The Financial Risk Manager (FRM) designation is an international professional certification offered by the Global Association of Risk Professionals (GARP). To be awarded the FRM designation, candidates must complete rigorous two-part, practice-oriented examination that covers the major topics in financial risk management, demonstrate two years' professional work experience in financial risk management, and meet other requirements.
The FRM (Financial Risk Manager) designation is an international professional certification offered by GARP (Global Association of Risk Professionals). In order to get the FRM designation, first the candidates must pass the rigorous FRM examination offered in two parts. The examination covers the major topics in financial risk management. Once they have cleared the examination, they need to have a relevant work experience of 2 years at the least.
The first FRM Designation was awarded in the year 1997 and has observed a rapid growth in candidate enrolment, at greater than 25% compound annual growth rate between 2001 – 2010.
The financial crisis of 2007 – 2010, while reducing the overall jobs in the financial services sector has actually produced a huge demand for risk managers after the crisis has underscored the importance of risk management in the financial products of 21st century.
While the origin of the FRM designation is USA, more than 70% of the FRM designation holders live outside US.
The FRM exams are written sequentially, first FRM Part 1 and then FRM Part 2. In order to write the FRM Part 1 exam, you need to be at least an undergraduate in his final year of study. Only if you pass Part 1 you will be eligible to write the Part 2 exam unless you chose to write both the exams on the same day. In this case, your part 2 exam won’t be graded unless you pass the part 1. If you meet the minimum eligibility to write FRM exam you can then register for the FRM exam.
There are additional requirements for the Certification eligibility.
The FRM Exam is written in two parts, Part – 1 and Part – 2. Both of the exams are considered very tough. They are offered on the third Saturdays of May and November.
The FRM Exams are intended to thoroughly assess a financial risk manager’s ability to measure and manage risk in a real-world environment. The FRM exams are administered on a single day twice a year, on the third Saturdays in May and November. The FRM exams are administered on paper. All questions are multiple choice; each question has 4 answer choices. There are no penalties for wrong answers. The questions in the exams are structured in the context of situations that financial risk managers face every day. The information needed to answer each question is contained within the question or vignette. Only certain models of Texas Instruments (BA II Plus) and Hewlett Packard (10B II, 20B, and HP-12C) calculators may be used. In addition to the official curriculum materials from GARP, study materials for the FRM exams are available from a number of third party providers. GARP recommends 150–200 hours of study for each part of the exam.
The FRM Exams thoroughly assess a risk manager’s ability to manage risk in the real world. The FRM exams are paper based examinations with all the questions containing Multiple Choices. The questions are made out of the context of day to day activities of a risk manager. GARP suggests 150-200 hours of study for each part of the exam.
The results of FRM Exam will be released usually in a month or two from the date of the examination.
The FRM designation is a professional certification offered by the Global Association of Risk Professionals (GARP). It is globally recognised as the gold standard for risk management professionals. Since its inception in 1997, the certification enrolment has seen explosive growth particularly after the global financial crisis of 2008.
The improper handling of potential market and credit risks in the early part of the 21st century led to a huge demand for qualified risk professionals who were able to define a firm's risks clearly and accurately. Professionals holding the FRM designation are often viewed as some of the most qualified in the industry, which led to the enrollment boom.
Being the gold standard in the industry, the FRM designation opens a wide range of highly sought after job opportunities to the designation holders. The perseverance and the commitment to complete the program is seen as a huge differentiating factor from those without the designation. Additionally, the Certified FRMs are expected to follow strict ethical guidelines and code of conduct
All these factors have led to certified FRMs being employed in the most prestigious major banking institutions, asset managers, accounting firms and government agencies in the world. With demand for qualified risk professionals expected to continue to grow in the future, FRMs will be in even greater demand in the industry.
This has led to major banking institutions, asset managers, accounting firms and government agencies in the world looking for FRMs to hire. With the demand for qualified risk professionals expected to continue to grow there is an even greater demand in the industry for the FRMs.
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