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 CFA. 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 in near future and what aligns better with the career goals that 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.
What is PRM?
Professional Risk Management is one of the best risk management courses in the world organized by PRMIA. It has an international repute and it has students from 100 countries. So 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 actually 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 in a different manner. If you don’t have a bachelor’s degree, you will still be able to 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 in the world, 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 till 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 along with 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 in portfolio management, investment banking, financial analysis, advance 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 Summary
|Certifications organized by||Professional Risk Management (PRM) is one of the most sought after risk certification courses in the world. It’s being recognized by The Professional Risk Managers’ International Association (PRMIA).||CFA is organized by CFA Institute. CFA Institutes has offices in US, Europe and Asia-Pacific region and has more than 500 employees all over the world.|
|Number of levels||To be able to clear PRM exam, you need to go through four exams, you can say four levels. These four exams focus on both the theory and practical part of risk management.||CFA is one of the hardest financial credentials you can get in the world. It has three levels to get through before you will be considered as CFA.|
|Mode/Duration of exam||The first two exams are of 2 hours duration and the last two are of 3 hours and 1 hour respectively. The numbers of questions you need to answer in these four exams are 36 (1st Exam), 24 (2nd Exam), 60 (3rd Exam) and 24 (4th Exam) respectively.||As CFA has three levels to complete the duration of the exam is significantly longer. Every exam is of 6 hours duration.|
|Exam Window||There are four exam windows when you can sit for exams.They’re:-|
February 20 - March 17, 2017
May 22 - June 16, 2017
August 14 - September 8, 2017
November 20 - December 22, 2017
February 19, 2018 - March 16, 2018
May 28, 2018 - June 22, 2018
August 20, 2018 - September 14, 2018
November 19, 2018 - December 21, 2018
|The first level of CFA is significantly easier. You can take it either in June or in December of any year. Whereas, for other two levels (2nd & 3rd Level), you need to sit for the exam in June, every year.|
|Subjects||There are four exams and for these four exams, you need to study four subjects. They are in order of exam – |
Finance Theory, Financial Instruments & Markets
Mathematical Foundation of Risk Management
Risk Management Practices
Case Studies, PRMIA Standards of Best Practice, Conducts and Ethics, Bylaws
|The subjects for CFAs are as follows. Remember, the focus of these subjects in each level is different.
Ethical and Professional Standards
Financial Reporting and Analysis
|Pass Percentages||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 2015, the first percentage for CFA level-1, level-2 and level-3 are 42.5%, 46% and 58% respectively.
In 2016, the first percentage for CFA level-1, level-2 and level-3 are 43%, 46% and 54% respectively.
|Fees||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 $1400
|CFA 2017 Exam Registration Fees and Deadlines
Enrollment Fee - Total:- US$ 450
Standard registration fee - Total:- US$ 930
Late registration fee - Total:- US$ 1,380
|Job opportunities/ Job titles||Once you successfully 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 of the positions at which PRM students have been placed successfully after completing their PRM exam.||For CFA, there are many opportunities. According to a study conducted by CFA institute it’s being seen that after the completion of CFA, the top 5 job titles are Portfolio Manager (23%), Chief Executive (7%), Consultant (7%), Risk Managers (6%) and Corporate Financial Analyst (5%).|
#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 in the world and there’s more than one lakh CFA member. 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 get an entry. 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, you need to pay US $500-$1000, which means, for the total course, you need to pay around US $1500-$3000. In the case of PRM, the fees are much lesser. For four exams and the PRM handbook, the fees are in the range of US $1100-$1250.
|PRM Exam Voucher Bundle||Price|
|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, you have only 4 exams to clear and all are multiple-choice questions. 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
Following table showcases the details of PRM exams:
|Exam||Exam Name||No. of Questions||Time Allowed|
|I||Finance Theory, Financial Instruments, and Markets||36||2 hours|
|II||Mathematical Foundations of Risk Measurement||24||2 hours|
|III||Risk Management Practices||60||3 hours|
|IV||Case Studies, PRMIA Standards of Best Practice, Conduct and Ethics, Bylaws||24||1 hour|
Below is the CFA® Topic Areas in each level.
#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 2015, the first percentage for CFA level-1, level-2 and level-3 are 42.5%, 46% and 58% respectively.
CFA® Level 1 Exam Passing rate is closer to 40%
CFA® Level 2 Exam Passing rate is closer to 44%
You have a 50:50 chance of passing CFA® Level 3 Exam
#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 successfully 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 of the positions at which PRM students have been placed successfully after completing their PRM exam.
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%)
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 go for 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 so systematic and convenient approach.
Why pursue CFA?
- You should know that CFA is not the course for everyone, especially those, who have faint of heart. CFA needs deliberate study and willingness to go the extra mile. Moreover, you need to study all subjects from the beginning; yes the approach would be different at each level. But the very toughness of this program helps to pierce the noise and creates credibility.
- CFA is for those who believe in compound interest. As you would be in the investment domain, you will not earn a lot of money immediately. But if you persevere and invest in investments (your domain), eventually, you would earn much more than anybody else in the finance domain.
- Pursuing CFA is an achievement. There’s the reason why it has so much of international repute and why members from 135 countries have enrolled for the course. The reason is preparing its students for excellence. If you want a quick fix or magic bullet, CFA is not for you. But if you believe in steady progress in a reasonable time, you should go for CFA.
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 –