PRM vs CFA

Difference Between PRM and CFA

If you’re a student or a professional in the finance domain, you would know that there can’t be any comparison between PRM vs. CFACFAThe Chartered Financial Analyst (CFA®) Program offers a graduate-level curriculum and examination program designed to expand your working knowledge and practical skills related to investment decision-making. read more. Both courses are different and have different scopes and opportunities. But what gets stuck in between is the decision of what to take for a better prospect shortly and what aligns better with the career goals you seem to have.

In this article, we will help you decide which course is for you. If you would like to go for the investment world and thrive in the field, CFA is the best option without any doubt. But if you would like to explore the field of risk management, PRM would be the right choice.

In this article, we will articulate everything in detail. You will get to know every nuts and bolt of CFA and PRM so that you can make an informed decision.

PRM-vs-CFA

You are free to use this image on your website, templates etc, Please provide us with an attribution linkHow to Provide Attribution?Article Link to be Hyperlinked
For eg:
Source: PRM vs CFA (wallstreetmojo.com)

What is PRM?

Professional Risk Management is one of the best risk management courses in the world, organized by PRMIA. It has an international reputation, and it has students from 100 countries. Doing this course will add tremendous value to your professional life, and you will have much needed global exposure in your domain of study.

  • Once you complete this certification, you will have a graduate-level risk management credential. PRM program is a series of evaluation exams designed for professional risk managers all over the world. It has more relevance as it includes both theory and practicality in its curriculum.
  • The best part of PRM is it opens for people who have a passion for learning both on the job and off the job. Thus, the eligibility criteria are set differently. If you don’t have a bachelor’s degree, you will still do the course. The only thing is you need to have 4 years of work experience. If you have a bachelor’s degree, you need 2 years of work experience. But if you have already completed your MBA or MSF or MQF or CFA, you don’t need to have any experience requirement to join the course.

What is CFA?

CFA is one of the toughest programs globally, so you can imagine that it’s not for the faint of heart. Students who would like to thrive in the investment domain can join this course.

  • CFA has a great international reach. Students from more than 135 countries have enrolled in this program until now. What’s astounding is the number of members CFA institute has till now – 134,762.
  • The best part of CFA is that you can work as you pursue your course. You don’t need to worry about course completion to get a job as you can do CFA and a job on the side. This will help you approach your work better and will allow you to learn the course better as well.
  • CFA is a very comprehensive course. Thus once you complete the course, you will be treated as an expert in the investment field. You would also have good knowledge of portfolio management, investment banking, financial analysis, advanced investment analysis, etc.

PRM vs. CFA Infographics

Let’s understand the difference between these two streams with the help of this PRM vs. CFA ® Infographics.

PRM-vs-CFA-infographics

You are free to use this image on your website, templates etc, Please provide us with an attribution linkHow to Provide Attribution?Article Link to be Hyperlinked
For eg:
Source: PRM vs CFA (wallstreetmojo.com)

PRM vs. CFA – Comparative Table

SectionPRM CFA
Organizing BodyThe exams are managed and controlled by the Professional Risk Managers’ International Association (PRMIA), USAThe exams are managed and controlled by the CFA Institute, USA.
PatternIn 2019, PRM shifted to a 2-exam

  • Exam 1 (akin to Exam I and II of 2015 PRM exams)
  • Exam 2 (akin to Exam III and IV of 2015 PRM exams)
The CFA course is divided into 3 sequential levels

  • Level I
  • Level II
  • Level III
Duration of CourseThe candidates have to complete all the parts in 3 years or within 2 years from passing the first part.The candidates can complete the course in 4 years if they are able to clear all the levels in their first attempt.
SyllabusThe syllabus primarily includes the following topics

  • Financial Markets
  • Credit Risk & Counterparty Credit Risk
  • Risk Management Frameworks & Operational Risk
  • Asset Liability Management
  • Mathematical Foundations of Risk Measurement
  • Funds Transfer Pricing
  • PRMIA Standards and Governance
The syllabus primarily includes the following topics

