FRM Exam (Financial Risk Management Certification)
FRM exam (Financial Risk Management) is a part of tests conducted by Global Association of Risk Professionals to issue a FRM certification to the person who passes the exam recognizing that the person is eligible to work in financial environment because he has a strong knowledge and sound understanding of financial risk, its analysis and its management.
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This comprehensive Financial Risk Management article will give you nuts and the bolt of FRM Certification Examination, pattern, study tips, exam resources, etc.
- About FRM Program
- Why Pursue Financial Risk Management Certification?
- FRM Exam Format
- FRM Exam Weights / Breakdown
- FRM Certification Examination Fees
- FRM Results & Passing Rates
- Financial Risk Management Study Material
- Strategies: Before the FRM exam
- Strategies: During the FRM exam
- Scholarship Opportunities for FRM Certification
- Deferral policy
- Useful FRM Exam Prep Resources
Please note that, like the FRM certification exam, there are various other credentials from which you could pick, subject to the area of finance you want to specialize in. You must choose yours carefully as each one is exclusive and provides certain paybacks. If not, then it won’t count. If you are confused about which one to go for, you may look at a comparative analysis on CFA vs. FRM. To get a deeper understanding of the CFA examination, you can look at the Beginner’s Guide to CFA Examination.
What is the FRM Exam (Financial Risk Management Certification)?
The Global Association of Risk Professionals (GARP®) came up with the Financial Risk Manager (FRM®) for those interested in getting certified as someone serious about managing risks. Financial Risk Management can be a treasured certification which can help you in career enhancement, stand out and get recognized among the employers and allow you to improve your knowledge and expertise in the area of financial risk management.
- Roles: Financial Risk Consultant, Risk Management, Credit Management, Asset Liability ManagementAsset Liability ManagementAn asset/liability management is paying off liabilities from assets and cash flows of a company. Its proper implementation reduces the risk of loss for not paying the liabilities on time. Companies must ensure that assets and cash flows are available on time to avoid additional interest and penalties.read more, Risk Appraisal, Risk Assessment. FRM may not be useful for those looking for Investment BankingInvestment BankingInvestment banking is a specialized banking stream that facilitates the business entities, government and other organizations in generating capital through debts and equity, reorganization, mergers and acquisition, etc.read more or Equity ResearchEquity ResearchEquity Research refers to the study of a business, i.e., analyzing a company's financials, performing Ratio Analysis, Financial forecasting in Excel (Financial Modeling), & exploring scenarios to make insightful BUY/HOLD/SELL stock investment recommendations. Moreover, the Equity Research Analysts discuss their findings & details in the Equity Research Reports. read more Careers
- Exam: The FRM certification program consists of FRM Exam Part I and Part II, pencil, and paper multiple choice exams.
- FRM Exam dates: Both the FRM Exam Part I and Part II are conducted twice a year in May and November (usually third Saturday). Also, both the levels can be taken on the same day at once.
- The Deal: The two-part FRM Exam tests advanced, cumulative knowledge, and the concepts tested on the FRM Exam Part I are needed for Part II. The FRM certification programs two parts concludes with a four-hour examination each. Both FRM Part I and Part II can be taken on one single day. Although if you do not exact Financial Risk Management Certification Part I and clear Part II, you will still have to appear for both the exams next time.
- Eligibility: Anyone can enroll to take the FRM exams.
FRM Certification Program completion criteria
- Pass the FRM Exam Part I and Part II within 4 years
- Candidates must take the FRM Exam Part I before taking Part II
- Demonstrate 2 years of relevant work experience. This work experience cannot be more than 10 years before having passed the FRM Exam Part II. Also, the experience earned for school will not be considered, including internships, part-time jobs, or student teaching. A candidate has 5 years to submit their work experience. After 5 years, the candidate will have to re-enroll in the FRM certification program and pay the required fees again.
- Certified FRMs are strongly encouraged to earn 40 hours of Continuing Professional Development (CPD) every two years to maintain the latest best practices in risk management.
Recommended study hours: GARP recommends that FRM candidates dedicate around 200 hours of study to prepare for each part of the FRM exams.
What do you earn? You become a certified Financial Risk Manager (FRM®)
Why Pursue the FRM Exam?
FRM certification should be chosen and pursued because it is required in the current economic and finance industry. But at the same time, you need to consider your career prospects, which could vary according to your interests and recent professional experience, if any.
- FRM Certification does not guarantee a job or a salary hike. Still, yes, it gives you an edge over your counterparts, provides a good advantage over your colleagues at your workplace.
- With this, you get an opportunity to prove your worth, which could help you with the salary hike and not just the certification.
- Moreover, the focused knowledge and skills you learn in financial risk management, the opportunity to network, and access with financial risk professionals can provide you with exposure to the industry.
- This certification will give you a chance to indicate a high-value skill set in a niche fragment of the finance domain.
Have a look at the top 10 companies and the top 10 global banks employing the most FRM’s.
| Top 10 Companies | Top 10 Global Banks |
|---|---|
| ICBC | ICBC |
| Bank of China | China Construction Bank |
| HSBC | Agricultural Bank of China |
| Agricultural Bank of China | Bank of China |
| Citigroup | JP Morgan Chase |
| KPMG | Wells Fargo |
| Deutsche Bank | HSBC |
| Credit Suisse | Citigroup |
| UBS | Bank of America |
| PwC | Banco Santander |
FRM Exam Format
| FRM Exam | Financial Risk Management Certification – Part I Exam | Financial Risk Management Certification – Part II Exam |
|---|---|---|
| Focus on | Essential tools and techniques used in risk management and various theories that use them. | Application of the tools and techniques learned in Part I and deeper insights into significant sub-parts of risk management. |
| Exam format | Multiple Choice Questions (MCQ) | Multiple Choice Questions (MCQ) |
| Questions | Equally-weighted 100 questions | Equally-weighted 80 questions |
| Duration | 4 hours | 4 hours |
Key highlights of the FRM exam format
FRM Certification Exam – Part 1
- This part of the FRM exam focuses primarily on critical tools and theories required to gauge financial risk.
