CFA vs FRM Designation : Salary, Syllabus & Exam Difficulty

The majority of college graduates who wish to work in finance wonder if they should consider taking FRM or CFA courses together, or just one of them. This is a question that most current and prospective financial professionals have come across.

A substantial time and cost commitment is required for both CFA and FRM. Despite being the jewels in the financial crown, these two handle radically diverse facets of the sector.

It is a debate that has been going on for a while and is one of the most popular issues during your college years. You should research the contents of each course and determine which one would be the most appropriate for your career before making your decision.

Let’s attempt to thoroughly comprehend each subject before determining which one best fits you.

Firstly I’ll be giving a glimpse into both the courses from a broad perspective.

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What is CFA

The most comprehensive international finance course is the Chartered Financial Analyst program, which covers every aspect of finance in great detail. The topics of portfolio management and investment banking are fundamental to CFA.

As a CFA, your duties would include creating and implementing the portfolio’s tools as well as analyzing the financial success of your clients. CFA candidates must have three to four years of experience in addition to passing Levels I, II, and III of the course.

What is FRM

The study of risk analysis and management is known as Financial Risk Management, or FRM. As a FRM you would be responsible for identifying and mitigating risks faced by the companies. Additionally, you would be creating and certifying risk models.

You will be studying for this test on a number of subjects, including market risk, credit risk, liquidity risk, valuations, and risk models. In addition to passing two demanding exams, a candidate must have two years of work experience in the financial risk management industry or a related field in order to become a FRM holder.

FRM Course Fees:

• There is a one-time enrollment fee of USD 400.
• Exam fee for Part 1 and Part 2 will cost you around USD 600 as an early bird.
• The standard fee for Part 1 as well as Par 2 is USD 800
• In total, it costs around USD 1000 to USD 1200 to register for the FRM exam.

CFA Course Fees:

• One time enrollment fee is USD 350 and is not applicable for subsequent exams.
• Early registration for each level is around USD 900 and standard fee is USD 1200.
• Rescheduling fee is applicable for USD 250.

CFA vs FRM Salary – Average & Charter Holder Salary

As you can see, the salaries for the two courses are nearly identical. Furthermore take note that these numbers are predicated on the candidate being a newcomer to the field.

The typical compensation for a CFA in India ranges from Rs 6 lacs to Rs 9 lacs for a fresh graduate with no prior relevant experience. As you gain experience, this number doubles.

As a fresh graduate, the average income for a FRM is between Rs. 5 lacs and Rs. 8 lakhs. This could change and get more depending on the expertise level and risk profile.

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Exam Structure of FRM:

Part I :-

• Computer Based Testing (CBT) of four hours
• 100 questions of multiple-choice questions
• No negative marking

Part 2 :-

• Computer Based Testing (CBT) of four hours
• 80 questions of multiple-choice questions
• No negative marking

Exam Structure of CFA:

Level 1:-

• Divided into two sessions of 180 multiple-choice questions
• A session lasts for 2 hours and 15 minutes.
• Financial statement analysis, mathematical methodologies, ethics and professional standards, and economics are all covered in the first session.

• Corporate issuers, stock, fixed income, derivatives, and portfolio management are among the subjects covered in the second session.

Level 2:-

• 11 essay questions and 11 item sets for 12 points each

• Each session is of 2 hours and 12 minutes, a total duration of 4 hours and 24 minutes with optional break in between.

• There are some new changes which are effective from February 2023.
• Unlike earlier, constructed response type questions or essay questions will be mixed into both sessions.

• There are 3 ways to answer constructed response questions: essay, numerical entry and multiple-choice.

Explore more about FRM

FRM – According to GARP, passing rates for FRM November 2022 Part 1 and Part 2 are 50% and 59% respectively.
CFA – The CFA institute has provided with the average 10 year passing rate for

• Level 1: 41%
• Level 2: 45%
• Level 3: 52%

FRM: Candidates must submit two years of relevant work experience in financial risks within five years after passing the two FRM exams.
CFA – Candidates must have at least 36 months’ worth of work experience, totaling 4000 hours, assessing financial data and reports as part of the process of making investment decisions.

Also Read :  : What is the CFA Exam? Exam Dates 2024-25

CFA Subjects – In total CFA has 10 subjects for Level 1 & 2and 7 subjects for Level 3
FRM Subjects – FRM has a total of 4 subjects for Part 1 & 5 subjects for Part 2

Candidates who have taken both the CFA and FRM exams typically report that the FRM is somewhat harder than the CFA since it has fewer theoretical questions and more application-based questions.

Despite the fact that the CFA course structure is longer and requires more preparation time. Candidates frequently claim that FRM is more challenging because it requires advanced mathematics, which is not necessary for CFA.

Therefore, FRM is a better option for you if you excel in mathematics and are motivated to pursue a career in that field.

CFA Job Roles

Investment banker, financial analyst, financial adviser, and relationship manager are the primary employment profiles that you can enter.

It’s the most prestigious and well-known course in finance anywhere in the world. The CFA program is ideal for students who wish to pursue careers in:

• Equity Research
• Investment Banking
• Mergers & Acquisitions
• Private Equity
• Corporate Finance
• Portfolio Management
• Financial Advisory

Jobs involving portfolio management and equities research entail conducting research to determine which investments best fit the objectives of your clients and managing their funds to maximize returns. Helping corporate companies with fund raising, advice, mergers and acquisitions, etc. is what investment banking is all about.