  • Economics
  • Financial Reporting and Analysis
  • Quantitative Methods
  • Ethics & Professional Standards
  • Portfolio Management
  • Corporate Finance
  • Alternative Investments
  • Derivatives
  • Equity Investments
  • Fixed Income
Exam FeesThe total cost of the course comes to be $1,430, which includes an application fee of $150 and a membership fee of $200 along with the program fee of $1,080.The total cost of the course comes to be in the range of $2,550 to $3,450, which includes an enrollment fee of $450 along with the exam fees that vary based on the time of registration.
JobsSome of the common profiles include

  • Risk Officer
  • Investment Risk Manager
  • Predictive Analyst
  • Risk Analyst
Some of the common profiles include

  • Strategic Analyst
  • Wealth Manager
  • Portfolio Manager
  • Investment Analyst
  • Financial Consultant
DifficultyThe difficulty level of the exams is moderate as reflected from the historical overall pass rate of 65%, while the pass rates of the individual exams vary in the range of 59% to 78%.The difficulty level is high and only 10% of the candidates can clear all three levels. The pass rates of Level I, Level II, and Level III for the exams conducted in June 2019 were 41%, 44%, and 56% respectively.
Exam dateThe upcoming exams for the year 2021 are scheduled to take place as follows

  • February 15 – March 12
  • May 24 – June 18
  • August 16 – September 10
  • November 15 – December 18
The upcoming exams for the year 2021 are scheduled to take place as follows

  • Level I: February 16 – March 01, May 18-24, August 24-30, November 16-22
  • Level II: May 25 – June 01, August 31 – September 04
  • Level III: May 25 – June 01, November 23-25

Key Differences 

#1 – International Reach:

Both these courses are of international repute. But CFA is a more popular and more global impact than PRM. CFA has students from 135 countries globally, and there are more than one lakh CFA members. Whereas PRM has students in 100 countries. Though the scope of these courses is different, still the global reach has a lot to do with impact and job prospects.

#2 – Eligibility Criteria:

As far as eligibility is concerned, CFA has a different criterion than PRM. If you have a bachelor’s degree or equivalent, you can sit for CFA. But this is not the case of PRM. There are three possible benchmarks PRM has set for its aspiring students. First, if you don’t have a bachelor’s degree, you need to have 4 years of work experience to enter. Second, if you have a bachelor’s degree, you need 2 years of work experience. Third, if you have MBA/CFA/MSF or equivalent qualification, you don’t need to have any work experience; you can get an entry to PRM directly. The criteria of PRM allow students of all sorts to get an entry to the PRM course. Whereas for CFA, without a bachelor’s degree, you can’t get in.

#3 – Fees:

There’s a significant difference between the fees of PRM and CFA. For each level of CFA, the candidates need to pay $700 to $1,000 depending on the time of registration, plus the enrollment fees of $450. Hence, the total cost of the CFA qualification comes to be around $2,550-$3,450. On the other hand, the cost of the PRM qualification is much lower at $1,430, which includes the program fee, application fee, and membership fee.

PRM Exam Voucher BundlePrice
4 PRM Exam Vouchers + Digital PRM Handbook$1100
4 PRM Exam Vouchers + Printed PRM Handbook$1200*
4 PRM Exam Vouchers + Digital + Printed PRM Handbook$1250*

*plus shipping charges, which vary by geographic location

#4 – Comprehensive approach and applicability:

If we look at these two courses in terms of comprehensiveness, CFA stands out. Because if you want to pass the exam, you need to go for in-depth study, and surface-level knowledge won’t help. But in the case of PRM, the candidates have to clear only 2 exams and all are multiple-choice questions (MCQs). Thus, CFA has a more comprehensive approach in their curriculum than PRM. But in the case of applicability, CFA and PRM both are the best courses in their domain of study.

