Difference Between CIPM and FRM
CIPM offers job opportunities to individuals in investment banks, research firms, investment management, plan sponsors, GIPS verification firms, etc whereas FRM offers job opportunities to individuals who seek to work as an estate planners, retirement planners, risk managers, financial managers, etc.
In this comparative, we discuss the two certifications – CIPM and FRM.
CIPM exam (offered by CFA Institute) mainly comprises of investment performance measurement and its attributes. On the other side is the Financial Risk Manager (FRM) is offered by GARP, which is all about Risk management.
CIPM vs. FRM Infographics
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Let’s understand the difference between these two streams with the help of this CIPM vs. FRM Infographics.
CIPM vs FRM Summary
| Section | CIPM | FRM |
|---|---|---|
| Certificate organized by CIPM | CIPM is organized by the CFA. | FRM is organized by Global Association of Risk Professionals that is GARP. |
| Number of levels | There are two levels to appear for before you clear this course; that is the principle and experts level. | Even FRM has two parts to clear that is the FRM Part I and FRM Part II. |
| Mode/duration of examination | CIPM Principles Exam: 3 Hours(100 multiple choice questions) CIPM Expert Exam: 3 Hours(80 item set questions,20 scenarios; each one followed by four multiple choice questions) | Each of FRM exams is of 4 hour duration. Both of the exams can be taken within a single day with Part I carried out in the morning and Part II carried out in the second half of the day. |
| Exam Window | CIPM Exam Dates 2017: March 2017: 16 Mar – 31 Mar September 2017: 16 Sep – 30 Sep | In 2017, the FRM Exam will be offered on May 20, 2017 and November 18, 2017. |
| Subjects | The following subjects are covered in the CIPM examination. 1. Performance Measurement 2. Performance Attribution 3. Performance Appraisal and manager selection 4. Ethical standards 5. Performance Presentation and GIPS standards. | FRM Exam Part I This part emphasizes on the tools used to view financial risk. 1. Foundations of risk management concepts 2. Quantitative analysis 3. Financial markets and products 4. Valuation and risk models FRM Exam Part II This part emphasizes on applying tools gained in the FRM Exam Part I. 1. Market risk measurement and management 2. Credit risk measurement and management 3. Operational and integrated risk management 4. Risk management and investment management 5. Current issues in financial markets |
| Pass percentage | September 2016 exam results: Principles exam results:- pass rate: 42% Expert exam results:- pass rate: 52% | November 2016 Exams Pass Rates: FRM Part I: 44.8% FRM Part II: 54.3% |
| Fees | The first time registration fee for CIPM Principles Exam and CIPM Expert Exam is $975 and if registering again for any of them, it is $500. | Fees for FRM exams are as follows 1.Early: December 1, 2016 - January 31, 2017 - $750 , enrollment fees – $400 and examination fees is $350 2.Standard: February 1, 2017 - February 28, 2017 - $875, enrollment fees – $400 and examination fees is $475 3.Late: March 1, 2017 - April 15, 2017 - $1050, enrollment fees – $400 and examination fees is $650. |
| Job opportunities or job titles | Can make you a market expert as an analyst, risk manager, fund manager, professional advisor, investment banker, and much more | Once you complete your FRM successfully you have the following designations awaiting you Chief Risk Office, Senior Risk Analyst, Head of Operational Risk, Director of Risk Management etc. |
Certificate in Investment Performance Measurement (CIPM)
CIPM is an international course that is available for professional candidates and also people who are starting with their careers. CFA Institute offers CIPM, and it mainly comprises of investment performance measurement and its attributes which means, it is a theory which studies the models to explain those processes.
In brief, some global investment firms are subjected to showing a great deal of variety in terms of regulations, international laws, market customs that state on how investment performance should be measured and advertised.
GIPS, which is the standards of the global investment, is a set of rules which are laid down by the management industries to monitor the continuous growth in the worldwide patchwork of regulation covering investment return calculations and advertising and also since GIPS is the professional body of knowledge it also tests the competency of the people or organization’s associated with the field, and this is how the CFA formed the CIPM association.
Since this, a professional course for people from the financial field, one must adhere to professional ethics and conduct that have been laid down by the CFA and also proves one’s competence in the respective field.
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Financial Risk management (FRM)
Financial Risk Manager (FRM) is offered by the Global Association of Risk Professionals (GARP), an international organization engaged in the promotion of industry standards in risk management. FRM is focused on financial risk management, which makes it a highly specialized certification program. This makes it suited for individuals planning to gain expertise in financial risk management instead of adopting a generalized approach. An increasing number of global organizations are looking for accredited risk professionals to add that competitive edge to survive in the modern industry.
