The Financial Risk Manager (FRM) designation regarded by some as the most globally respected and widely recognized certification for financial risk management is an international professional certification offered by the American-based Global Association of Risk Professionals (GARP). To be awarded the FRM designation, a candidate must pass two highly technical and rigorous practice-oriented multiple choice exams of 4 hours each (FRM Exam Part I and Part II) and demonstrate two years of relevant work experience.

Part I of the exam focuses on the tools used to assess financial risk: Quantitative Analysis, Foundations of Risk Management, Financial Markets and Products, and Valuation and Risk Models.

Part II of the exam emphasizes the application of the tools acquired in Part I: Market Risk Measurement and Management, Credit Risk Measurement and Management, Operational and Integrated Risk Management, Risk Management and Investment Management as well as Current Issues in Financial Markets.

Why Take the FRM?

Stand Out From the Crowd

Becoming an FRM clearly distinguishes you as someone serious about managing risk. This competitive advantage holds across a wide range of financial services professionals, including: risk manager, analyst, trader, portfolio manager, auditor, developer, or salesperson. Whether you are actively employed, or looking to break into the industry, achieving the FRM® certification is a valuable career enhancer/accelerator.

Join an Elite Network

In demonstrating your expertise and commitment to better risk practices, you also join a world-wide community dedicated to improved financial stability. According to GARP, there is growth in global institutional recognition of the FRM as the numbers show: FRMs work in 141 countries and territories; FRMs have achieved positions such as Chief Risk Officer, Senior Risk Analyst, Head of Operational Risk, and Director of Investment Risk Management; FRMs are employed at nearly every financial services institution, government regulator, and consulting firm around the world; 90% of those who sat for the May 2014 FRM Exam would recommend that their colleagues also sit for the FRM Exam; More than 30,000 FRMs are practicing worldwide; Registrants for the 2014 FRM exam came from more than 6,000 organizations globally; There have been more than 150,000 registrants for the FRM exam since 1997; 923 organizations had five or more registrations for the FRM Exam in 2014; 38 organizations had 100 or more FRM registrations in 2013; In 2014, 11 organizations had 250 or more FRM registrations; In 2014, graduate students from over 350 educational institutions enrolled in the FRM.

Gain a Competitive Advantage

As the financial industry becomes increasingly competitive and concerned about managing risk, it is important to distinguish yourself and your ability to add value to an organization. Earning the FRM signals to employers that you are serious about risk management and that you have had your knowledge validated against international professional standards. By joining the FRM community, you will become part of an elite group of skilled professionals sought after and employed by the leading financial institutions in the world.

Stand Out to Top Employers

FRM® certification sets you apart in the global marketplace and helps you move ahead. Employers hire FRMs for their knowledge and ability to anticipate, respond, and adapt to critical issues.

According to GARP, the top 10 global banks employing the most FRMs include ICBC, China Construction Bank, Agricultural Bank of China, Bank of China, JP Morgan Chase, Wells Fargo, HSBC, Citigroup, Bank of America, and Banco Satander and the top 10 Companies employing the most FRMs include ICBC, Bank of China, HSBC, Agricultural Bank of China, Citigroup, KPMG, Deutsche Bank, Credit Suisse, UBS, PwC).

Salaries of Certified FRMs

According to compensation research firm, PayScale, average salaries in US for certified FRMs with the following titles are shown below.

Job Title Average Salaries
VP, Risk Management $125,668
Credit Risk Manager $123,000
Quantitative Analyst $119,831
Senior Internal Auditor $88,437
Risk Analyst $82,424

FRM Pass Rates

Since 2010, when the FRM exam was split into two parts, the average pass rate for the Part I is about 47% and 57% for the Part II implying about a quarter scale through in one attempt. Generally, since 2010, pass rates for both levels have trended downwards from about 52.5% in 2010 to 44.5% in 2016 for the Part I and from 54% in 2010 to about 50% in 2016 for the Part II.

More information about the FRM Program can be found at www.garp.org

CFA Vs. FRM

This is a common question. Which is right for you will depend on your role and career focus. While both are not competitors, they are actually complementary.

CFA FRM
Coverage/Focus Broad Finance and Investment Management Skills Risk Management Skills and more Quant Finance oriented
Typical Profiles Portfolio Manager, Research Analyst, Chief Investment Officer, CEO, Corporate Finance Analyst, Consultant, etc. Risk Analysts, Quantitative Risk Analyst, Head (Market Risk, Credit Risk, Operational Risk), Chief Risk Officer etc.
Key Course Equity, Derivatives, Fixed Income, Corporate Finance, Portfolio Management, Quantitative Analysis, Ethics, Alternative Investments, Economics, and Financial Reporting and Analyses. Quantitative Analysis, Foundations of Risk Management, Financial Markets and Products,  Valuation and Risk Models, Market Risk Measurement and Management, Credit Risk Measurement and Management, Operational and Integrated Risk Management, Risk Management and Investment management.
Levels/Time Required 3 Levels (1.5 to 4 Years) on the Average 2 Parts (6 Months to 2 Years) on the Average
Cost $3,300 to $5,500 Excluding private tuition $1,900 to $2,500 Excluding Private Tuition
Exam Dates L1 (June and December), L2 and L3 (June) May and November
Study Hours 300 Hours/Level 250 Hours/Level
Pass Rates 40% – L1, 43% – L2, 51% – L3, 42% – Combined Average 47% – Part I, 57% – Part II

 

At Finance Analytics Group, you will be mentored by a team of tutors who are certified FRMs and have gone through this journey before and are in a better position to lead you.