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CFA vs FRM
October 20, 2014 by Dheeraj Vaidya 39 Comments
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If you had to choose between the two CFA or FRM, which one will you take?
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Maybe CFA, maybe FRM or both? This is one of the most freqently asked
questions when students make up their mind to advance their careers in
Finance. Making the right choice is important because each of the
examination takes lot of hard work, money and ofcourse lot of time. The
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choice, however, is sometimesdifficult for those who are not aware of its key
differences.
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I was fortunate to pass both the CFA and FRM exams and was lucky to go
through the course details, benefits and nuances of both the examinations. In
About Dheeraj?
the past, I have mentored hundreds of students for CFA and FRM
examination and through this blog, i thought of preparing a quick guide on
CFA vs FRM that will help students make an informed choice.
To show you the key differences between CFA and FRM, i have created an
infographics that will help you make an informed choice.
Reading Time: 90 seconds
>> worked as JPMorgan
Equity Analyst, ex-CLSA
India Analyst >>edu
qualification - CFA
Charterholder, FRM
Charterholder, IIT Delhi,
IIML
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Pro Tip : CFA vs FRM
Broad vs Focussed - The key difference is that CFA curriculum
covers broad range of topics in Finance.However, FRM is a
specialized exam for gaining expertise in Risk Management.
Job Opportunities CFA is especially useful for those who want
to make a career in Investment Banking, Portfolio Management or
Financial Research. FRM opens up careers in Risk Management
in Banks, Treasury Department or Risk Assesments.
Passing Rates - Do not worry too much about the passing rates.
Both the exams CFA and FRM have a reasonable range of
passing rates (30-50%).
Competition - CFA exam has no direct competition from other
providers. If you want to really make a career in Invesmtent
Banking or Portfolio Management, then the choice of CFA is a no
brainer.FRM examination has a direct competition from PRM
(Professional Risk Manager). If you want to make a career in Risk
management, then you are spoilt for choices as you may want to
choose between the two exams FRM or PRM. My take is that
FRM is rather popular examination between the two and for a
newbie, it makes sense to appear for FRM exam first.
Examination Tips -CFA is slightly easier for students who have
an accounting background. CFA curriculum relies heavily on
Accounting Fundamentals. FRM examination on the other hand is
slightly easier for those who have a quantative background as
majority of foundation level topics are maths based.
So which one are you taking CFA vs
FRM exam?
If you have any questions/feedback on these examinations CFA or
FRM, please do drop a comment below
Filed Under: CFA, FRM
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Comments
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By Saurabh on October 20, 2014 at 10:32 am
Dear Sir,
Thanks for the article.You always impart such a valuable
knowledge to your readers.Sir, I want to know from you
why did you go for both CFA & FRM. I have passed CFA
level1 in June14, taking FRM Level1 in Nov14 and CFA
level2 in Jun15so I am expecting this question to me
from interviewer in placement.
Thanks in advance
Reply
By Saurabh on October 20, 2014 at 12:47 pm
And Sir, I forgot to mention that you are a great source
of inspiration to me..I have taken couple of financial
courses from you and enjoyed thoroughly..And after
that I took the decision of taking CFA & FRM both,
though I am not sure how both gonna benefit me
except knowledge.
Reply
By Prathmesh on October 20, 2014 at 11:08 am
Thank you Dheeraj for this wonderful comparison of CFA
and FRM. I look forward to more such articles on FRM
and CFA. Can you also elaborate on PRM exam vs FRM
exam.
Reply
By Wall Street Mojo on October 20, 2014 at 11:09 am
Thanks Prathmesh for the liking the article. I look
forward to writing about PRM and FRM exam in the
near future.
Best, Dheeraj
Reply
By V.S.ShanmugaSundaram on October 20, 2014 at 11:55 am
Dear Sir,
Many thanks for your complete explanation about the
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difference between CFA and FRM.Sir i want to know
difference between CERA(Chartered Enterprise Risk
Analyst) and FRM.Also if possible please tell us the
difference between Actuary with these CFA/FRM/PRM
sir.
Reply
By V.S.ShanmugaSundaram on October 20, 2014 at 11:56 am
Dear Sir,
Many thanks for your complete explanation about the
difference between CFA and FRM.Sir i want to know
difference between CERA(Chartered Enterprise Risk
Analyst) and FRM.Also if possible please tell us the
difference between Actuary with these CFA/FRM/sir.