Topic Areas / Weights 
PRM

The following table showcases the details of PRM exams:

ExamExam NameNo. of Questions
IFinance Theory17
Financial Instruments14
Financial Markets16
Mathematical Foundations of Risk Measurement13
 
IIRisk Management Frameworks & Operational Risk23
Credit Risk & Counterparty Credit Risk20
Market Risk, Asset Liability Management & Funds Transfer Pricing17
PRMIA Standards & Governance4
Case Study Practicum20
CFA

Below are the CFA® Topic Areas in each level.

CFA Exam Topic Weights

#5 – Pass Percentages: 

Let’s have a look at the passing percentages of PRM students. 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%. In 2019, the pass rate of Level I, Level II, and Level III exams were 41%, 44%, and 56% respectively.

CFA® Level 1 Exam Passing rate is closer to 40%
CFA Level 1 exam pass rate
CFA® Level 2 Exam Passing rate is closer to 44%
CFA Level 2 exam pass rate
You have a 50:50 chance of passing the CFA® Level 3 Exam
CFA Level 3 exam pass rate

#6 – Job opportunities: 

Of course, both of these courses are world-class. But if we compare these two courses, CFA is better of these two in terms of job opportunities. Yes, the comparison won’t be on a similar measuring grid, and the approach of study and exam is also different. But if a student wants to go for a course for the perspective of job-opportunities, then CFA will yield more benefits for the student than PRM. That doesn’t mean you shouldn’t go for PRM. As CFA has more appeal and more popularity, naturally, it stands out.

Once you complete your PRM, the opportunities are plenty. You don’t need to worry about getting placed. Have a look at the opportunities available after you complete your PRM exam. This is a glance at the positions at which PRM students have been placed successfully after completing their PRM exam.

faq_prm_jobs1

source: https://www.prmia.org/faq/prm#prm5

For CFA, there are many opportunities. A recent survey by the CFA® Institute noted that the CFA® Charterholders are primarily working as Portfolio Managers (22%), Research Analysts (14%), and Chief Executives (7%)

CFA Charterholders Job Profile

source – CFA® Institute

Why pursue PRM?

The first most important reason that you should pursue PRM is its brand value and international recognition. It stands out in the risk management profession because the top-notch universities also encourage their students to PRM.

  • PRM is easy to complete. Of course, you need to study and understand the subjects. But you would agree that handling 4 subjects and handling 10+ subjects are not similar. Moreover, every exam that you need to go through in PRM has only multiple-choice questions.
  • To get certified by an international brand needs thousands of dollars. But to pursue PRM, you need to pay anything between the US $1100-$1250, and that’s it. You can give all four exams and will also receive a PRM handbook.
  • You only need two years to pass all the four exams. Meaning, you have six months for one subject. If you study hard and work on your improvement areas, PRM would be easier for you. Very few courses in the world have such a systematic and convenient approach.

Why pursue CFA?

Conclusion

The idea is not to choose something over others. But the idea is of alignment. After reading everything, the option which seems true to your heart and career aspiration, go for it. It would most probably be the right choice.

This has been a guide to a PRM vs. CFA. Here we discuss the top differences between PRM and CFA along with infographics and comparative table. You may also have a look at the following articles –

Reader Interactions

Comments

  1. Andrew Lamport says

    Very informative knowledge you have shared. This information is really very useful for students and for professionals in Finance domain like u said. I would like to know when I can go for PRM Exam. Is there any particular time period to sit for PRM EXAM?

    • Dheeraj Vaidya says

      Thanks for the appreciation. I am glad this was useful to you. Earlier PRM Exam used to be on-demand exam taking but from January 2014, Exams are offered at fixed intervals for the whole year. There are no fixed orders for exam. You can take exams on different date or months; you can either take all exams on same day. Also, you can take this exam in any order over a period of up to 2 years. I hope this information will help you. Thanks

  2. Gerardo Lenon says

    Thanks for this great analysis between PRM and CFA. I was just searching for PRM exam. If you could guide me about PRM Exam I mean what are the important roles, how to clear this exam easily? Is there any study guide on PRM Exam?