For finance professionals seeking to advance their careers, this is one of the hardest questions to answer—should you pursue a CFA® charter or FRM® designation? Which is better for your career?
No matter which one you choose, actually earning the credential will require huge commitments in time, effort and even money (especially if you have to retake the exams).
In a nutshell, the difference between the CFA and FRM designations comes down to focus and interest. If you’re passionate about and interested in the assessment and management of financial risk, then the FRM designation is tailor-made for you. On the other hand, the CFA charter provides a thorough education on a broad range of financial analysis and investment topics and can lead to a wider range of career prospects, not to mention a higher salary.
Here’s a quick overview of how the two credentials compare:
| FRM® | versus | CFA® | |
| Administered By | GARP | CFA Institute | |
| Year Established | 1997 | 1947 | |
| Global Members | 32,000 | 135,000 | |
| Exam Components | 2 Parts | 3 Levels | |
| Minimum Cost* | $1,300 | $2,400 | |
| Program Materials | Included | Included | |
| Study Hours | 150-200 Hours Per Part | 300+ Hours Per Level | |
| Exam Pass Rates | Part I: 42% Part II: 62% |
Level I: 42% Level II: 46% Level III: 53% |
|
| Median Salary | $86,000 | $132,000 (w/5 years’ experience) | |
| Focus | Highly Specialized Financial Risk Assessment |
Generalist Investment Analysis |
|
| Possible Job Roles | Risk Manager Credit Risk Analyst Chief Risk Officer |
Portfolio Manager Financial Analyst Financial Strategist |
|
| Top Employer Globally | ICBC | JP Morgan Chase |
*With on-time registration and passing entire exam on first attempt.
Why Not Both?
Yes, why not both the FRM and the CFA? While it will take quite a bit of time to earn both credentials, it’s clear that they both provide unique value for finance professionals. Together, they can help you to truly stand out versus your peers, especially as the finance space becomes more complicated due to regulations and innovation.
Considering adding the FRM designation to your CFA charter?