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FRM vs PRM – Which is the Right Career Path? FRM is offered by GARP whereas PRM is offered by PRMIA. Both certifications covers topics core areas of Risk Management. However, FRM Certified professionals can be best fits for the roles of Financial Risk Consultant, Risk Assessments Manager, Risk Management Analyst, Head of Treasury Department, whereas, PRM Certified professionals are best suited for Predictive Analyst, Chief Risk Officer, Investment Risk Manager and Senior Risk Analyst
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.
FRM vs PRM Summary
|Certification Organized By||FRM is offered by GARP||PRM is offered by PRMIA|
|Number of Levels||FRM: 2 sets of papers |
FRM Part I: 100 Multiple choice questions
FRM Part II: 80 Multiple choice questions
|PRM: 4 sets of papers
PRM Part I: 36 Multiple choice questions
PRM Part II: 24 Multiple choice questions
PRM Part III: 36 Multiple choice questions
PRM Part IV: 24 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.||Time duration for each of PRM exams is given below:
Exam I: 2 Hours
Exam II: 2 Hours
Exam III: 1.5 Hours
Exam IV: 1 Hour
|Exam Window||In 2017, the FRM Exam will be offered on May 20, 2017 and November 18, 2017.||In 2017, the PRM Exam will be offered on:
February 20 - March 17, 2017
May 22 - June 16, 2017
August 14 - September 8, 2017
November 20 - December 22, 2017
In 2018, the PRM Exam will be offered on:
February 19 - March 16, 2018
May 28 - June 22, 2018
August 20 - September 14, 2018
November 19 - December 21, 2018
|Subjects||Part I Exam Topics: |
1. Quantitative Analysis
2. Financial Markets and Products
3. Foundations of Risk Management
4. Valuation and Risk Models
Part II Exam Topics:
5. Market Risk Measurement and Management
6. Credit Risk Measurement and Management
7. Operational and Integrated Risk Management
8. Risk Management and Investment Management
9. Current Issues in Financial Markets
|Exam I: Finance Theory, Financial Instruments and Markets
Exam II: Mathematical foundations of Risk measurement
Exam III: Risk Management Practices
Exam IV: Case studies, PRMIA standards of best practice, conduct and ethics, Bylaws
|Pass Percentage||November 2016 Exams Pass Rates: FRM Part I: 44.8% | FRM Part II: 54.3%||To pass the minimum percentage you need to score is 60%. Out of all students who have got the PRM designations are 65% till now. Individual exams have pass rates between 59% to 78%.|
|Fees||New Candidate - FRM Exam Part I|
Early Registration Fees:
December 1, 2016 - January 31, 2017
Enrollment fee $400
Exam fee $350
Standard Registration Fees:
February 1, 2017 - February 28, 2017
Enrollment fee $400
Exam fee $475
Late Registration Fees:
March 1, 2017 - April 15, 2017
Enrollment fee $400
Exam fee $650
|If you want to take PRM exam, you need to purchase a voucher. This voucher is your vehicle to scheduling your exam with the test center, Pearson VUE. Have a look at the fees you need to pay to pay to purchase the voucher.
PRM Exam Voucher Bundle Price
4 PRM Exam Vouchers + Digital PRM Handbook $1200
4 PRM Exam Vouchers + Printed PRM Handbook $1350
4 PRM Exam Vouchers + Digital + Printed PRM Handbook $1400
|Job Opportunities/Job Titles||FRM Certified professionals can be best fits for the roles of: |
Financial Risk Consultant
Risk Assessments Manager
Risk Management Analyst
Head of Treasury Department
|PRM Certified professionals are best suited for:
Chief Risk Officer
Investment Risk Manager
Senior Risk Analyst
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 the 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 up to 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!