- The broad area of study would include the foundation of risk management, quantitative analysis, financial marketsFinancial MarketsThe term "financial market" refers to the marketplace where activities such as the creation and trading of various financial assets such as bonds, stocks, commodities, currencies, and derivatives take place. It provides a platform for sellers and buyers to interact and trade at a price determined by market forces.read more and products, valuation, and risk models.
- The exam is in multiple-choice questions format, which makes it easy but taking into consideration the time aspect, the exam taker has, on average, around 2.4 minutes per question.
- Questions are aimed to relate theory to practical, real-world problems to understand risk management.
- No penalties for incorrect answers :-)
FRM Certification Exam – Part II
- This part of the FRM certification exam is a notch up then the Part I exam and focuses on market risk management, credit risk management, operational and integrated risk management, investment riskInvestment RiskInvestment risk is the probability or uncertainty of losses rather than expected profit from investment due to a fall in the fair price of securities such as bonds, stocks, real estate. In addition, each type of investment is prone to some degree of investment or default risk.read more management, and current issues in financial markets.
- The exam is again. Multiple choice questions format and the exam taker has an average of 3 minutes per question.
- Questions are practical, wherein the candidates are expected to behave as a risk manager and deal with risk management.
- No negative marking for incorrect answers :-)
FRM Exam Weights / Breakdown
FRM Certification Exam – Part I
- Every particular aspect of financial risk management will weigh differently in the exam (Breakup provided below). To clear the Part I exam, you are required to demonstrate extensive knowledge of all the areas laid down by the FRM curriculum.
- You need to practice well for the quantitative section, especially if you from a commerce background and have not worked on quantitative problems before.
- One great news for you. There are NO SECTIONAL CUT-OFFS! Yes, you can clear the exam even if you get the 4th quartile in one of the sections. However, it is highly advisable not to screw-up the high weight sections you see below.
FRM Certification Exam – Part II
- The FRM certification Part II exam curriculum has been divided into five main areas (outlined below with their weight)
- The maximum value and focus of the exam are for the sub-areas of risk management such as Market Risk Management, Credit Risk ManagementCredit Risk ManagementCredit Risk Management is the process of mitigating the risk associated with each security in a portfolio. There are various ways to eliminate the potential risks posed by a market.read more Operational & Integrated Risk Management.
- Again there are no sectional cut-offs :-)
FRM Certification Exam Fees
The following is the information for FRM Certification Part I May 2020;
You will have to pay a one-time enrollment fee of $400. Another aspect which needs to be taken into account is the time of payment. The earlier you register for the exam, the cheaper it is. For instance, the price during the third deadline will cost you US $950, whereas the first deadline will cost you US $300 less than the US $650.
The FRM certification program enrollment fees are valid for four years, which means that you need to appear for the Financial Risk Management Certification – Part I & II exam within this period.
The following is the information for Returning candidate FRM Certification Part 1 & FRM Certification Part II
source – GARP
FRM Results & Passing Rates
The FRM results are declared through an email generally six weeks after the exam is conducted. You are also provided with the quartile results, which will allow you to understand how you scored on the broad areas of the exam concerning other participants. Also, the passing score is not revealed and is determined by the FRM committee.
The passing rates fall within a range of 30-60 % for both parts of the FRM exam. Let’s look at the passing rates for each of the levels;
FRM Exam Part I Passing Rates
- For the last 5 years (2016-2020), the pass percentage for the Part I Exam varied in the range of 42% to 50%, with an average passing rate of 44%.
- The pass rate of Part I for Nov 2020 was 45%
| FRM Part 1 Exam Pass Percentage | |
|---|---|
| May 2016 | 45% |
| Nov 2016 | 45% |
| May 2017 | 42% |
| Nov 2017 | 42% |
| May 2018 | 41% |
| Nov 2018 | 50% |
| May 2019 | 42% |
| Nov 2019 | 46% |
| May 2020 | 44% |
| Nov 2020 | 45% |
FRM Exam Part II Passing Rates
- For the last 5 years (2016-2020), the pass percentage for Part II Exam varied in the range of 50% to 62%, with an average passing rate of 56%.
- The pass rate of Part II for Nov 2020 was 59%.
| FRM Part 2 Exam Pass Percentage | |
|---|---|
| May 2016 | 50% |
| Nov 2016 | 54% |
| May 2017 | 54% |
| Nov 2017 | 52% |
| May 2018 | 53% |
| Nov 2018 | 56% |
| May 2019 | 60% |
| Nov 2019 | 59% |
| May 2020 | 62% |
| Nov 2020 | 59% |
FRM Exam Study Material
Here is a comparison between the study material used to prepare for your FRM Certification Part I &II exams. It includes the study material available on the GARP site and Schweser.
| Study Material | GARP | Schweser |
|---|---|---|
| 2021 FRM Exam Part I eBooks | As part of the registration | |
| 2021 FRM Exam Part I Books | $300 + shipping | $399 |
| 2021 FRM Exam Part II eBooks | $250 + shipping | |
| 2021 FRM Exam Part II Books | $300 + shipping | $399 |
Also, you need to note that several packages are available with Schweser. You could choose the one with the features that suit your requirement. Although for comparison purposes, I have included the price and attributes of the Essential Self Study Package. Further to decide whether to opt for the FRM curriculum notes or the prep material will depend upon the time you will invest in the preparation of the FRM exam.
FRM Exam Strategies: before the Exam
There is no magic, no shortcuts but purely dedicated efforts that will get you through. Let’s look at a few points that you could consider including in your preparation for the FRM Part I Exam.
- Understand the curriculum- The first and the most important thing is to get the hang of the entire syllabus that you will study. Take efforts to understand it.
- Go through the GARP readings- It is essential to go through the core GARP readings at least once and also the FRM Handbook.
- Find a study partner- If you can find a study partner. Look out for someone in a similar situation as your and a schedule. You can be an excellent help to each other in case of doubts and each partner’s strength in a particular subject.
- Start early- Get this straight, these are not your college exams wherein last-minute study could get you through. To prepare well, start early and very well plan the preparation schedule, accordingly decide how much time to dedicate for each day. Especially if you are not someone from a finance and quants background, you will have to devote sufficient time to prepare.
