Which is a Better Career Option, CFA or FRM?

Hey there! Welcome to another blog where we discuss which course is better, the CFA course or the FRM course? We will be covering the scope of both these courses. We will also discuss the eligibility criteria that are to be met, the duration, and the syllabus covered under both the certifications, which will help you decide which one is better as a career option. Is it going to be the CFA course, the FRM course, or both? Let us quickly find out.

Don’t worry, as it is not just you who is confused. Many are still on the fence and are unable to decide. If you are comparatively new to these designations, then this blog is must-read for you.

Firstly, both these courses are highly respected and prestigious, add a lot of value to one’s resume, and help in standing out from the rest of the crowd. The primary difference between both these courses is the topics that they cover. It becomes very important to decide wisely because preparing for both these courses requires hard work, money, and lots of time.

Talking about the CFA program (Chartered Financial Analyst), it is a very valuable credential offered by the CFA Institute, which prepares the candidates with real-life skills and expertise in the field of Investment Banking, Portfolio Management, and Financial Research. Whereas the FRM course is more suitable for those candidates who wish to kickstart their career in the field of Risk Management in various banks, treasury departments and learn more in detail about financial markets, valuation, and risk models.

Here is a summary of the CFA program:

1. The CFA program has a total of 3 levels that can be pursued by candidates who are graduates or are in the final year of graduation and are highly interested in the field of Finance.
2. The duration to complete all three levels would be a minimum of 2 years. A few of the topics covered under the CFA curriculum are Portfolio Management and Wealth Planning, Derivatives, Corporate Finance, Alternative Investments, Financial Reporting, and Analysis.
3. There are more than 170,000 CFA Charterholders who have been successful in achieving this valuable credential. This is the fastest-growing stream and is further expected to grow, given the demand from the emerging markets. 
4. By completing the CFA course, one can be recognized as a leader globally and can also command a better remuneration. 
5. The CFA charter can make a very big impact for those who are just about to begin their career, as it helps in being committed towards a career in Finance and opens a diverse range of career options to choose from. 

Let us now see how the FRM course is different from the CFA. We will also answer some of the most frequently asked questions which are, how to apply for the FRM course, what are the FRM course eligibility criteria, what is the FRM course duration, and topics covered under the FRM course content.

The best part about pursuing the FRM is course is that there are no specific eligibility criteria for pursuing this course. The total time taken by the candidates to complete both parts is a minimum of a year. The topics covered under the FRM course are:

1. Foundation of risk management 
2. Quantitative analysis 
3. Financial markets and products 
4. Valuation and risk models 
5. Market risk management and measurement 
6. Credit risk measurement and management 
7. Operational risk and resiliency 
8. Liquidity and treasury risk measurement and management 
9. Risk management and investment management 
10. Current issues in financial markets

The procedure to apply for the FRM course is as follows:

1. One can book the examinations for part 1 or both parts by visiting the official website of GARP. The decision for appearing for the exams depends on the students and how confident they are with the FRM concepts. A note to be kept in mind while appearing for both part 1 and part 2 is that part 2 will be graded after part 1 is cleared.
2. The second step is to appear for part 1 exams after registering for the part 1 examination. Once cleared, the next step would be to register for part 2 and clear the exam.

To start the journey with FRM, one must also obtain at least two years of full-time work experience in the finance domain as only the finance relevant work experience will be considered. The last step would be to demonstrate this work experience in short and submit it to GARP. It must be kept in mind that this needs to be submitted within five years from the date of passing the part 2 exam. Only after confirmation from the GARP and being added to their registry, you can be called a Certified Financial Risk Manager.

To conclude, FRM is a course that touches all the quantitative aspects and teaches candidates about financial markets, products, pricing, and how to build various financial models. It is more inclined towards students having a keen interest in subjects like Maths and Finance. CFA, on other hand, is more qualitative, where candidates get detailed knowledge of the process and various components related to Financial Modeling.

If you wish to get a thorough understanding of all the dimensions of Finance, then it’s best to take both courses as these courses do complement each other perfectly. Both these courses provide a rock-solid foundation for building a successful career in the field of Finance.

Are you now ready to kickstart your career and be the next CFA or the next FRM?