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.
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
- Research Analysts
- Chief Executives
- 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)
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
- 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.
FRM Part 2
CFA Level II
CFA Level III
|Fee (indicative and overall)||
FRM Part 2 – $350 to $650
CFA® Level II – $1070 to $1650
CFA® Level III – $1060 to $1610
|Pass rate (Approximate)|
|Relevant For Candidates looking for jobs in|
Market Risk, value at Risk, Credit Risk, Operation Risk & Basel
Economics, Corporate Finance, Equity, Fixed Income
|Kind of Qustions Asked|
|FRM vs CFA® Salary (Average)||
India – INR 5,00,000
India – INR 6,00,000
|EduPristine Official Course Provider|
Seeing the overwhelming response on this topic, we have created a video. Check it out!
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.