FRM vs ERP – Which Could be The One For You? – In an increasingly complex financial world, there has been a growing demand for risk professionals with the capabilities to identify, evaluate and manage financial risks of various kinds. It is important to note that other key areas like technology and energy have also felt an urgent need for qualified risk professionals who can identify potential risks, including financial, and make it possible minimize or manage the risks by adopting a strategic approach. In the course of this article, we are going to discuss two key risk management credentials, FRM and ERP, dealing with financial and energy risk management respectively. This should be of help for anyone planning to pursue a career in risk management in either of these areas.
The article will give you information as per below –
- FRM vs ERP Infographics
- What is FRM?
- What is ERP?
- FRM vs ERP Exam Requirements
- Why pursue FRM?
- Why pursue ERP?
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FRM vs ERP Infographics
Reading time : 90 seconds
Lets understand the difference between these two streams with the help of this FRM vs ERP Infographics.
FRM vs ERP Summary
| Section | FRM | ERP |
|---|---|---|
| Certification Organized By | FRM is offered by GARP | ERP is offered by GARP |
| Number of Levels | FRM: 2 sets of papers FRM Part I: 100 Multiple choice questions FRM Part II: 80 Multiple choice questions | ERP: Consists of ERP Exam Part I & II ERP Part I: 80 Multiple choice questions ERP Part II: 60 Multiple choice questions |
| Mode/duration of examination | 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. | Part I & II exams are conducted on the same day in morning and afternoon sessions of 4-hour duration each. |
| Exam Window | In 2017, the FRM Exam will be offered on May 20, 2017 and November 18, 2017. | In 2017, the ERP Exam will be offered on May 20, 2017 and November 18, 2017 |
| Subjects | Part I Exam Topics: Quantitative Analysis Financial Markets and Products Foundations of Risk Management Valuation and Risk Models Part II Exam Topics: Market Risk Measurement and Management Credit Risk Measurement and Management Operational and Integrated Risk Management Risk Management and Investment Management Current Issues in Financial Markets | Part I Exam Topics: Introduction to Energy Commodities and Risk Management Crude Oil Markets and Refined Products Natural Gas and Coal Markets Electricity Markets and Renewable Generation Part II Exam Topics: Price Formation in Energy Markets Risk Management Tools Financial Energy Transactions |
| Pass percentage | November 2016 Exams Pass Rates: FRM Part I: 44.8% | FRM Part II: 54.3% | In Nov 2015 Exam Pass Rates was 52.7% and In November 2016 Exams Pass Rates was ERP Part I: 62.6% | ERP Part II: 51.8% |
| Fees | New Candidate - FRM Exam Part I Early Registration Fees: December 1, 2016 - January 31, 2017 $750 Enrollment fee $400 Exam fee $350 Standard Registration Fees: February 1, 2017 - February 28, 2017 $875 Enrollment fee $400 Exam fee $475 Late Registration Fees: March 1, 2017 - April 15, 2017 $1050 Enrollment fee $400 Exam fee $650 | New Candidate - ERP Exam Part I Early Registration Fees: December 1, 2016 - January 31, 2017 $750 Enrollment fee $400 Exam fee $350 Standard Registration Fees: February 1, 2017 - February 28, 2017 $875 Enrollment fee $400 Exam fee $475 Late Registration Fees: March 1, 2017 - April 15, 2017 $1050 Enrollment fee $400 Exam fee $650 |
| Job opportunities/job titles | FRM Certified professionals can be best fits for the roles of: Financial Risk Consultant Risk Assessments Manager Risk Management Analyst Investment Banker Head of Treasury Department | ERP certified professionals can find excellent work opportunities with global energy firms, large financial institutions investing in energy markets and technology and consulting firms. As per GARP, some of the top employers for ERP professionals include: Bank of America Barclays Capital British Petroleum Constellation Energy Deloitte Ernst & Young |
What is FRM?
Financial Risk Manager (FRM) is a globally acknowledged credential offered by Global Association of Risk Professionals (GARP), an international organization engaged in promotion of industry standards in the field of risk management. FRM is focused on financial risk management which makes it a highly specialized certification program. This make 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 be able to add that competitive edge to survive in the modern industry.
What is ERP?
Energy Risk Professional (ERP) is an internationally acclaimed credential, also awarded by GARP. This is perhaps the only credential of its kind, developed for those with a keen interest in energy risk management as a highly specialized field which can offer some good career prospects in the global industry. This credentials focuses on management of physical and financial risks involved in energy management and helps acquire an in-depth understanding of global energy markets. Participants are introduced to the structuring and trading of energy commodities along with concepts of identification, evaluation and management of complex energy risks.
FRM vs ERP Exam Requirements
FRM:
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.
ERP:
There are no prerequisites to register for the exam. However, candidates have to demonstrate 2 years of relevant work experience to be able to earn the designation. ERPs are required to maintain an active membership of GARP and earn 40 hours of Continuing Professional Development (CPD) every 2 years to be able to keep up with the prevailing industry standards.
Why pursue FRM?
FRM should be pursued by risk professionals with a reasonable amount of industry exposure to be able to acquire advanced risk management knowledge and skills imparted as a part of the certification program. Those willing to specialize in financial risk management can benefit a great deal from this credential as it helps a professional become a part of an elite global network of financial risk professionals. This can be of immense advantage for professionals planning to become associated with organizations of global repute.
Read more about FRM Exam Dates and Registration Process
Why pursue ERP?
ERP is meant for risk professionals focused on acquiring expert knowledge and capabilities in energy risk management instead of risk management as more of a generalized field. It must be understood here that risk management in any form is a very complex field and one should only go along with such a career choice if they are really sure about it. Energy risk management might be considered more of a developing field but quite an important one, keeping in mind the central role of energy as a commodity in the modern world. After earning this designation, professionals can look for work opportunities with global energy organizations.
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Conclusion
FRM is primarily meant for professionals with industry exposure in financial risk management and looking to specialize in the field with a comparatively wider scope to explore opportunities related to management of market and non-market financial risks in the global industry. On the other hand, ERP is aimed at helping specialize in energy risk management which is a unique field in and of itself considering the emerging significance of energy commodities, development of energy markets and the need for skilled professionals to manage inherent physical and financial risks in a highly complex energy industry. FRM is more suited for those who have already worked in this domain and would like to gain further expertise in the field, whereas ERP is meant for those with relevant experience in energy risk management which makes it a somewhat difficult designation to earn, but with its own unique advantages in the emerging global scenario.
Thanks for posting this blog. I found it very useful. Can you tell me how much Is the average salary range of FRM in India?
Thanks. Well Average salaries for Financial Risk Manager Stands anywhere between INR 776,000 and INR 1,236,504 in India. You can refer to this article FRM salary for further detail
Actually I went through some of the other resources and this is one of the best resource that I have seen today. You bring such useful knowledge which is easy to understand and especially I must say about this FRM blog. You have explained each point with brief explanation. Thanks and keep posting!! Can you tell me what the career prospects are after Certified FRM?
thanks for your kind words. Well you have to know that the demand for financial risk managers has always being strong. But at the same time your career prospects may vary according to your professional experience. The career prospects after Certified FRM are you can get employed at banking institutions, consulting firms, government regulating agencies, financial services institutions and there are many others.