FRM course is a specialization course in Risk Management and is offered by an international organization called the Global Association of Risk Professionals (GARP). There is risk involved in every segment and industry. Be it finance companies, pharmaceutical companies, food and beverage companies, automobile companies, etc, every industry has a different set of risks to face and overcome. With the advancement in the ways and methods of operating businesses, organizations have realized the importance of strategizing and risk planning. Certain risks can be controlled by the organization, while some are beyond a company’s control. It has become important for them to identify risks and take appropriate actions or measures to eliminate the impact of risks or at least reduce the impact of these risks. There are numerous types of risks that have been classified under heads like financial risk, operational risk, country risk, political risk, etc. The FRM course covers risks related to the Finance segment.
Below are some of the major and broader risks categories that are classified as financial risks:
- Market Risk:
- The most common types of risks under this segment are interest risk, currency risk, commodity risk, equity risk.
- Market Risk is also known as systematic risk.
- Systematic risks are risks that cannot be completely eliminated, but the impact can be diluted by adopting relevant measures.
- On the other hand, unsystematic risks are contrary to the market risks and are specific to the company or the industry.
- That means where systematic risks affect all the companies, industries, or segments of a country, unsystematic risks only affect the particular company or industry.
- Credit Risk:
- Credit risk arises due to the credit extended to vendors, clients, or customers. There is a risk if the person to whom the credit is provided fails to make payment or defaults.
- Liquidity Risk:
- Liquidity risk involves risk related to the asset and operational funding.
- Asset liquidity risk is when the asset takes longer to get converted to cash.
- It is difficult to sell such assets. Operational funding liquidity risk arises when the company does not have enough funds at hand to carry out the daily operations in a company.
- This happens due to poor cash flow in the organization.
- Operational Risk:
- Operational risks are the risks that arise due to the regular or daily activities of the company or organization.
- These risks could be related to fraud in a company, or inefficiency in a department or process, or challenges in a business strategy or business model.
What are the benefits of pursuing FRM course (GARP)?
- Pursuing FRM course is beneficial if you want to pursue your career completely in risk management.
- GARP is an international association that is specifically built for risk professionals. The role of GARP is to monitor the practices of risk professionals over the globe and also set benchmarks for practicing risk management.
- FRM certification awarded by GARP is recognized globally as a candidate need to pass all the test by the organization to be qualified as a Financial Risk Manager.
- Being globally recognized means you can apply for jobs across the globe without having to pursue an additional course to be eligible for the post applied.
- FRM course by GARP also encourages candidates to gain professional experience while pursuing the course.
- This experience helps candidates secure good job and salary packages once they step into the corporate world.
What are job profiles for CFA plus FRM?
- There are certain job profiles that are accessible to a candidate who has pursued the CFA course and is a qualified Chartered Financial Analyst (CFA).
- While the roles offered to a candidate who has pursued the FRM course and is a qualified Financial Risk Manager are slightly different from the ones offered to the CFA.
- CFA is a role that involves management and analysis of the financial status of the company, or individual, or a business.
- FRM is a role that involves assessing, evaluating, analyzing the different types of risks related to the industry or company, or department.
- Below are the Job roles a candidate who is a qualified CFA after the CFA course can opt for:
- Equity Analyst
- Financial Analyst
- Financial Planner
- Chief Financial Officer
- Portfolio Manager
- Research Analyst
- Risk Analyst
- Below are the Job roles a candidate who is a qualified FRM after the FRM course can opt for:
- Chief Risk Officer
- Market Risk Analyst
- Market Risk Manager
- Credit Risk Analyst
- Credit Risk Manager
- Head of Operational Risk
- Investment Risk Manager
- Investment Risk Analyst
- Regulatory Risk Analyst
- Regulatory Risk Manager
- Operational Risk Manager
- Operational Risk Analyst
A candidate who has pursued CFA course, as well as FRM course, can pursue all of these career options. Moreover, they will have added advantage over the other candidates while looking for job opportunities.
EduPristine provides FRM course professional training, thus guiding the student from start to the end. Students can opt for either FRM course classroom trainingor FRM course live online training. This enables candidates who are working professionals and can’t find time easily for studies to manage studies along with their work. To know about the FRM course fees, FRM course duration, FRM course scope, walk-in at our centers for a free counselling session.