry wants so they can stay relevant. They view the FRM as very helpful in that. We assess what industry and practice needs so they can better inform their curriculum development. We do get students who are still in school, maybe in a master's program and they want to get into risk management they will pursue the certification while they are in school. sometimes they take part 1, go into the work force and then take part 2. Some take both parts while in school. We get around 20% of the people who take the FRM are students and are engaged primarily in master's programs.

Where can you find day of exam tips?

All of that information is made available to you on our website. It is also on our FAQ page. Our admin team, once you register, will communicate with you and send information on the rules and regs about different calculators, what you can and can't bring to the exam, writing utensils, what type of ID. Take that guidance seriously. We test tens of thousands of individuals around the world. To be fair, we need to have a level playing field.

What is the relationship between FRM and ERP

In terms of quality and seriousness of the certification process and the exam, they are similar. IN focus area, the ERP developed out of demands not just fro the energy industry but also the financial services firms that deal in energy products. It attempts to address those needs. There is a portion that is going to deal with financial products. Maybe not the same as the FRM but not wholly dissimilar Certainly more related to the energy world. There is a portion that covers the physical aspects of energy risk which is really not something that the FRM gets into. if someone is interested in those areas, I would encourage you to take a look at the ERP. It is a fine program looking at a certain area of the financial services world that is critical, but that is it's major focus.
 

emilioalzamora1

Well-Known Member
is there any link available for the broad public as well, Nicole? I want to make sure that those ignoramus out there who have never heard about GARP can access it.

Thank you!
 

emilioalzamora1

Well-Known Member
Go to 1. Garp.com 2. FRM 3. Study Materials 4. and then download 'Learning Objectives'. On this page you can also purchase the GARP FRM books.

Don't know about your 2nd question.
 

deepak.batra

New Member
Go to 1. Garp.com 2. FRM 3. Study Materials 4. and then download 'Learning Objectives'. On this page you can also purchase the GARP FRM books.

Don't know about your 2nd question.
thanks emilioalzamora1. My 2nd question was that I am not able to see end of chapter questions in FRM part 2 books by GARP, 2017 edition. Have they decided to do away with end of chapter questions? My first question was "Current readings", not the books. The books I have already purchased from GARP. But the current readings are free and to be downloaded from the GARP website. I am not able to find from which part of website I can download. Thanks.
 

Linghan

Active Member
Hi @David Harper CFA FRM I can't locate "Current Issues in Financial Market" in any of my four 2017 Part II books, which are purchased on GARP website!! Please help me on that. Is it a fifth book of part II exam? Thanks!
 

mkh

New Member
Thanks for this wonderful site @David Harper CFA FRM . This is really a wonderful website to keep us updated with the latest news. Many thanks for investing your time in answering the queries to newbies , even though they are very naive.

@Nicole Seaman @David Harper CFA FRM Does the enrollment fees expire after 4 years. Is it something introduced from this year 2017 . I thought the enrollment fees was one time fees enabling a candidate to write exam any time. After a candidate passes his FRM 1 then he gets only <4yrs to pass the FRM II exam. Can you please clarify .
 

mkh

New Member
From GARP WEB SITE :
upload_2017-1-20_19-30-19.png
and

SCREEN SHOT FROM Q AND A SESSION :

upload_2017-1-20_19-30-56.png

looks contradictory .. Can you please clarify on the vaild for 4 years part..
 

Nicole Seaman

Chief Admin Officer
Staff member
Subscriber
HI David / Nicole, where can I find the current readings in the GARP website. I am not able to find it. thanks.

Hi @David Harper CFA FRM I can't locate "Current Issues in Financial Market" in any of my four 2017 Part II books, which are purchased on GARP website!! Please help me on that. Is it a fifth book of part II exam? Thanks!

Hello @deepak.batra and @Linghan

The Topic 9, Current Issues readings are located on the GARP website under the FRM tab >Study Materials here: http://www.garp.com/#!/frm/readings.

UPDATED TO NOTE: I've uploaded all of the current issues readings to our forum resources section also: https://www.bionicturtle.com/forum/resources/categories/frm-p2-t9-current-issues.1/

Nicole
 
Last edited:

Nicole Seaman

Chief Admin Officer
Staff member
Subscriber
From GARP WEB SITE :
View attachment 1003
and

SCREEN SHOT FROM Q AND A SESSION :

View attachment 1004

looks contradictory .. Can you please clarify on the vaild for 4 years part..

Hello @[email protected]

I contacted GARP regarding the enrollment fee being valid for 4 years. This is their response, "The enrollment fee “4-year clock” starts ticking once you have passed the FRM or ERP Exam Part I. If a candidate never passes Part I, then yes it will go on forever until they do."

I hope this helps to clarify.

Nicole
 

evelyn.peng

Active Member
Hello @deepak.batra and @Linghan

The Topic 9, Current Issues readings are located on the GARP website under the FRM tab >Study Materials here: http://www.garp.com/#!/frm/readings.

UPDATED TO NOTE: I've uploaded all of the current issues readings to our forum resources section also: https://www.bionicturtle.com/forum/resources/categories/frm-p2-t9-current-issues.1/

Nicole
Hi Nicole,

Now that GARP has overhauled Part II in 2020, I cannot locate the study material for "Current Issues in Financial Market" again. I tried the link you had above but it takes me to GARP's landing page instead. I've purchased the books but that topic is missing again. Would you be able to help me find the link?

Thank you,
Evelyn
 

Nicole Seaman

Chief Admin Officer
Staff member
Subscriber
Hi Nicole,

Now that GARP has overhauled Part II in 2020, I cannot locate the study material for "Current Issues in Financial Market" again. I tried the link you had above but it takes me to GARP's landing page instead. I've purchased the books but that topic is missing again. Would you be able to help me find the link?

Thank you,
Evelyn
Hello @evelyn.peng

GARP provides the current issue readings on their website under FRM>Study Materials>Required readings here: https://www.garp.org/#!/frm/readings/required . I believe that they updated their website last year so the link that I provided here in 2017 does not redirect correctly anymore. I hope this helps! :)

Nicole
 

evelyn.peng

Active Member
Hello @evelyn.peng

GARP provides the current issue readings on their website under FRM>Study Materials>Required readings here: https://www.garp.org/#!/frm/readings/required . I believe that they updated their website last year so the link that I provided here in 2017 does not redirect correctly anymore. I hope this helps! :)

Nicole
Thank you so much Nicole. Out of all the sources, BT have consistently been the only provider that responds to customer questions in a timely and thoughtful manner. Can't express how much I appreciate this.
Evelyn
 
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