CFA® Program vs FRM Certification: Battle of Financial Certifications

CFA® Program vs FRM Certification

For all the candidates looking 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® Program 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® designation

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 is now considered as the highest standard of professional excellence.

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® Program:

• 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:

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

EduPristine is country’s market leader in training Finance and Accounting professionals. They have a strong online platform and network of classrooms across India and they also cater to self-paced learning and online learning, in addition to classroom learning.

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.