When candidates are trying to decide which designation they want to pursue, the comparison of the FRM vs CFA often comes to mind. The FRM is an excellent way for candidates to improve their knowledge of market risk, operational risk, credit risk, integrated risk management, valuation and risk models, and risk management in investment management, among other topics. Candidates can choose to take the FRM exam whether they are currently a CFA charter holder or if they plan on becoming one in the future.
Since the skills sets for the CFA and FRM complement each other very well, many CFA holders are also FRMs. For many finance professionals, it is not a case of FRM vs CFA, but instead FRM and CFA!
Demonstrating your competencies in financial risk via the FRM designation is a win-win for CFA charter holders, especially given the prominent role that CROs and risk managers are now taking in financial institutions in the wake of the global financial crisis.
The Bionic Turtle forum is an excellent place to discuss the benefits of becoming a certified FRM, and to speak with others who have chosen to pursue both designations.
FRM vs CFA Comparison Chart
|CFA Exam||FRM Exam|
|General investment knowledge (broader than deep)||Focus on risk management (deeper than broad)|
|Ten Topics: |
Standards, Quantitative Methods, Economics, Financial Reporting & Analysis, Corporate Finance, Equities, Fixed Income, Derivatives, Alternative, Portfolio Management
|Nine Topics: |
Foundations of Risk Mgmt, Quantitative Analysis, Financial Markets & Products, Valuation and Risk Models, Market Risk, Credit Risk, Operational Risk, Investment Risk, Current Issues
Portfolio Management, Investment (Equities, Bonds) Research, and Alternatives (Hedge Funds)
Risk and risk-related at Banks, Insurance Firms, Assets Managers, Hedge Funds and Professional Services
|Global recognition as gold standard: over 90,000 CFA charterholders and 160,000 candidates per year||Rapidly growing at 22% per year since 2003: over 31,000 Certfified FRMs and just breached 40,000 candidates per year|
|3 exams in sequence (quickest path is 18 months)||2 exams (is possible to sit both at once)|
|June and December of each year||May and November of each year|
|Level 1 cost is $1080 (early) to $1660 (late), |
Level 2 cost is $630 to $1,210,
Level 3 cost is $630 to $1,210.
Cost includes books.
|Part 1 cost is $900 (early) to $1,200 (late), |
Part 2 cost is $645 to $945.
Cost includes books.
|4 years of relevant work experience required||2 years of relevant work experience required|
|38 to 43% pass rate||46% to 57% pass rate|
|Multiple Choice, Item Set and Essay Questions||Multiple Choice Only (4 choices)|
|Exam by CFA Institute||Exam by Global Association of Risk Professonals (GARP)|