Ready for this? According to a survey run by McAfee, up to $600 billion is stolen by cybercriminals every year. That means that companies that slack on their cybersecurity are placing themselves at a much larger risk than they may have thought.

That’s where financial risk management certifications come in. In case you didn’t know, making the right choice between FRM and CFA is super important. If you want to learn more, you can’t go wrong by reading our guide about FRM vs CFA!

An Inside Look at CFA vs FRM

Want to take an inside look at chartered financial analyst and financial risk management certifications? Look no further because you’ve come to the right place. For those who are unaware, a chartered financial analyst certification is one of the most popular financial credentials on the globe.

In case you’re new to the game, the awarding, evaluation, examination format, and curriculum is managed by the CFA Institute. Also, those who can finish their chartered financial analyst program are given the CFA charter that they’ve been seeking, making them an official “CFA charter holder.”

And get this: the CFA charter is basically the top of the line qualification for the investment industry. But what’s the real deal about financial risk management certification? In a nutshell, a financial risk manager is someone who has met all of the requirements set by the Global Association of Risk Professionals.

Of course, an FRM certification is also highly renowned by anyone in the world of risk management. That being said, financial risk managers are experts in predicting the rapid twists and turns that happen in the finance sector. Naturally, financial risk managers do everything from mitigating risk to managing investments and money.

Not only that, but financial risk managers also have to stay in tune with the standards in their industry to predict what will happen next.

CFA and FRM Requirements

Curious about the requirements for financial risk management and chartered financial analyst exams? We’ve got you covered. To be completely honest with you, there are a ton more hoops that you have to jump through to become a chartered financial accountant than there are to become a financial risk manager.

For starters, you have to have a bachelor’s degree under your belt before you even think about applying for a chartered financial accountant certification. Yes, you read that right. But here’s the exception: if you’re currently a student in the last year of your studies, then you’ll usually be able to become a CFA applicant.

If that’s not the case, then having at least four years of experience in the field is a must-have for anyone who wants a chartered financial accountant certification too. In addition, having a combined college and work experience of four years will typically do the trick as well.

Of course, any time that you spent working at a summer or part-time internship won’t help you in this department either. On top of that, becoming a CFA means that you’ll have to become a CFA Institute member, which includes following the codes outlined in the “CFA Institute Code of Ethics and Standards of Professional Conduct.”

On the other hand, becoming a certified financial risk manager is way easier than doing all of that. Surprising enough, there are literally zero professional or educational requirements to show up for the financial risk management exam.

As a matter of fact, the questions on the FRM exam were made to deal with real-life issues that connect practice with theory. Expect to take a two-part exam that shows that you have several years of expertise in risk consulting and portfolio management. But that should be a breeze for you!

FRM and CFA Exam Details

Don’t know how to prepare for your CFA or FRM exam? We’ve got a sneak peek at all of the exam details. First things first, CFA exams are all about mastering the ins and outs of the financial industry.

Meanwhile, FRM exams focus on the risk management segment of the financial sector. Plus, chartered financial accountant programs cover things like valuation, ethics, and portfolio management. And as we mentioned above, the FRM exam will only be looking at risk-related functions.

Besides these topics, don’t be surprised to see any test questions about topics such as:

  • Hedge funds
  • Fixed income
  • Statistics

Let us explain. For those who are set on taking the CFA exam, there are actually three different levels of exams that you have to get through, which include levels one, two, and three. Overall, each exam will take six hours to pass, held in hundreds of countries across the globe.

Naturally, you’re required to pass all three tests to earn the CFA charter that you’re seeking. As if that’s not enough, you’ll have to do it all within two and a half years too. What’s the FRM going to be like?

We’re glad that you asked. Taken as an offline test, the financial risk management exam is a two-part quiz with questions that are presented in a multiple-choice format. Held twice each year, this special test is only given in the English language.

The best part about the FRM test is that it will only take about four hours to complete. Once you get there, get ready to answer up to 100 multiple choice questions during the first part of your exam. The second part will contain around 80 more multiple-choice questions to answer.

But what about the fee structures and job opportunities for each exam?

Fee Structures and Job Opportunities

Let’s talk about the fee structures for each exam, shall we? Picking up where we left off, people who are taking the CFA text for the first time ever have to enroll for it online beforehand. Crazily enough, you’ll be prompted to pay a pretty pricey one-time enrollment bill of about $440.