CIPM vs. FRM – Exam Requirements
CIPM Exam Requirements
If you are thinking about appearing for a professional course, there are certain requirements every course has. Do not forget that these are professional financial examinations, and to know the requirements, just peep into the notes below.
- Experience of more than two years in calculations, showing investment results, analyses, giving consultation services, evaluating different investments, legal and regulatory services, directly supporting investment either technically or through accounting, standard verification and compliance experience of GIPS, teaching investments or even monitoring people dealing in investments either directly or indirectly.
- Otherwise, you need more than four years of experience in the industry of investments that usually involves applying and evaluating financials of people, working on economic and statistical data of clients, manages marketing for investment products and services, monitoring the investment firms to make sure that they comply with the regulatory standards, evaluating and recommending investment managers.
FRM Exam Requirements
FRM has very clear 3 requirements we will explain in detail
- Clearing the FRM examination Part I
- You will also have to clear Part II within 4 years of clearing the part I
- You will have to have a complete 2 years of full-time experience in financial risks.
Besides the above 3 criteria’s the candidate has to submit a letter that describes his professional role in managing financial risk in about 4 to 5 sentences. This application needs to cover ‘My Programs’ within your account. This work experience that is submitted need not be more than 10 years before appearing the FRM examination part II. Relevant work experience is counted as a research analyst in financial risk management, financial risk, academic teaching, and practitioners.
Experiences that will not be counted are teaching students, part-time jobs or internships, or any other jobs that are pursued during school days. The candidate has 5 years of submitting his work experience after he has cleared his FRM part II. In case he does not, or in case he fails to do so, he will have to reappear his examinations of FRM part I and II, along with paying the fees again. He cannot use the FRM certification unless the association has certified him.
Why pursue CIPM?
CIPM certifications help you in the highly specialized investment industry and also gives you an upper hand in investment decision-making processes, firm’s asset-gathering, a position as an analyst at an accounting firm with a GIPS verification practice, or an analyst’s position at an investment consulting firm that conducts manager searches and monitors institutional clients’ investment results. As we already know that the prestigious CFA institution backs CIPM, so there are the best minds in the investment industry who are involved who are dedicated, ethical, in-depth knowledge of investment performance, and know the GIPS “cold.” Salary is the most important basis in any career, so according to the survey in 2016, a candidate can get paid anywhere between $100 to $150K in the United States of America.
Why pursue FRM?
Becoming an FRM has its perks and Advantages. It is one of the most renowned qualifications, and it will also make the individual an all-rounder in domains that involves risk, like operational, market, credit, or investments. Also, when you are an FRM certified individual, it gives you an edge over your peers and widens horizons and also will be like an extra feather in your cap.
Benefits of FRM certification are Enhance your reputation, Develop your knowledge and expertise, Stand out to employers, and set yourself apart, Demonstrate your leadership at work, Increase your opportunities across the globe.
Salary is the basis of everything, so if you are in the States, your salary can range anywhere between 250000$ to 300000$ per year. In India, your salary per year can be anywhere between 9-12 Lakhs per annum and additional perks like paid vacation, bonuses per year, pensions life and medical insurances.
A few employers for FRM Individuals are UBS, Deutsche Bank, and HSBC, auditing firms Ernst & Young (EY), PricewaterhouseCoopers (PwC) and KPMG, etc.
Career prospects for an FRM executive are Risk Management Analytics Consultant & personal banking, Senior Operational Risk Manager, Corporate Risk COO& Risk Officer for Global Asset Liability Management, Risk Manager, Prudential Risk, to name a few. So FRM certified individuals are in great demand and its niche market, and very few people are involved with the rite certifications. If you have an FRM certification, you have the edge over your contemporaries.
Other useful comparisons
- CIPM vs. CAIA
- CIPM vs. CFA
- FRM vs. Actuary
- FRM vs. PRM
- FRM Salary | India | USA | UK | Singapore | Top Employers
Conclusion
If you are interested in studying the performance of investment and managing the same for the public, then this is just what you would like to do a certification backed by the CFA is an absolute yes when it comes to making a career in finance. This certification helps you gain a good start package, along with great recognition, and also grow well in your professional aspects. This course is not all that difficult to start with, giving you a confirmation if you work a little hard, chances are you might crack the examination well.
Risk management is such a term for the finance people. All the investments revolve around this aspect for a risk manager who balances to minimize risk. And if you think you can have this big responsibility for your client’s money, then you do not have a better job than this. If you want to reach the high designations of financial risk management, this course will help you reach your desired designation.
