FRM vs PRM – Which is the Right Career Path? Any organization has to keep in mind the element of risk at every step and adopt a methodical approach to managing that risk in an effective manner. This not only helps an organization survive but also plays a critical role in achieving sustainable growth in a constantly changing business environment. This is one of the reasons why risk management has remained a field of great interest for organizations as they are increasingly keen to hire professionals with relevant knowledge, experience and capabilities to manage different types of risk efficiently. When risk management certification, there are two key certifications to look at FRM and PRM
To get a detailed purview of both the courses, let’s look at the following sections step by step.
- FRM vs PRM Infographics
- Role of Risk Management Professionals
- What is Financial Risk Manager (FRM)?
- What is Professional Risk Manager (PRM)?
- FRM vs PRM Exam Requirements
- Why pursue FRM?
- Why pursue PRM?
FRM vs PRM Infographics
Reading time : 90 seconds
Lets understand the difference between these two streams with the help of this FRM vs PRM Infographics.
Role of Risk Management Professionals:
Risk management essentially involves identifying possible risk factors and taking suitable mitigating steps to avoid or minimize credit risks, credit risks or other forms or risk an organization might face. No doubt, risk management professionals need to be equipped with necessary knowledge and skills for the purpose and there are a number of certifications which can help validate their risk management skills and help keep them abreast with the latest developments in the field.
Two of the definitive risk management certifications are those of Financial Risk Manager (FRM) and Professional Risk Manager (PRM). Both these certifications are designed to acquaint professional with the fundamentals of risk management but in order to make an informed choice, it would be important to know what exactly do they offer.
What is Financial Risk Manager (FRM)?
FRM is offered by Global Association of Risk Professionals (GARP) for risk management professionals looking to gain expertise in risk management practices in financial services sector. This credential helps acquire an in depth knowledge for undertaking an assessment of different types of market-based as well as non-market financial risks along with general practices in the field of financial risk management. It offers an overview of risk management practices within the financial services sector and is a globally recognized credential.
What is Professional Risk Manager (PRM)?
The Professional Risk Managers’ International Association (PRMIA) offers PRM certification, aimed at enhancing the risk assessment and mitigating capabilities of professionals. It is a highly acknowledged credential for risk management professionals, designed to help professionals develop a detailed understanding of financial risk management. This certification is more focused on study of quantitative aspect of financial risk modeling which plays a critical role in predictive financial analysis which helps gain an understanding of emerging risk areas and helps take suitable mitigating measures.
FRM vs PRM Exam Requirements:
For FRM You Need:
There are no educational requirements but the candidate should have at least 2 years of full-time work experience either related to risk management including portfolio management, risk consulting, risk technology or other related areas.
For PRM You Need:
The work experience requirements for PRM are based on the education qualifications, detailed as below:
No Bachelor’s Degree – 4 Years
Bachelor’s Degree – 2 Years
Post Graduation – No work experience required
Why Pursue FRM?
FRM is a highly valued risk management credential and it has been longer in existence as compared to PRM and has acquired industry-wide recognition over these years. Those with good amount of professional experience and exposure in the field of risk management are better suited for this credential as compared to those new to this specialized field. Another point to be remembered is that FRM is more broad-based in the way it approaches the risk management areas as compared to PRM, making it a better fit to prepare for roles like Risk Assessments Manager and Head of Treasury Department, which require broad-based knowledge of the field.
Why Pursue PRM?
PRM is no doubt another much-valued credential for risk management professionals and is best suited for those interested in developing expertise in quantitative aspect of financial risk management. One of the advantages afforded is that no prior work experience in the field of risk management is mandatory to appear for this exam. It must be kept in mind that both these certifications share upto 80-90% of the learning areas which makes it a little hard to decide which certification should be opted for. However, PRM is slightly more technical and is more suited for individuals with a mathematical bent of mind, making it more suitable to prepare for the roles of Predictive Analyst and Risk Analyst among others.
Other useful comparisons related to Risk Management Certifications
- FRM and MBA – which is better?
- FRM and CAIA – which is better?
- CA vs FRM – key differences
- CFA vs FRM – who is the king?
- PRM vs CRM – what’s the difference
In short, both of these certifications help upgrade and validate the risk management capabilities of a professional while enhancing their potential worth in the eyes of prospective employers. Choose the one that meets your career goal. All the Best!