Let us first start with an introduction to CFA vs FRM
The Chartered Financial Analyst (CFA) is the most respected investment credential in the world and it is offered by the CFA Institute. The curriculum, format of examination, evaluation, awarding of the charter is performed by CFA Institute.
Candidates who fulfill all the terms and successfully complete the program will be awarded the CFA charter and becomes CFA charter holder. The charter is known as a Gold Standard of the investment world.
The Financial Risk Manager (FRM) is a professional designation awarded by the Global Association of Risk Professionals (GARP) to the candidates who successfully complete this certification program. It is a globally recognized standard for those who manage risk.
With the rapid changes in the finance industry worldwide there is a need in professionals who manage risk, money, and investment to obtain globally standardized up-to-date knowledge and FRM aims to fill that gap.
To Enroll for CFA level 1 the candidate should
- Have a bachelor’s (or equivalent) degree
- or be in the final year of the bachelor’s degree program at the time of registration
- or have four years of professional work experience (does not have to be investment-related)
- or have a combination of professional work and college experience that totals at least four years. Part-time, summer, or internship work experience is not allowed.
- Be a member of the CFA Institute.
- Adhere to the CFA Institute Code of Ethics and Standards of Professional Conduct
- Apply for membership to a local CFA member society, and
- Complete the CFA Program.
There are no educational or professional requirements to appear for the FRM Exam. It is a practice-oriented examination offered in two parts; questions are designed to relate theory to practical, real-world, problems.
In order to become a Certified FRM after passing the FRM Exam Part 1 & 2, candidates must demonstrate a minimum of two years of risk-related full-time professional experience positions including portfolio management, risk consulting, and other fields.
CFA vs FRM
Definitely, Courses vary from each other in the content and focus aspect,
- CFA looks in and out into, the finance world whereas; FRM looks into, Risk Management aspects of finance.
- CFA program covers more on Portfolio management, Ethics, Valuation, etc. and FRM covers more about risk-related functions.
- Some topics may be similar in some aspects like hedge funds, fixed income, statistics, etc.
Exam Details (CFA vs FRM)
- The CFA Program includes a series of three-level exams wiz. Level 1, Level 2, and Level 3, each culminating in a six-hour written exam held in over 180 locations around the world. For earning a CFA charter one has to pass all three exams sequentially
- Level 1 exams are held in June and December. Levels 2 and 3 are held only in June.
- The minimum time duration within which the program can be completed in 18 months or 24 months (depending upon the month of application for level 1) if the candidate clears every level in one go.
- The minimum requirement for completing the CFA program can be two and a half years, but candidates can take their own time for completing it.
- The candidate can take the time as per their need to complete the CFA program. The exam results never expire and there is no limit to the number of times one can sit for each exam level.
- Exams are offered only in the English language.
- The FRM exam is offline exam with and it is a multiple choice questions-based exam and it is of two parts.
- This exam is conducted in the English language, twice a year. The months are May and November.
- The duration for each part of the exam is four hours. Part 1 exam has 100 Multiple Choice Questions (MCQ’s) and Part 2 has 80 Multiple Choice Questions. Part 1 exam is conducted in the Morning session and Part 2 in the afternoon session. No negative marking for wrong answers.
- Part 1 exam must be cleared by the candidate in order to have Part 2 graded.
Fees Structure (CFA vs FRM)
- For taking the CFA exam the first time one needs to enroll for it for which they have to pay an initial one-time enrollment fee of US$450 with addition to the exam registration fee.
- For the next exams, they need not pay enrollment fees.
- In the general exam, the fee ranges from US$2,550 to $3,450 as per the deadline approach.
For new candidate enrollment fees is US$ 400 and exam fees is US$ 425 per part for earlier registration but for late registration it ranges from US$$1,175 and $1,775.
CFA vs FRM – Job Opportunities
Roles which you will perform as a CFA charter holder:
- Asset management roles, including:
- Portfolio Managers
- Fund Managers
- Risk Managers
- Financial advisers
- Private bankers
- Corporate Financial Analyst
- Research Analysts
- Chief Executives
- Hedge fund Research
- Investment Banking
- Investment Management
- Relationship Manager
The FRM certification provides with varied career options in Risk Management, Trading, Structuring, Modeling, etc. FRM holders can have positions such as:
- Chief Risk Officer
- Senior Risk Analyst
- Head of Operational Risk
- Investment Risk Management
- Investment banks
- Asset management firms
- Corporations (including non-financial corporations)
- Consulting firms
- Hedge funds
- Insurance firms
- Credit agencies
- Government/regulatory agencies
- Risk and technology vendors
CFA vs FRM Summary
|The CFA Program includes a series of three-level exams wiz. Level 1, Level 2, and Level 3 with Multiple Choice Questions and essay questions.||The FRM exam is of two parts and it is multiple choice questions based exams.|
|Enrollment fee of US$450. Exam fee ranges from US$2,550 to $3,450 as per deadline approach||Enrollment fee of US$ 400. Exam fee ranges from US$1,175 and $1,775 as per deadline approach|
|Exam Period||Level 1 exams are held in June and December. Levels 2 and 3 are held only in June.||This exam is conducted in the English language, twice a year. The months are May and November.|
|Exam Availability||Only one exam is taken at a time||Part 1 and 2 can be taken together but Part 2 will be graded only if part 1 is cleared.|
|Focus||Corporate Finance, Ethics, Economics, Fixed Income||Portfolio Management, Market Risk, Business Risk, Operational Risk|
|Time Required for the course||Minimum time duration for completing the exams is 1.5 years to the limit how candidate clears the levels.||Both the exams can be taken on one day.|
|Career Objective||Investment Banking, Research, Analysis etc.||Risk Management, Banking, Finance etc.|
|Preparatory course by eduCBA||Yes for Level 1||Yes for Level 1|
CFA vs FRM Infographics
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