- Stipulate your hours of study- Though the recommended hours are somewhere around 200 hours, it doesn’t imply you will clear the exam. These criteria are entirely subjective and require sincere efforts ranging between 100-500 hours.
- Prepare well for formulas and calculations- Important consideration for the exam takers is that there is a fair amount of quantitative aspect in the subject matter. The mathematical difficulty of the Exam is similar to that of a graduate-level finance courseFinance CourseInvestment Banking Certification Course, Financial Modeling Certification Course, Equity Research Certification Course, Private Equity Certification Course, Mergers & Acquisition, and so on are among the Top 10 Finance Certification Courses you can take.read more. Moreover, there are essential formulas and calculations which need to be known along with its correct application.
- Prepare your quick sheet- The syllabus involves many formulas (find them at the end of every chapter) and methods to various measurement types. Mind you, and formula sheets are not provided with the exam. So you need to memorize them. One way is to prepare your formula quick sheet and keep referring to it whenever you have free time during your work or traveling.
- Practice, Practice, and Practice! – Going through the notes, mugging up formulas is only a part of the preparation. The key is going to be the amount of practice you do in solving the problems. It might also happen that you practice today and might forget it after a week. So you can’t do much here but just KEEP PRACTICING! Solve as many practice exams, which would give you a hang of how the real thing would be like and make you confident in the final match.
- The course is not a novel- You should not be reading whenever you get time only for 15-20 minutes. Make a habit of studying for hours at a stretch for 2-3 hours. Learn the concepts and practice them immediately. If you do that right from day 1, you will not feel the need to, again and again, read the ideas.
- Solve sample papers by GARP- Going through the GARP core readings properly and solving their practice exam (available for free once you register for the exam) should give you a good confidence boost to clear the paper. Also, a few more practice exams Schweser is never harmful. However, do not expect the same level of questions to appear in your form. Anticipate that the GARP guys will take you for a ride. Simple- Prepare for the worst!
- Prepare every section- Do not drop a few concepts and topics, thinking that it is unimportant. Such decisions could backfire. You just cannot afford to ignore any formula from any corner of the books. STUDY EACH AND EVERYTHING.
Dedicate at least 1 week before the exam- If you are working, try and take a week off from before the exam and keep other commitments to the minimum. Use it to stuff yourself with some concepts for that extra edge. Devote this time practicing and rereading your material.
FRM Exam Strategies: During the exam
If you have prepared and done your homework well, the exam day should not be a problem. However, I have listed down a few essential suggestions that could be important.
- Keep difficult questions for the end- Many exam takers have observed that the last 10 or so questions were low-hanging fruits, which could be solved quickly. This can be unfortunate for those who, because of lack of time, cannot manage to get that far and are forced to guess the answers. So it is always better to come back to the difficult questions later on and keep answering the ones you know quickly.
- Be quick and alert- Although you might feel you have enough time for each question, keep one thing in mind; the Financial Risk Management questions are generally very tricky and challenging, so you need to be alert and save time to solve the difficult ones.
- Look for easy pickers- You will come across questions wherein you could quickly find solutions. Look out for them as you will be able to solve them correctly within no time. This will help you save time for other questions and also increase your chances of clearing the sections.
- Watch out for lengthy questions- Other types of questions that could be seen in the exam are the ones that were quite lengthy in both words and in the number of steps that were required to chalk out a solution. Plan out for them whether you want it to take it at the beginning of the end.
FRM Exam Scholarship Opportunities
- Candidates that cannot afford and self-fund the FRM exam can access the scholarship provided by GARP.
- This scholarship would cover only the Registration Fee for the FRM Exam Part I.
- Also, note that the scholarships are not available for the FRM Exam Part II.
- The decision of whether the scholarship has to be awarded to a particular candidate is at the discretion of GARP, and a candidate may be given only one scholarship with no exceptions.
Although to avail of the scholarship, the candidate will have to qualify. The following are the guideline laid down by GARP;
- The student must validate full-time enrollment in a graduate degree program at the time of the Exam. So in case, the student is currently enrolled in an undergraduate or certificate program cannot qualify for the scholarship.
- Faculty members would be eligible if they can validate full-time employment at their institution. A complete application form, which can be found on the GARP website, must be submitted along with the documents.
FRM Exam Deferral policy
There could be situations wherein you cannot take the exam you have enrolled for. In such cases, a deferral may be considered. Here you are allowed to defer the exam registration once to the next exam date. Although there are a few conditions;
- The deferral has to be submitted by the last day of registration.
- You will have to pay an administrative processing fee of USD 100.00 to defer your Exam.
- You will be automatically re-enrolled in the next Exam cycle, and in case you decide not to appear the next Exam, you will lose your Exam registration fee.
Conclusion
FRM certification should be chosen if you are keen on learning and pursuing a career in Financial Risk Management. Financial Risk Management also provides the opportunity to network with like-minded people and help you gain exposure in the Risk Industry. Though Financial Risk Management does not guarantee a job or a salary hike, yes, it gives you an edge over your counterparts. It provides a good advantage over your colleagues at your workplace. Choose this credential, keeping in mind the cost-benefit for yourself. It requires a fair amount of commitment, discipline, and hard work to be earned successfully. All the very best!
Recommended Articles
This has been a guide to FRM Exam. Here we discuss all Financial Risk Management Certification Exam, FRM Results, pass rates, exam strategies, deferral policy, and scholarship opportunities. You can also go through the following resources to learn more about FRM –
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I am ca final student and want to build career in Equity research.
Should i opt for FRM?
Hi Devbrat, if you want to build a career in Equity Research, then FRM is not the right certification to look at. FRM is all about Risk Management. Instead either take CFA or consider upgrading your excel based Financial Modeling and valuation skills.
Thanks
How to upgrade excel based Financial Modeling and valuation skill ?
Why don’t you look at this tutorial on Financial Modeling. There are ample resources on valuation too that you will find on this website.
Thanks…
Welcome Devbrat!
Hi Dheeraj
I have four years of experience in nationalised bank as PO and Branch Head where i was looking operations and retail loans. 1 year experience in Accounts, in Dubai Start up company. Now i am hunting for job and also planning for FRM after getting some decent job. Will my previous experience help in taking FRM.