Reply
By amandeep on October 21, 2014 at 1:15 am
Hi Dheeraj,
Ill be appearing for CFA Level 2 in June 2015, I plan to
have a career in Hedge Funds. I already possess a
Mechanical Engineering, an MBA and CMA but my work
experience background has been mainly manufacturing
based. I would like to find an entry level position in any
hedge fund.
Do you think I should opt for FRM too along with my
ongoing CFA. Will it add any value or not specifically
focussed towards entering hedge funds.
I plan to some how find an internship in any leading
hedge fund so that I can get some valuable relevant work
experience.
Kindly guide me in this regard.
Thanks
Amandeep
Reply
By Wall Street Mojo on October 21, 2014 at 10:31 am
Hey Amandeep,
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If you are planning to make a career in Hedge Funds,
then FRM is going to make lot of sense. FRM
provides deep insights on risks, fixed income and
using derivatives to manage risks. Hedge funds use
lot of analytics and deep drills of such aspects in their
portfolio for arbitrage opportunities and manage
returns. My take is that if you could manage FRM
along with CFA, then this will be an optimal
combination for your career growth.
Thanks,
Dheeraj
Reply
By Rohit on October 21, 2014 at 10:15 am
thank you for this article. I am planning to give CFA Level
1 in June. Do you offer any CFA trainings?
Reply
By mahendra edunoori on October 21, 2014 at 11:41 am
thank you for sharing your knowledge. now i understood
exactly difference between both these exams.
and even i am planning to do. but its difficult to clear, so
thats why i am waiting for a right time.
and please can you advice me on CFA course, that how
to study????????????
Reply
By Nitin on October 27, 2014 at 5:36 pm
Awesome Article and valuable Knowledge. Thanks for
same , you made it so easy.
Reply
By Tejus Gadiya on November 10, 2014 at 9:37 pm
Dear Sir,
Thank you for the article posted above. I am currently
working in the Risk Management Department of one of
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the top five Business Process Management Company. I
do process Audits in that company. I want to make a
career in Internal Audit / Risk Management. My long term
goal is to work as Risk Manager in a Banking or a
Finance Company. I am a Chartered Accountant by
Profession and also pursuing Certified Internal Auditor
conducted by IIA. And since I want to work in a specific
industry I was thinking of doing CFA until I came across
this course of FRM. I am now confused about whether I
should do CFA or FRM.
Considering the above and the situation I am in, pls guide
me through this and help me arrive at a decision.
Thank you
Regards
Tejus Gadiya,
Reply
By Dheeraj on November 14, 2014 at 12:46 pm
Hi Tejus, sorry for the late reply. Since you have been
already working in Risk Management and audit, i
think FRM makes more sense for you. CFA is
generalized and may not help you in building a risk
management career. Also, you can also consider
taking PRM exam (professional risk manager).
Reply
By Sriram Balasubramaniam on November 24, 2014 at 9:38 pm
excellent analysis!
Reply
By Yi on November 28, 2014 at 5:22 am
Hi Dheeraj,
Thank you so much for your post here! My backgroud is a
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mathematics student. Now I am a second year statistics
PhD student. My current research is about building
predictive models and finding relations in dataset.
Actually, I took CFA I about two years ago, and I failed. At
that time, I take it just because my classmates from the
math department took it. And I almost did not prepared for
it. But honestly speaking, I have zero finance or
economics backgroud, and I found difficulties in the
accounting and economics part of that exam. I think this
must because I havent spent any time or took any course
in the college.
However, I have confidence in my math skill, and I am
sure(but know almost nothing in detail) math and statistics
have a lot applications in finance. And now I really want to
be prepared to work in the finance area after graduation,
with what I have learned in the school.
So my question is, based on my experience:
Should I take FRM[and choose the risk management
career(I dont have any preference on which section of
finance I like to work with. But I should concentrate on
one anyway(am I right?)), because this is more easy for
math student(am I right?)]
Or should I take CFA(again), because these(accounting
and economics) are basic for working in finance area, and
I cannot avoid them to take FRM because I failed once
and am a little afraid of CFA now.
BTW, I only have 3 years to graduate, and I dont think I
could handle both of them before my graduation.
Thank you so much for your help!
Happy thanksgiving!
Yi Li
Reply
By Dheeraj on November 28, 2014 at 2:22 pm
Hello Yi,
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Happy Thanksgiving!
Based on your background in mathematics & statistics
and in addition, your current research in predictive
modeling, I feel that FRM is best suited for you!