FRM Job Roles

Conversely, Financial Risk Manager is a highly specialized education that focuses only on risk management. Following FRM, potential careers include risk management, financial risk consulting, and risk analysis. FRM is a highly regarded course that is also acknowledged on a global scale. GARP, which was established in 1996 and has its headquarters in New Jersey, USA, is in charge of FRM. FRM works well with the following profiles:

• Credit Risk
• Market Risk
• Operational Risk
• Banking and Treasury
• Quant Trading

For those of you who are total beginners in the financial markets, all of these jobs may appear a little intimidating and perplexing. In summary, these risk management positions involve identifying and evaluating different kinds of risks and implementing preventative steps to keep risks within acceptable bounds.

Salaries After FRM Certification in India

Career Verdict

To sum up, if a person is more interested in risk management and quantitative analysis, they should consider a job in financial risk management. On the other hand, if one is more drawn to the stock markets, they should consider becoming a CFA. Although CFA does not go as deep into risk management as FRM does, it does cover part of it.

• Deutsche bank
• Citi Group
• Goldman Sachs
• P. Morgan Chase
• Morgan Stanley
• HDFC Bank
• ICICI Bank
• SBI Bank
• Black Rock
• Mirae Asset Management
• Morning Star

Your finance career may be shaped by your decision between the CFA and FRM certificates. To make an informed decision:

Evaluate Your Objectives: Determine which career path best suits your interests and aspirations: risk-focused roles (FRM) or investment management (CFA).

Check Your Skills: Choose the credential whose skill set best fits your goals: FRM for risk expertise or CFA for wider financial skills.

Commitment: Compare the work required for each certification to your present workload and level of study dedication.

Demand in the Market: Find out where the FRM or CFA qualifications are in demand and where they fit in with your desired career path.

Networking: Make contact with experts who possess these credentials to learn about their career trajectories and industry perspectives.

Changing Roles: Keep abreast of how risk management and finance are changing in order to align certification decisions with emerging trends.

Ask for Advice: Seek guidance from mentors or career consultants to obtain insightful insights specific to your circumstances.

Examine the curriculum: Examine each certification’s subject matter to make sure it fits with your interests and professional objectives.

Aspects of Finance: Determine the price of the tests, the required readings, and the continuing assistance for both certifications.Selecting between

CFA and FRM requires careful consideration of a number of aspects. To ensure that your choice is in line with your career goals, get advice.

Obtaining certifications in both risk management and investing (FRM) and CFA provides special benefits.

Benefits of Both Titles

Versatility: Possessing both certifications enables you to be adaptable and competent in handling investment choices and risk management.

Wider Knowledge: The combination deepens your awareness of risk assessment, portfolio management, and financial markets.

Enhanced Career Opportunities: Dual-certified individuals can shift smoothly across responsibilities in investment management, risk analysis, and financial consulting.

Professionals Who Benefit 

Portfolio Managers: Gain a holistic picture of asset optimization and risk management.

Risk analysts: Combine your knowledge of investments with your experience to strengthen it.

Consultants: Provide clients with more thorough advice services.

Investment bankers: Skillfully navigate financial markets and evaluate risks.

Combined Expertise in Investment and Risk Management

Combining the CFA and FRM certificates allows for educated decision-making that complies with rules by bridging the gap between investing and risk management. The pair unlocks potential in the ever-changing banking sector by offering versatility, deeper expertise, and wider job chances to those aiming for a diverse finance career.

CFA Salary Trends

Location, experience, and the employer can all affect an individual’s actual CFA and FRM salary. Investigate local FRM salary statistics for a more precise estimate. These numbers, which give a more accurate picture of earnings in your area, are derived from anonymous contributions made by Financial Risk Managers.

Explore more about CFA 

Top Employers for CFA in India

Regarding CFA:

To assess financial data and make wise investing decisions, one needs strong analytical abilities.

Sustaining credibility in the financial sector requires the finance industry to uphold strong ethical standards.

It need a strong grasp of quantitative analysis to comprehend intricate financial models and risk evaluations.

It is essential to have a thorough understanding of investment techniques, asset classifications, and financial markets.

Investment professionals need to be well-versed in the creation, optimization, and administration of portfolios.

Regarding FRM:

Proficiency in quantitative analysis and modeling is required for the analysis and modeling of various risk variables in FRM.

Competency in evaluating risks related to markets, credit, and operations is crucial for efficient risk management.

It is necessary to have knowledge of risk modeling methods such as value at risk (VaR) and stress testing.

It is essential to comprehend complicated financial products and the hazards involved.

Industry Recognition and Application

Globally, qualifications in both CFA and FRM are highly respected. While FRMs focus on risk management and work in a variety of industries like banking, insurance, and financial consulting, CFAs are excellent in investment management and financial analysis professions. In their particular fields of specialization, both credentials provide a wealth of job prospects.

In conclusion, both CFA and FRM offer unique career opportunities in finance, with each designation bringing its own set of advantages. The CFA provides an in-depth focus on investment management, while the FRM emphasizes risk management. When deciding which path to pursue, consider your long-term career goals, the subject areas you find more compelling, and the types of roles you aspire to.

The exam difficulty for both designations requires a significant time investment, yet the payoff in terms of career prospects and salary potential is well worth the effort. Those who successfully complete either the CFA or FRM designation often see an upward trajectory in both compensation and job roles.

If you’re serious about excelling in these challenging exams, it’s important to seek expert guidance. Fintelligents, known for its top-tier coaching in Mumbai, offers comprehensive support for both CFA and FRM candidates. With their structured learning paths and experienced faculty, Fintelligents can help you navigate the complexities of the syllabus and stay on track for success.