Hello Akbar, I am not sure if your previous experience will help you in taking FRM. FRM primarily deals with risk management and quant stuff. If your experience in the bank was related to risk management dept, then your experience will be helpful.
Can u please tell me the enrollment fee for FRM is paid once for both part 1 and part 2 or again we have to pay the enrollment fee for part 2 also ???
Hi Purvi, enrollment fees is to be paid only once. If you are a returning candidate (for Part 1 or Part 2), then no enrollment fees is charged. For further details, you can look at this http://www.garp.org/#!/frm/fees-payments
Hi Dheeraj,
Your article is amazing !
Can you recommend me some good book/supplementary reading (say reference book) for FRM Part – I
Specially for the quantitative analysis , sometimes i find it difficult to understand from the notes.
Having some background knowledge will expedite my learning process.
Thanks in advance !
Hi Garima, thanks! Did you take access to Schweser Guides for FRM. If not, then they should be pretty useful. For quant, you can refer to this URL – https://www.bionicturtle.com/forum/threads/supplementary-beginner-maths-book-for-frm.3476/#post-9423
Hi,
First of all, thanks for taking the pain and passing a great piece of information, truly appreciated.
My query is I have a 15 months of work experience in insurance company and 2 years of work experience in investment bank working in (interest rate derivative,bonds and controls).
My question is whether frm will add value to my profile and whether the experience is considered once I clear the exams?
Frm along with mba(finance) can support my career strongly?
Please reply asap.
Hi Yogesh, My take is that FRM will add value to your current job and profile. Are you an MBA or are you thinking of leaving your job and pursue MBA along with FRM.
You may have to weight all options including the opportunity cost of leaving your current job and going ahead with FRM.
If you are in a good profile, MBA may not be totally required.
Do have a look at this post on FRM vs MBA
Hi Dheeraj,
I have registered for FRM level one, Is the material provided by Schweser sufficient to clear the exam?
Thanks,
Phani
Hi Phani, in most cases it is sufficient. I passed the exam by only referring to Schweser. However, it is always recommended to refer to the exam books for deep understanding and preparation.
Thanks,
Dheeraj
Hi Dheeraj,
Thanks for the such elaborate post on FRM explaining all the nitty and gritty details of it.I’m currently working in leading private sector bank in credit risk department responsible for Basel reporting for past one year .I’m planning to give FRM in May 2017 and little bit confused about where to start like which study material to use,self-study or join classes and from when I should start?
Hi Atulya, earlier you start, better it is! You can pick Schweser guides to start with and later join a self study/classroom trainings to complement the learnings.
Hi sir, I m working with public sector bank in credit department as Asst Manager and have done B.Tech. I m planning to take FRM in May2017 . U mentioned Schweser notes and GARP books, I have Schweser notes with me and would like to know from where we can order GARP books in India.
Ur post is very helpful
I think you can order them from Amazon
I having general banking experience then which CFA and FRM is better for me….otherwise I having
commerce background…
Hi Asif,
Given your background in Commerce + General Banking, i think CFA will suit you more. FRM is a bit mathematical in nature.
Hi Dheeraj,
Thank u so much for ur introduction of CFA & FRM.
I have a bachelor degree in Financial Engineering and a Master degree in Actuary.
I am very bad at accounting,so is it better for me to choose FRM?
I have just graduated and want to start my career in finance.
Leon
Hi Leon, FRM will be a natural choice given your background is Financial Engineering and actuaries.
Good luck,
Dheeraj
Hi Dheeraj,
I am planning to buy the BT Professional package worth $399 for the FRM Part 1 exams in Nov’16. Wanted your advice if I should go for BT or any other service provider. I have not heard good reviews about Schweser especially for the FRM exams. I have completed my Masters in Finance. I am also planning to appear for CFA Level 1 in Dec’16. I am working full time and as such I plan to put in 4 hours on weekdays and 8 hours each on the weekends. Does it sound like a good plan to clear both the exams?
Thanks,
Rajiv
I am sorry for this delayed reply. You can surely go for the BT professional package for FRM part 1. I have heard it is good, though I haven’t personally used those.
Good Luck,
Dheeraj
Hi deeraj,
I am a recently qualified chartered accountant and am planing to give both parts of FRM in Nov 2016.
Is it difficult to write to both parts in one sitting as i was warned it is difficult to crack both parts at one go..
Thanks in advance..,
Pradeep
Hi Pradeep, Congratulations on becoming a qualified CA! Taking both the exam at once does pose some risk like not being able to prepare for a particular exam, missing out on practice mock tests etc. However, if you are committed and can give sufficient time for the prep of both the exams, then you should go for both part 1 and 2.
Keyword is TIME. How much time are you willing to spend?
Thanks,
Dheeraj
Dear Dheeraj,
I have completd PGDBS(post grduation diploma in banking service) and presently i am working in corporate credit department of Axis Bank. I want to enhance my profile so, advice me which certification will help me whether it is CFA or FRM?
Hi Sumanth,
Since you are working for the credit department, FRM certification will suit you more.
Thanks,
Dheeraj
Am handling banking operations now and i dont have any experience in risk side. i have an engineering background… can i pass the his exam whithout any finance or risk background
Yes, you can. Why not? As you are an engineer, you must be Ok with the Quant section. Most of the risk management fundamentals derive from Quantitative Analysis.
Best of luck,
Dheeraj
Dear dheeraj ,
I am an engineer with MBA in development management . I have been working for last five years in various banks as credit manager fro agri Business . I want to take FRM . please guide whether my experience will count or not .
REgards
Arpit
Hi Arpit, i think it should count. Best way is to write to GARP and confirm with them on this.
Thanks,
Dheeraj
Hi
I have done bach. In financial markets
I have no experience of working yet and also i m exploring options of what to do next after my graduation
I am good in practical subjects and average in theoretical subjects
Do you recommend me to do frm??
Hi Neri, you can consider FRM only if you are interested in Risk Management side of Finance. If it doesn’t match with your interest, then FRM exam will be no use.
thanks,
Dheeraj
Hi Dheeraj,
I am just a commerce graduate working with an American Insurance Firm (Metlife) as an Accounts Associate.There i am responsible for preparing reconciliations and and certain accounting journal entries for Metlife’s state side operations. Would it be a wise choice for me to take up this course? or is it necessary to earn a professional degree first and then go for FRM course?.Also, will it help in my field of work?
