CFA® Program vs FRM Certification : Battle of Financial Certifications

For all the students going for International Finance Certifications, it is the most common point of debate whether to go for CFA® Program or FRM or both. Both certifications have international recognition and offer a wide range of enriching and rewarding career prospects. This is where the question arises “CFA vs FRM: Which certification to go for?”

It is very crucial for students to choose the right certification as for both certifications they have to put a lot of money, dedicate all their time and study rigorously. This all shouldn’t go as a waste. Moreover, they have to live with the career they choose and few years down the line they shouldn’t regret their choice. To an informed person, there might be a world of difference between these two certifications, but to a novice there is very little difference.

Let’s take a look at both of these certifications, their scope as a career and their prospects.

 

CFA® Program

The Chartered Financial Analyst® designation was originally intended for equity analysts working in the investment banking sector. Over a period of time (since its inception in 1963), its scope and importance has been recognized to the level where the CFA® Program now is often compared to Masters in Business Administration (MBA).

It has become one of the de-facto certifications that a professional graduate goes for when trying to target some specific positions in the investment and banking industry.

Career Prospects and Roles as a CFA® charterholder:

  • Portfolio Managers
  • Fund Managers
  • Risk Managers
  • Financial advisers
  • Private bankers
  • Consultant
  • Research Analysts
  • Accountants
  • Chief Executives
  • Auditors
  • Hedge fund Research
  • Investment Banking
  • Investment Management
  • Relationship Manager

Eligibility Criteria for CFA® exam:

  • A bachelor’s (or equivalent) degree or be in the final year of your bachelor’s degree program
  • Four years of professional work experience (does not have to be investment related)
  • A combination of professional work experience and education that totals at least four years (part time experience not counted)

 


 

FRM Certification

 

The Financial Risk Manager (FRM®) certification was originally intended for candidates who wanted to pursue the profession of a risk manager in financial institutions.

With increasing business competition and rapid changes in the finance industry, businesses require professionals who can manage risk, money and investment efficiently. This has raised the importance of Financial Risk Management and thus given this certification a recognition which it deserves.

Career Prospects and Roles as an FRM charterholder:

  • Chief Risk Officer
  • Senior Risk Analyst
  • Head of Operational Risk
  • Director
  • Investment Risk Management

Eligibility Criteria for FRM exam:

  • No educational or professional pre-requisites required to sit for either part of the FRM Exams
  • Minimum of two years of full-time professional experience required in risk-related profile

FRM Certification vs CFA® Program comparative analysis

The course contents of FRM and CFA® Program also vary a lot from each other. The CFA® Program covers more on financial analysis, ethics, asset valuation and portfolio management, whereas FRM covers more topics on risk, valuation at risk, models of risk, credit risk and so on. There is some common overlap between these two courses which are areas like credit derivatives, hedge funds, fixed income, basic statistics, risk/return metrics and correlation.

NOTE: The areas which do not overlap are as diverse as the careers they cater to.

 

 

Head-to-Head comparison:

FRM Certification
CFA® Program
Conducted by
GARP
CFA® Program
Exam Parts
FRM Part 1
FRM Part 2
CFA® level I
CFA Level II
CFA Level III
Fee (indicative and overall)
FRM Part 1 – $650 to $950
FRM Part 2 – $350 to $650
CFA® Level I – $1080 – $1660
CFA® Level II – $1070 to $1650
CFA® Level III – $1060 to $1610
Pass rate (Approximate)
40% to 45%
35% to 42%
Exam Months
May/Nov
June/Dec
Relevant For Candidates looking for jobs in
Banking, Risk Management, Financial Institutes
Research, KPO, Investment banking
Course Stucture:
Emphasis on
Quants,derivatives, Portfolio Management,
Market Risk, value at Risk, Credit Risk, Operation Risk & Basel
Quants, FSA, Ethics,
Economics, Corporate Finance, Equity, Fixed Income
Kind of Qustions Asked
Multiple choice questions
Multiple choice questions
FRM vs CFA® Salary (Average)
US – $70,000
India – INR 5,00,000
US – $75,000
India – INR 6,00,000
EduPristine Official Course Provider
FRM Certification Course Page
CFA® Program Course Page

Seeing the overwhelming response on this topic, we have created a video. Check it out!

Authorized by CFA Instititute and GARP for CFA® Program and FRM respectively, EduPristine provides the best online and classroom training for these courses

We hope this comparative analysis will help you in choosing the right career for yourself. In case of any queries or doubts about these certifications, feel free to comment below.

 

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EduPristine: Trusted by Fortune 500 Companies and 10,000 Students from 40+ countries across the globe, it is one of the leading International Training providers for Finance Certifications like FRM®, CFA®, PRM®, Business Analytics, HR Analytics, Financial Modeling, and Operational Risk Modeling. EduPristine has conducted more than 500,000 man-hours of quality training in finance.

View Comments

  • Hi! Am a PhD in Statistics and am currently working with an MNC software firm Selling Finance related Solutions (specifically around Treasury Management, Risk and fraud management, and enterprise performance management) Am looking to move into either a bank or a consulting firm on the analytics/ treasury side. Please suggest which certification to go for.

  • I did my engineering in computer science domain and presently working in investment
    banking technology (equity) in one of the leading Investment Bank. I want to pursue
    my carrier in risk management / equity
    research etc.. Even I have interest in sales and marketing (banking). Which course
    is best for me ? CFA or FRM?

  • I did my engineering in computer science domain and presently working in investment
    banking technology (equity) in one of the leading Investment Bank. I want to pursue
    my carrier in risk management / equity
    research etc.. Even I have interest in sales and marketing (banking). Which course
    is best for me ? CFA or FRM?

  • Hi, I have completed my Masters in Economics and I am really interested in the field of finance and statistics. I don't wish to go into academics. Corporate Research seems to be my thing. Which course should I choose to enhance my knowledge about finance as well as help increase the probability of getting placed.

    • Hi Natasha, lets take this offline. I am sending you an email. It would be easier to discuss your career prospects in a much more detailed fashion via email or best on a telephone!

  • Hi, I have completed my Masters in Economics and I am really interested in the field of finance and statistics. I don't wish to go into academics. Corporate Research seems to be my thing. Which course should I choose to enhance my knowledge about finance as well as help increase the probability of getting placed.

    • Hi Natasha, lets take this offline. I am sending you an email. It would be easier to discuss your career prospects in a much more detailed fashion via email or best on a telephone!

  • I am pursuing MBA in finance,i am interested in private equity analyst . So what should i prefer to do CFA or FRM. ??

  • im working as vice president corporate banking in one of the worlds largest bank. I am handling high value credit proposals. Pls suggest me whether should I pursue frm or cfa. which will benefit me more.

  • Hello,
    I am Rehan from Bangladesh. I will be completing my BBA in Finance from a top university next year. I want to move my steps my further into the world of Finance. I want to achieve both the two prof. degrees. CFA & FRM. what do u think of it? how I would be benefited? And also when I should start FRM during the CFA program?
    Thanks for your support. .

  • Hi, I am working as credit officer with (Mortgage Industry). Prior was in ICICI Bank with same profile in loans. Now i am confused that what i have to go for CFA or FRM

  • i am working in ib operations...please advise if cfa or frm will help me to grow and whether ib operations work experience will count to get a cfa membership after clearing the 3 levels