Updated October 11, 2023
What is CFA vs FRM
The Chartered Financial Analyst (CFA) is the most respected investment credential in the world, and the CFA Institute offers it. The curriculum, format of examination, evaluation, and awarding of the charter are performed by the CFA Institute.
Candidates who fulfill all the terms and complete the program will be awarded the CFA charter and becomes CFA charter holder. The charter is known as the 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 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 for professionals who manage risk, money, and investment to obtain globally standardized, up-to-date knowledge, and FRM aims to fill that gap.
Requirements CFA vs FRM
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.
- Have four years of professional work experience (does not have to be investment-related).
- Or have 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 in two parts; questions are designed to relate theory to practical, real-world problems.
To become a Certified FRM after passing the FRM Exam Part 1 & 2, candidates must demonstrate at least two years of risk-related full-time professional experience in positions including portfolio management, risk consulting, and other fields.
Courses vary from each other in the content and focus aspects,
- CFA looks in and out into the finance world, whereas FRM looks into Risk Management aspects of finance.
- The CFA program covers more on Portfolio management, Ethics, Valuation, etc., and FRM covers more about risk-related functions.
- Some topics may be similar, like hedge funds, fixed income, statistics, etc.
- 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 worldwide. To earn a CFA charter, one has to pass all three exams sequentially.
- Level 1 exams are held in February, May, and August. Exams for Level 2 are held in May and August. Level 3 exams are held in February and August.
- The minimum duration within which the 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.
- The minimum requirement for completing the CFA program can be two and a half years, but candidates can take their time to complete it.
- The candidate can take the time needed 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 an offline exam and 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 (MCQs), 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.
- The candidate must pass the Part 1 exam to have Part 2 graded.
Fees (CFA vs FRM) (Updated 2023)
|CFA Exam Costs||FRM Exam Costs|
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 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 Table 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 has two parts and multiple choice questions-based exams.|
|Exam Availability||Only one exam is taken at a time.||You can take Part 1 and 2 together, but we will only grade Part 2 if you have passed Part 1.|
|Focus||Corporate Finance, Ethics, Economics, Fixed Income||Portfolio Management, Market Risk, Business Risk, Operational Risk|
|Time Required for the Course||The minimum duration for completing the exams is 1.5 years, to the limit of how candidates clear the levels.||Both exams can be taken in 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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