Let us first start with an introduction to CFA vs FRM
CFA
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 charter is performed by CFA Institute.
Candidates who fulfill all the terms and successfully complete the program will be awarded with the CFA charter and becomes CFA charterholder. The charter is known as a Gold Standard of the investment world.
FRM
The Financial Risk Manger (FRM) is a professional designation awarded by the Global Association of Risk Professionals (GARP) to the candidates who successfully completes 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.
Requirements
CFA
To Enroll for CFA level 1 the candidate should
- Have a bachelor’s (or equivalent) degree
- or be in the final year of 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.
FRM
There are no educational or professional requirements to appear for the FRM Exam. It is practice-oriented examination offered in two parts; questions are designed to relate theory to practical, real-world, problems.
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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)
CFA
- 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 program can be completed is 18 months or 24 months (depending upon the month of application for level 1) if the candidate clears every level in one go.
- 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 English language.
FRM
- The FRM exam is offline exam with and it is multiple choice questions based exams and it is of two parts.
- This exam is conducted in English language, twice a year. The months are May and November.
- Duration for each part of 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 Morning session and Part 2 in afternoon session.No negative marking for wrong answers.
- Part 1 exam must be cleared by candidate in order to have Part 2 graded.
Fees Structure (CFA vs FRM)
CFA
- For taking CFA exam first time one need to enroll for it for which they have to pay an initial one time enrollment fee of US$440 with addition to exam registration fee.
- For next exams they need not pay enrollment fees.
- In general exam fee ranges from US$800 – US$1170 as per deadline approach.
FRM
For new candidate enrollment fees is US$ 300 and exam fees is US$ 350 per part for earlier registration but for late registration it ranges from US$475-US$650.
CFA vs FRM – Job Opportunities
CFA
Roles which you will perform as a CFA charterholder:
- Asset management roles, including:
- Portfolio Managers
- Fund Managers
- Risk Managers
- Financial advisers
- Private bankers
- Consultant
- Corporate Financial Analyst
- Research Analysts
- Accountants
- Chief Executives
- Auditors
- Hedge fund Research
- Investment Banking
- Investment Management
- Relationship Manager
FRM
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
- Director
- Investment Risk Management
Industries includes:
- Banks
- 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
CFA |
FRM |
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Controller |
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GARP |
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Exam Levels |
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. |
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Fees |
Enrollment fee of US$440. Exam fee ranges from US$800 – US$1170 as per deadline approach | Enrollment fee of US$ 300. Exam fee ranges from US$350-US$650 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 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 |
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