Hi Nikunj, it is not necessary to have take a professional degree and then take FRM course. However, FRM exam may be of limited use in your current role of accounting and reconciliation. FRM course will be helpful if you are considering a change into Risk Management.
Dear sir
I am acting as an assisant manager in Federal Bank with 1 year experience.Now i do not want to do general banking any more so i have decided to expand my education now i have two choice CFA & FRM but i am confused that which one is more beneficial for my career.And my past education is MBA(Financial Markets).
Pls sir guide me in this regard
Hi Arjun, please consider your interest first. CFA is broad based and covers topics of Corporate Finance, Investment Banking, Derivatives, Fixed Income etc. However, FRM is totally focussed towards Risk Management. If you are keen to make a career in Risk Mgmt, then you can take FRM.
thanks,
Dheeraj
Hello Sir,
I have worked as an assistant professor and my area of PG is Economics with specialization in Mathematical Economics and Econometrics. Statistics was also a major subject.The subjects i have taught are Economics,Statistics and Banking.I want to take up FRM exam this November.
Please advise.
Hello Naboshree,
With your credentials, It should be fairly easy for you to clear the FRM examination.
All the best,
Dheeraj
Hello Sir,
Thank you for the wishes.
I just wanted to know if my work experience will count as i read it should?
Also how should I study so that I can clear it.
You need to start by picking some good exam prep guides and later attempt mock tests to gain confidence in the subject matter.
Good luck,
dheeraj
Hello Dheeraj
I have recently qualified as a Chartered Accountant and have experience in advisory, internal and statutory audits. I want to pursue a career in risk management and willing to appear for FRM part 1 in Nov 2016.
Will my current experience and clearing FRM part 1 exam help me to get an entry level job in risk management?
Thanks.
Hi Pratik, given you are CA with experience in advisory and audit, pursuing a career in Risk Management should not be difficult. Once you clear FRM exam, you will become eligible for such jobs.
Best of luck,
Dheeraj
Hello Sir,
I will be appearing for my CA final exam and I am planning to give FRM level one in November 2016. I have no experience in the field of equity or financial risk management. My query is that will I get a job after clearing level one? Also I want a job abroad after FRM.. What are the chances and scope?
Jesal
Hi Jesal, just by clearing the exam doesn’t necessarily ensure a job abroad. At this stage, it is important to stay patient and build your resume and acquire tangible skills. Take FRM as one of those skills.
Best,
Dheeraj
Hi, Can I know for Part 1 how many correct MCQ question needed to pass?
Thx
Not sure if GARP discloses the passing marks (number of correct questions to pass). However, in the last 5 years or so, the passing rate is around 50% (out of every 100 students, approx. 50 pass this exam).
Hi
I initially registered for May 2016 exam. Due to certain personal restrictions, I cannot appear in May 2016. At the same time I failed too defer to Nov 2016 and passed the GARP deadline of April 15, 2016. Now if I wish to appear in Nov 2016, do I need to pay the enrollment fee again or just the exam registration fee and how much is it?
Hi Sourav, sorry for the delayed reply. If you are reappearing for the exams, then you do not have to pay the enrollment fees again.
Thank u sir.. Your article is really good and proved helpful to me.. I wanted your advise on my pursual on FRM as I would be giving my B.Com last year exams in this month and I am also doing a course an capital market.. After this should I opt for FRM ?
Hi Chetna,
If you are interested in Risk Management roles, then you can opt for FRM examination. Please note that FRM contains is favourable for those who have quantitative background and requires very limited/no accounting knowledge.
Best,
Dheeraj
Hi,
I am MBA finance and working in small investment boutique firm for last 5 years, where I perform back end work for debt syndication (Term Loan and Working capital losn) for Small and middle group companies. My work profile is Financial and Non Financial Analysis (Initial screening and appraising the project), preparing optimum Financial Forecasts in concurrence with the management strategies, Prepare Project Report, Information Memorandum, Financial Projections, Preparing CMA data etc.
1) I would like to know that Whether CFA or FRM or any other course that can add value to my knowledge and career?(I am keen in giving CFA Exam in Nov 16)
2) Since in last 5 years have not studied I am little worried whether I will be able to give my 100% to studies along with work
3) What are the best material available in the market for both the above courses?
Thanks Rajesh.
Answers to your questions –
1) Given your work experience CFA will suit you more. did you appear for the CFA exam this time ?
2) shouldn’t worry too much about last 5 years. More important is your keenness to learn going forward. If you can find around 10-15 hours in a week for studies, then it should be good enough.
3) There are lot of different materials that you can consider – CFA institute material, Schweser Notes, WallStreetMojo’s CFA Video tutorials.
Thanks,
Dheeraj
Hi Dheeraj,
I am planninh to take Nov FRM part 1 exam. Currently working as asset management reporting analyst with one of the global bank. will this work exp count??
Hi Puneet, the work ex should count. However, it is best to write to Garp and confirm from them.
Thanks,
Dheeraj
Hi Dheeraj,
I am part of a testing team working for Treasury ,its around AssetLiabilityManagement .Also I am aspiring for FRM. I have 3.5 Years of experience.
Will it be advisable for me to appear for FRM?
Yes Sabah. Given that you are in ALM and Treasury, it is advisable to take FRM Exam.
Sir,
I enrolled for FRM in Feb 2014 and wrote the exam in November 2014. Also, cleared the same.Somehow, I could not write FRM level-II till date now, I have planned to write the exam in November 2016. Can you please tell me by which time I have to compulsorily clear the exam. Also, what is the deadline for submitting the work certificate.
Regards
Lokesh
Hi Lokesh,
You have to pass the FRM Exam Part II within 4 years of passing the FRM Exam Part I.
For more details, please check this link https://www.garp.org/#!/frm/frequently-asked-questions
Hi Dheeraj,
I’m pursuing BBA in Management Accounting and is currently an Operational level student at CIMA(UK). My query is- Will FRM add value to the course I’m already pursuing? Can I write FRM during my under graduation years?
