CFA Or FRM, Which Financial Certification Is Better?

All of the finance aspirants, looking to get certified on the international front, there seems to be one debate which is the most common occurrence. This deals with the two pristine financial certifications, the CFA or Chartered Financial Analyst and the FRM or Financial Risk Manager. Both of these certifications are internationally recognised and offer the chance to have a sterling career in the world of finance. This is exactly where a lot of candidates are faced with the big dilemma of, which certification should they go for and which one would be the most profitable for them.

While it is true that both of these certifications, open up a world of enriching possibilities for the candidate; it is also true that both of these are highly competitive, expensive and tough to crack. Thus it becomes very important for an aspirant to choose the most suitable certification, lest it all go to a waste or they reconsider their career choice, down the road after a few years. To someone who is thoroughly aware of both of these certification, would notice a world of difference between them. But someone who is an amateur could end up making the wrong choice. Hence a clear distinction between the two is necessary so as to make it easier to choose.

Here we explore both the certifications in great detail and highlight their differences.

CFA Program: Careers, Qualifications and Eligibility Criteria

The inception of the Chartered Analyst Program took place in 1963. Originally intended for equity analysts working in the field of Investment Banking; today it is compared to the MBA program. It has become one of the go-to certifications, which a professional opts for when looking to target some specific positions in the fields of investment andbanking. The various roles offered under this program range from, Portfolio Managers, Fund Managers, Risk Managers, Financial Advisors, Private Bankers, Consultant, Research Analysts, Accountants, Relationship Managers, Hedge Fund Research and many others. When it comes to the eligibility criteria, a candidate needs to have a bachelor’s degree and around four years of professional work experience.

FRMCertification: Careers, Qualifications and Eligibility Criteria

This certification was originally intended for those candidates, who wanted to pursue the profession of risk managers in financial institutions. Modern times were infused with rapid changes and high competition, which resulted in the need for professionals, who were able to manage risk, money and investment efficiently. Thus as a result of this, the certification came to be recognised as an important designation. The various career prospects and roles here include Chief Risk Officer, Senior Risk Analyst, Head of Operational Risk, and Investment Risk Management. Unlike CFA, here no educational or professional qualifications are required for a candidate to get qualified for the FRM certificate.

Some Major Distinctions

While the CFA program deals with concepts like, financial analysis, ethics, and asset valuation and so on; the FRM certification mainly covers risk, valuation at risk, models of risk, credit risk and so on. Basically topics which revolve around the concept of risk. Some common concepts, where both these certifications overlap include, credit, derivatives, hedge funds, risk/return metrics and so on.

Imarticus Learning is an education institute offering courses for certification in both CFA and FRM. It is recognised by the Global Association for risk management as well as by the CFA institutes and proves to be an instrumental set up for those looking for a career in finance and investment banking.