And that’s not even including the steep registration fee you have to cover just to take the exam. The bright side is that you won’t be required to pay the same high enrollment fee for the other parts of the exam. In case you’re not sure how much the regular exam fee costs, they typically range anywhere between $800 and $1,170 as the deadline gets nearer.

As for the FRM exam, the enrollment fee for newer candidates will only about $300. Plus, registering early can get you a great deal on your registration fee, meaning you’ll normally have to shell out $350. Otherwise, those who choose to register late will face increased prices of between $475 and $650.

So, what kind of job opportunities are out there for chartered financial analysts and financial risk managers? People who choose to take the CFA route typically go into the following fields:

  • Relationship managing
  • Investment managing
  • Investment banking
  • Hedge fund researching
  • Auditing

However, students who want to take the FRM route have a lot more diverse careers options, which can include:

  • Investment risk manager
  • Director
  • Head of operational risk
  • Senior risk analyst
  • Chief risk officer

Want to know the most incredible part? On top of everything we mentioned above, people with FRM certifications can look forward to a lucrative career in the banking, asset management, and corporate sectors.

Besides this, consulting firms, hedge funds, and insurance firms will usually welcome your FRM certification with open arms. Can’t beat that!

CFA and FRM Salaries: Who Makes More?

You might be wondering: between a CFA salary and an FRM salary, who’s taking home more cash on an annual basis? The answer might be more shocking than you’d think. Before we answer your question, it’s important to note that the salaries for each profession depend on where you live, how much work experience you have, and what your specific job title is.

And now, for the moment that we’ve all been waiting for. For those who are super curious, the average chartered financial accountant can take home a salary of between $45,000 and $180,000 each year. The most surprising part is that the salary for financial risk managers is pretty similar to the salary for chartered financial accountants.

So, if you guessed that financial risk managers make somewhere around $50,000 and $165,000 per year, you’d be completely right. With so much in common, sometimes students choose to pursue both the CFA and the FRM certification.

The truth is, getting your hands on an FRM and a CFA credential is a really smart move for those who want to focus on financial accounting and risk management. But here’s the catch: it is going to take a ton of additional time and effort to complete both courseloads for these special certifications.

We highly recommend that you spend some serious time thinking about the career path that you’d like to take in the future. Once you pick a particular path, you can consider adding another credential to your resume as time goes on.

Which One is Better: CFA or FRM Certifications?

We can all admit that it might be hard to decide which credential is better, especially since FRMs and CFAs are both well respected in the financial sector. To keep it simple, one is not going to be better than its counterpart.

That’s because a CFA certification and an FRM certification are just too different to be put in the same category. For example, people who get CFA certifications study investments while FRM students look at managing and assessing an organization’s risk levels. If you’re feeling stuck, just choose the one that matches your interests more.

For instance, if you’re looking to become an investment banker, portfolio manager, or a financial researcher, then getting a CFA credential is the way to go. If you are more interested in the FRM path, then getting a career with the Department of Risk Assessments, the Treasury or the banks should be a no-brainer.

Whatever you choose, the passing rate will be about the same, particularly since you’ll have a 30 to 50 percent chance to pass both the CFA and the FRM exams. Although FRM exams have a bit of competition from the Professional Risk Manager exams, FRM is definitely the most popular pick for aspiring financial risk managers.

On the hunt for more exam tips? If you happen to be a whiz at accounting, then you shouldn’t have any difficulty passing the CFA exam. But if your background is more focused on math, then taking the FRM exam is probably the best way to go.

Interested in taking the FRM exam? We can’t emphasize this enough: make sure that you’re getting your FRM certification from the Global Association of Risk Professionals!

CFA and FRM: What’s the Difference?

If you don’t know what the difference between CFA and FRM is, you’re not the only one. But thanks to our handy guide, you’ll never have to struggle with these definitions again.

That’s because you’ll know everything you need to know about FRM and CFA exam details, fee structures, and job opportunities. Not to mention that knowing which job title brings in bigger paychecks is a pretty important thing to consider as well. Having a hard time choosing which one is right for you?

That’s where we come in. By highlighting the pros and cons of each, figuring out if you want to work toward your chartered financial accountant or financial risk manager should be easier than ever.

If all else fails, you can’t go wrong with taking the FRM exam. You got this!

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