Hi Shubhadeep, Yes even an undergraduate can appear for FRM examination. No problems with that. If you are interested in Risk Management side of Finance, then FRM will add lots of value.
hello Dheeraj,
I have completed my graduation in Banking and Insurance, and worked in operations department, in a recognised MNC for just 6 months, and resigned in order to study further, that is FRM. should i go for it ?
Hi Preetam, yes you can go for FRM.
Hi Dheeraj,
I am CA and currently working as credit analyst for loan sanctioning in a private Bank.
I am having few doubts. Pls clarify on below points:
1) Can i appear for both level FRM exam in Nov 2016 considering i am working.
2)Which book has to be referred.
3) Suppose i start preparing now for level 1 exam for May 2016, will that be sufficient considering i am working?
4) Will there be any change in syllabus if i buy bonks now as it will pe pertaining to May 2016 exam.
Regards
Keshav
Hello sir,
I m planning to write FRM part 1 on nov 2016
….i have just completed my graduation..and no work experience…so Frm is good option to go for?
FRM is a good option for those who want to add value in Risk Management. If you have interest in this area, then you can go for it.
Hi Dheeraj,
I am working as a Business Analyst in an IT Services firm in the BFSI vertical. I cleared L1 in November 2015 with average preparation from Schweser notes and some practice exams provided on the website by GARP.
I am undecided whether to write L2 in May this year or wait for November. The reason for my doubt is that the latest notes by none of the publishers are out yet (Bionic Turtle, GARP and Schweser), they would be coming sometime in February. Also would my work experience be relevant for obtaining the charter.
Please share your strategy for L2 and the ideal preparation time.
Request you advice.
Thanks,
Mukul.
Hi Dheeraj- I pan to take CFA L2 and FRM part 2 in June 2016 and may 2016. Is this practically possible, and how much of a effort would be required.
it is practically possible to take the exams back to back :-). Just that you need to invest time in the examinations.
Hi,
I have completed my PGDM with Finance specialization. Before 6 months I have joined NIIT Technologies Ltd as Financial Analyst in Investment Banking process.I am planning to prepare for FRM. Does FRM would add value to my profile or I should go for any other certification course. Please advise.
Thanks,
Tanushree Patra
Not sure if FRM will add value with respect to your current role in Investment Banking Process. You can consider CFA Exam or the Investment Foundation Program by CFA institute.
Hi Dheeraj,
are there practice questions that require very hard calculations?
And can one without previous deep knowledge in risk management and derivatives, understand shweser|GARP materials?
There are many practice questions that require calculations in Schweser and GARP material. You can understand this material. I will not say they are easy, just that if you have maths background, then it may not be very tough!
Hi,
I’m working in IT for about 12+ yrs now, and recently in Risk related IT system. Just today, I’ve enrolled myself for FRM L1 exam on May 2016 to learn more about Risk. Given my long experience in IT, will having FRM help in getting a role on the business side?
Is the GAARP notes enough to prepare or is Schweser or Bionic Turtle recommended in addition/instead of GAARP, if the GAARP notes happens to be dry and huge.
Thanks for your time.
GARP notes are great! but it is always beneficial to additionally prepare from Schweser / Bionic turtle as they are quick and to the point.
Hi Dheeraj,
I am currently working with Morgan Stanley, Testing team (Internal Audit for Operational Risk for the last 2 years almost. I have cleared Level 1 FRM in May and will appear Level 2 in May 2016. Can you advise me how to approach the Level 2. I have schweser and BT.
Also, will my experience count? Can you advise me the plan of action from now to May 20th 2016.
Practice. Try to finish the course early and appear for as many mock tests as possible.
Hi Sir,
I am a computer science student and working as asset and liability management analyst full-time. I am interested to write FRM, Is it possible to work for ~3 and half months and hit the exam in MAY 2016. If it is so how much time I have to invest every day to pass. If I read only SCHWESER material and do their practise questions for exam it would be fine or I have to go through any other material.
Yes, you have ample time to make a reasonable attempt. Schweser is enough as of now (given the time limitation)
Hi Dheeraj, I am a Chartered Accountant, CAIIB (Treasury Management), Certified Info System Banker, working with a top nationalized bank for past 4.5 years as Manager(Credit). Planning to take FRM part I in June 2016. Is it advisable for me to go for it?
yes you can if you want to stay relevant with Risk Management practices.
Hi
I am presently working in a bank in retail division for last 10 years and have been handling a Branch head profile for the last 2 years. It would be kind of you if you can clarify below points:
1) Does FRM suits my current work experience?
2) Does my experience count for FRM?
Regds
Abhishek
Hi Abhishek,
1. You should go for FRM only if you have interest in Risk Management. I am not sure it directly compliments your current profile of Branch Head.
2. Your experience as Branch Head may not count. However, it is best to seek a response from GARP directly. You can drop them an email and they would respond.
thanks,
Dheeraj
Hi , I want to know if I can give frm exam side by side my under graduation 2nd year Bcom(hons) or if there are any other professional courses that I can pursue other than frm ?
Hi Ayush, you can take FRM exam along with your graduation. Other exams like CFA etc have graduation as a minimum eligibility criteria.
Hi Dheeraj, I have been working as a Treasury Analyst at a trading desk for the past 3 years and I have been thinking of getting either CFA or FRM as my position deals a lot with liquidity and risk management. I’m a 39 year old looking to advance in my career and I can’t afford to waste time in getting a designation that wouldn’t help at this point. I really appreciate any advice in this matter.
Thanks in advance!
Javier
Hi Javier, FRM will surely help you not only in terms of knowledge but also earning credibility to your CV and experience.
Thanks,
Dheeraj
Hi
I am planning to give FRM I in Nov 2016,I am working as Manager-Credit Risk in one of reputed financial services company and has more than 5 years of experience in building statistical models such as Logistic Regression, Forecasting technique, score card development using sas, sql and VBA in Insurance and Telecom industry.I am also a CFA but last 5 years i have been working in Predictive analytics and my core competency is statistics. I want to know that, does this experience will count after FRM.
Hello Anand, I guess your work experience may count. However, i think it is best to check with GARP on the same.
