FRM vs ERP

Updated on May 15, 2024
Article byWallstreetmojo Team
Edited byAshish Kumar Srivastav
Reviewed byDheeraj Vaidya, CFA, FRM

Difference Between FRM and ERP

FRM is the short form for Financial Risk Manager. With this course, an individual can earn job opportunities in investment banking, risk assessment management, etc., whereas ERP is the short form for Energy Risk Professional. With this course, an individual can earn job opportunities in global energy companies, etc.

In an increasingly complex financial world, there has been a growing demand for risk professionals with the capabilities to identify and evaluate financial risks. 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 to minimize or manage them by adopting a strategic approach. In the course of this article, we will discuss two key risk management credentials, FRM and ERP, that deal with financial and energy risk management, respectively. This should help anyone planning to pursue a career in risk management in either of these areas.

FRM-vs-ERP

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FRM vs. ERP Infographics

Reading time: 90 seconds

Let’s understand the difference between these two streams with the help of this FRM vs. ERP Infographics.

FRM-vs-ERP-infographics

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FRM vs. ERP Summary

Section FRM   ERP
Organizing Body The FRM exams are managed by the Global Association of Risk Professionals (GARP), USA.     The GARP, USA, manages the ERP exams. However, GARP has decided to discontinue the ERP program after the exams of 2021.
Pattern The course is divided into FRM Part I and FRM Part II.   The course is divided into ERP Part I and ERP Part II.
Duration of Course The candidates need to clear the Part II exam within four years of passing the Part I exam.   Given that the course will be discontinued, candidates who have cleared the Part I exam must pass the Part II exam by November 2021. After passing the Part II exam, they will have five years to submit their work experience to complete the ERP certification process.
Syllabus The course primarily covers the study of the following topics:
  • Quantitative Analysis
  • Risk Models
  • Financial Markets & Products
  • Valuation
  • Credit Risk
  • Market Risk
  • Operational Risk & Resiliency
  • Treasury & Liquidity Risk Management
  • Investment Management
  • Current Issues in Financial Markets
  The course primarily covers the study of the following topics
  • Crude Oil Market
  • Refined Product Market
  • Coal Market
  • Natural Gas Market
  • Electricity Market
  • Power Generation
  • Financial Energy Products
  • Energy Price Modeling
  • Risk Assessment Modeling
  • Risk Management Tools
Exam Fees The enrollment fee is $400, and the exam fee details are as follows.
  • Part I: $425 for early registration, $550 for standard registration, and $725 for late registration.
  • Part II: $350 for early registration, $475 for standard registration, and $650 for late registration
Currently, the registration of the Part II exam is available, and the details of exam fees are as follows
  • Part II: $350 for early registration and $475 for standard registration.
Jobs Some of the common profiles include
  • Risk Assessment Manager
  • Investment Banker
  • Financial Risk Consultant
  • Risk Management Analyst
  Some of the common profiles include
  • Energy Risk Analyst
  • Energy Risk Manager
  • Energy Consultant
Difficulty The exams are very difficult as only ~30% of the candidates who start the course clear both parts. The pass rates for the exams conducted for Part I and Part II during 2019 were 45.9% and 58.6%, respectively. [Source: GARP]   The exams are quite difficult as only ~40% of the candidates who start the course clear both parts. During November 2019, the pass rate for Part I and Part II were 56.3% and 70.7%, respectively. [Source: GARP]  
Exam Date The schedule of the upcoming exams for the year 2021 Part I: May 08-21, July 10-23, and November 13-26 Part II: May 15 (paper-based) and December 04-10 (computer-based)   The schedule of the upcoming exams for the year 2021
  • Part II: May 15 and November 20

What is FRM?

Financial Risk Manager (FRM) is a globally acknowledged credential offered by the Global Association of Risk Professionals (GARP), an international organization engaged in promoting industry standards in risk management. FRM focuses on financial risk management, making 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 a competitive edge to survive in the modern industry.

What is ERP?  

Energy Risk Professional (ERP) is an internationally acclaimed credential 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 that can offer some good career prospects in the global industry. These credentials focus on managing physical and financial risks involved in energy management and help acquire an in-depth understanding of global energy markets. In addition, participants are introduced to the structuring and trading of energy commodities and 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 two years of full-time work experience in 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 must demonstrate two years of relevant work experience to earn the designation. In addition, ERPs must maintain an active membership of GARP and earn 40 hours of Continuing Professional Development (CPD) every two years to keep up with the prevailing industry standards.

Why pursue FRM?

Risk professionals should pursue FRM with a reasonable amount of industry exposure 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 greatly from this. In addition, it helps a professional become a part of an elite global network of financial risk professionals. This can be of immense advantage to aspirants planning to become associated with organizations of a global repute.

Read more about FRM Exam Dates.

Why pursue ERP?  

ERP is meant for risk professionals who wish to acquire 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 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.

Conclusion

FRM is primarily meant for professionals with industry exposure in financial risk management who are looking to specialize in the field with a comparatively wider scope to explore opportunities related to the management of market and non-market financial risks in the global industry. On the other hand, ERP is aimed at aiding aspirants to 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 this industry. Therefore, FRM is more suited for those who have already worked in this domain and would now like to gain further expertise. In contrast, ERP is meant for those with relevant experience in energy risk management, making it somewhat a difficult designation to earn, but with its unique advantages in the emerging global scenario.

Reader Interactions

Comments

  1. Steven Fernandes says

    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?

    • Dheeraj Vaidya says

      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

  2. Jalen Feriz says

    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?

    • Dheeraj Vaidya says

      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.

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