All the very best!
Dheeraj
Hi Dheeraj,
Currently Im preparing for actuarial exams and i have done my MBA in insurance and risk management,I am working as business analyst in IT consulting firm from last 6 months. Do you think FRM will help me to get a Job in Financial Risk Management Industry..? As i have completely unrelated work experience….
Regards
Ashish
Hi Ashish,
the answer to your question is a BIG YES!. please go ahead and take FRM exam, it will add lot of value to your profile.
Thanks,
Dheeraj
Hi Dheeraj,
Thanks for insight on FRM exam pattern and things we should consider before writing the exam. I am working as analyst in Derivatives and planning to write it in May-2016, is it okay if I start studying with 2014 Schweser material as latest one will come in next year Feb.
let me know your thoughts upon this. Thanks.
Yes Gaurav,
the curriculum does change a bit but normally the changes are not earth shattering. You can refer to your 2014 Schweser notes and make note of changes when they come with the new material.
all the very best for your FRM exam,
Dheeraj
I have a degree in actuarial science from Ghana and want to know how easy/ difficult it might be for
me as am coming from the production field.
Hi Sulley, if you are actuarial science student, then you will not find FRM to be very difficult.
All the very best,
Dheeraj
Hello Mr. Dheeraj
First of all, I would like to thank you and appreciate your effort for putting all of this information together. It is really useful for anyone who is getting prepared for FRM exams (I am also the one in that list for May 2016 :) ).
So actually I would like to know your opinion about how the FRM Certification is gonna help someone who works in a Software House which purely builds applications and models used in Valuation and Stress Testing for Loans Portfolios of a Bank. I know the concepts addressed in FRM’s curriculum are exactly what needed in Valuation and Risk Business but how is the market prospects for an FRM in a financial technology services providing company?
Thanks in advance for your time and support.
Regards
Noman
Email: syednoman84@hotmail.com
Hi Syed, Thanks!
I think FRM will surely help in terms of gaining knowledge for Risk Management and Stress testing in Banks. Given that Risk plays a very important role in Banks, I think it should play an equally important role in those servicing the banks like the Financial Tech companies. With this, I think FRM should be a great credential to acquire.
Best,
Dheeraj
Hi,
I am planning to give FRM I in May 2016,I am working as Relationship manager- Equity at HDFC Securities and has 1 year of experience. I want to know that, does this experience will count after FRM.
thanks.
Hi Khushbu,
I am not sure if this experience would count or not. The best way to check is to drop GARP a question on the same.
Best,
Dheeraj
Thanks for the info..May i know what are the works that are taken as 2 years work experience
Hi Sai, the key here is the “relevant work experience”. This implies those who are working in Banks, Treasury, Credit or taking care of Risk Management in their organization should be considered as relevant work experience.
i have cleared my ipcc exam of ca ….and i have already registered for frm part1 exam for november attempt also i have taken classes in edupristine choaching classes(video) i have a less knowledge about the quants…..sir can u tell me how i can well prepare for frm part 1 in a short period of time… i have the material of swcheccer and edupristine…sir please tell me how many hours i have to devote for frm part 1 exam
Hi Subham,
Unfortunatley, no short cuts to success here! You need to devote the number of hours required to go through the material first and atleast do one revision. Can’t be sure of how much time you may take in this process.
All the very best,
thanks,
Dheeraj
Hello Dheeraj,
I am planning to take on FRM level 1 in 2016 but I do not have any experience in Risk Management side. I am working on the Banking Operations with no knowledge of Financial Risk.
If i go through the GARP Books or Schweser Notes by myself. Will I be able to pass the exam as I could not find any tuition or coaching available. I have educational background of MBA Finance. I also intend to take up CFA but I have decided to take it after FRM.
Hi Riaz, if you are MBA Finance, then you will not have much problem with FRM. The GARP books and Schweser notes cover the curriculum extensively.
All the very best,
Dheeraj
Hi,
Could you please confirm if there are any good coaching centers for FRM ?
if yes, can you help with some names..
Also, I didnt understand about the passing criteria for this exam, can you help on this one as well..
Thanks Rohit
Hi Rohit, where are you looking for coaching – In india?
GARP doesn’t disclose any passing criteria. Just that you should ensure that you do fair in each sections. Overall Passing rate for Part 1 is around 50% (out of 100 students, around 50 pass the exam).
I would like to appreciate you for the help provided through this blog post. Can you guide me as to how difficult is FRM L1 compared to CFA L1 in terms of the preparation level required?
Hi Maarika,
It depends on your background. If you have an accounting background, then you may find CFA easier. If you have quant background, then you may find FRM L1 easier.
thanks,
Dheeraj
Thanks for the advice that you have provided through this article. It answers all my doubts I had regarding the FRM exam. Iam sure with this I will be able to plan out my studies for the exam in May really well :)
thakns Uttkarsh!
Please if you can let us know the most important topics we should concentrate for both levels of FRM?
Dear dheeraj
I work as a credit risk analyst. I wish to appear for both the levels together in may. Is it advisable or should I concentrate on one level at a time?
Hello Benson,
It totally depends on you only. If you have sufficient time for preparation, then you can go for both the levels at once. However, if you think that you may not have enough time to invest, my advise would be to take one level at a time.
Hope it helps.
Thanks,
Dheeraj
Dear Benson,
As a past FRM student who “did” attempt both levels at once, I do not recommend it.
As Dheeraj has rightly pointed out, this is not a college level exam and requires a lot of preparation. Also, the exam itself is exhausting for your brain and body. Imagine 8 hours of sitting stiffly and staying alert!
Yes, it is possible but why do it? you just have to wait 6 months for the next level and it can be covered at a decent pace.
Good luck!
Isana.
Hello Dheeraj
I am hoping to take the november exam, i am currently working as a quantitative analyst, will the FRM add any value to my role. i would also like to know how possible is it to pass the FRM with just the GARP notes and practice tests, as I see on most people recommend the schweser as thee best notes.
Thank you.
Hi, FRM will definitely add lot of value to your resume. It is possible to pass the FRM exam with just the GARP notes provided you have read and understood those thoroughly. Advantage of Schweser kind of notes is that they are great time savers and help you to focus on the important topics from examination point of view.
Eitherways, if you study and plan well, you should pass FRM exam!
All the best,
Dheeraj
Hi Dheeraj, Thanks for your valuable inputs on FRM. I am Working with a Bank as Credit Manager and I am not from Maths Background. I want to know whether my experience will be counted or not and How I can prepare for Quants Section?
If you are working as a credit manager, then i think your experience may count. Best is to seek guidance from GARP on this.
Also, preparing for Quant is not easy. Take access to GARP books as well as prep provider notes. Allocating more time to quant can help you a bit on this.
The article was very helpful. Thank you
i am in my 2nd year of graduation….can i appear for the exam?
Yes you can appear for FRM exam.
Thanks for your great articles, may I ask that I fail in part 1 in May and want to take it back in November, if I take the part 2 next year, if it need to pay the enrollment fee again?
No you don’t have to pay enrollment fees again.
I am working in a trade surveillance role at an investment bank under the compliance division . Will the frm certification help
Yes Anish, this FRM exam focuses on all kinds of risks including operational, credit and financial risks. Taking FRM will definitely boost your career.
i am undergraduate student and want to pursue for FRM course. so i need your opinion regarding what job should i do after my graduation that will be relevant experience for this course.
considering working for banks in the risk management division or as a credit analyst etc.
Awesome information on FRM sir.. but sir as in this competitive market what do you feel that, does FRM designation stands ahead of CFA or is it vice-a versa?
Hi Patricia, for a moment, let us forget about interests within Finance. If this is so, then CFA has a much wider appeal and global acceptance as compared to FRM.
Hi Sir,
Article was very helpful. I am currently working as a financial analyst and i am specialized in performing equity valuation of privately held companies. I am confused whether my experience will be counted for FRM or not.Please help
Hello Yash, you can try. I think your experience would get counted.
thanks,
Dheeraj
Great article! Please post most important Topics we should concentrate for both levels of FRM …
sure will writing this in another post.
I have completed the CFA Level 1 and Level 2 a year back. Now I am considering appearing for both levels of the FRM in November 2015 and was wondering how many study hours I should estimate. Will the CFA preparation help?
Hi Omkar, your CFA preparation may not help much here as FRM is all about Risk management and quantitative stuff. You may have to put anywhere between 150-200 hours for each FRM level.
thanks,
dheeraj
Thanks for this post. I have been following your blog from quiet sometime now and find it really interesting. So please continue doing this cz it really helps. I am now preparing for my FRM Part 1 November exam and want to know which would be the best financial calculator for the exam?
Hi Namit, many thanks.
The financial calculators permitted by GARP are Texas Instruments BA II Plus, Hewlett Packard 10B II,10B II+,20B and Hewlett Packard 12C. You may use either of them. I bought the Texas BA II and found that it was very easy in usage.
Thanks,
Dheeraj
Thank you Sir!
Thank you Namit!
Thank you Sir for this amazing article. My question is: What is the value of having both the CFA and the FRM?
Hello Sahil,
Apart from the knowledge in both the fields – Risk Management (through FRM) and Investment management (through CFA), its a great resume bullet point. It will be easier for you to get shortlists in the company of your choice.
All the very best,
Dheeraj
Many thanks for sharing such good information..I wish to pursue both CFA and FRM..Will it advisable to appear for CFA and FRM Level 1 simultaneously?
Hi Shrimay,
taking the exam simultaneously is technically possible as the exam dates don’t clash. However, I hope you understand that the efforts required would double up. If you are willing to go that extra mile to prepare for both the exams, nothing like it.
All the very best,
Dheeraj
I thoroughly enjoyed this extremely well equipped article about FRM. I am a huge fan of wallStreetMojo, and have found a place that will answer my questions. I have gone through all the articles on this site and found that all are superb in their own ways. Keep up the good work.
Thanks Amit. I am glad you like the FRM article. :-)
Super excellent,
very finely differentiated and presented. I hope very soon you will start a course that would be sub-FRM and it will cover all types of risks and its different Matrices of Modeling with practical examples.
Thanks for update !
Thakn you Arinjay!
Excellent Article Quite Insightfull
Thank you Neeraj :-)
Dheeraj,
Thanks for your wonderful article. I am FRM aspirant. I am working for UK’s largest bank as technology lead under Risk domain. My main responsibility involves delivering changes to BASEL III – Credit grading/decision application. Though i am not involved at risk model analysis, etc., but i have application knowledge as how whole things work together. Not sure whether this is appropriate knowledge to be considered for FRM?
Hello Noor,
Many thanks for the appreciation. Your experience on Basel III and risk application knowledge will definitely get counted!
All the very best for your FRM examination. When do you plan to take this?
Best,
Dheeraj
Hi, Thanks for the article. So informative. I am currently pursuing Chartered Accountancy Final level. How would FRM course add any value to a Chartered Accountant in terms of career opportunities?
Hi Tarun,
Most CA’s opt for CFA exam as both are complementary. Just that CFA is focussed for IB, Portfolio Mgmt, Asset Mgmt kind of roles. If you have very keen interest in FRM, then only should you opt for FRM.
Thanks for such interesting article. I am working in financial planning firm in backend role. Will CFA or FRM add any value in my career in future?
Not sure of if any of this will add value. If you are working for a financial planning firm, then CFP is the right exam to look at.
An Excellent article for anyone who wants to know about FRM!!!
My query is- I work in a non banking financial institution and my job involves performing basic analysis to clients creditworthiness like calculating some simple ratios and ensuring that they meet the lending criteria. Would basic analysis like this be considered as appropriate experience?
Hello Shreyans, thanks for your query. If you are involved in measuring the creditworthiness of the company, then you do have a relevant experience. Remember that FRM has one of the core topics as Credit Risk.
Best,
Dheeraj
Thanks for the great info. I was wondering if the CFA LEVEL 1 notes that i already have with me would suffice for the FRM exam 1 preparation and if yes, in which subjects.
Hello Shalmali,
CFA Level 1 notes are different from FRM notes in many ways. I think the best approach for you is to get teh FRM exam prep notes and study directly from the those.
Best,
Dheeraj