FRM involves lot of risk modeling that will use lots of
quantitative modeling and those who are good at
maths find it easy to digest the concepts and are able
apply it correctly. I am sure your rich background in
this will be an asset to you if you look at Financial
Risk Management.
Hope this helps.
Thanks,
Dheeraj
Reply
By Ganesh on November 29, 2014 at 9:26 am
hii dheeraj,
Im working in biggest bank in India since 4 years. I have
got CFPCM and also Im CAIIB. Im planning to go for
CFA but since Im Science graduate, do you think I will be
able to clear it? Is accounting background necessary for
completing CFA?
Thank you
Reply
By ganesh bhalerao on November 29, 2014 at 11:53 am
Hi dheeraj,
Im working in indias biggest bank since 4 years. I have
completed cfp n caiib. Im planning to go for cfa. Since Im
science graduate will it be possible for me to clear ca? Is
accounting background is necessary for cfa?
Than u
Reply
By Hitesh Gurnani on December 15, 2014 at 9:04 pm
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Hi Dheeraj,
Thanks for a wonderful article.
I need some info. regarding The Certified International
Investment Analyst (CIIA) in comparison to CFA and
FRM.
I am a BCom Graduate and currently working in
Operations team of GlobeOp Financial Services and have
an experience of more than 2 years in Finance operations
with BNY Mellon.
I am confused between CFA, FRM, CAIA and CIIA.
Which would be the best 1 to go ahead with..?
Appreciate your help on this.
Thanks and Regards,
Hitesh.
Reply
By d.kaushik on December 16, 2014 at 5:55 pm
Dear Dheeraj,
Im an ACCA finalist from Bangladesh currently working in
an asset management company. My job responsibilities
there focuses on Operations, Compliance and Fund
accounting. However I want to focus on operations and
research both. After going through a lengthy professional
qualification like ACCA Im a bit worried to opt for another
one which could be value adding to my career.
Which could be better for me? Doing CFA or FRM ?
Reply
By Komal on December 19, 2014 at 10:32 am
Hi.. I read your article and this is really helpful.. I have
appeared for CFA Dec level 1 2014 third time.. Im waiting
for the result, however I wanna keep another option of
FRM open if I wont clear. Im commerce graduate and
MBA (finance). Not clearing in multiple attempts would
affect my profile as an Analyst ? or I should opt for some
other career option.. Please help..
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Reply
By Kasey on December 30, 2014 at 10:04 am
Dear Dheeraj,
If I am to pursue a career in Transaction Advisory Services
in Big4 chartered accountancy firms, will it make more
sense to undertake FRM? For your information, I am a full
member of CPA Australia and had been working in the
external audit field for approximately 4.5 years. Doing
FRM now is just to enhance my knowledge as well as my
CV. Kindly advise.
Best regards,
Kasey
Reply
By M Muralidhar on December 31, 2014 at 11:05 pm
Hi Dheeraj,
that was really helpful..
I am Currently working in Trade Finance Dept. in a PSU.
previously I was in treasury as a Bond Dealer for three
years. I am an engineering graduate but Am into this field,
trying to making a career in finance. So considering my
experience as a dealer in Treasury, what would be good
for me.. CFA or FRM or an MBA or any other courses?
I badly need some guidance on this as my career has just
begun and I have a long way to go.
Awaiting your help on this.
Thanks and Regards,
and
Wish you all a Very Happy New Year !! Rock ON !!!
Reply
By Dheeraj on February 3, 2015 at 6:38 pm
Hello Muralidhar, I am sorry for such a late reply. With
your background in Trade Finance and also as a
Bond Dealer, I think FRM suits you more. CFA is
more for people interested in stock research or
Investment Banking. All the best!
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Reply
By imran on January 5, 2015 at 8:04 pm
Very much relevant article especially for those who are still
in between cfa and frm.
Reply
By Dheeraj on February 3, 2015 at 6:35 pm
thanks Imran for the appreciation
Reply
By Nikhil Bajaj on January 27, 2015 at 1:58 pm
Hello Dheeraj,
I have completed my BBA in finance in 2014. I love to
study finance and to make my career in the same.
I want to ask, is it a good idea to prepare and clear CFA
level 1 and 2 and then go for work experience or should I
just take a job and study for the same.
(I have read that job that has a CFA relevant work
experience is given only after completion of level 2)
Reply
By Dheeraj on February 3, 2015 at 6:33 pm
Hello Nikhil, normally a candidate may take 3 years
minimum to pass all three levels. It is advised to take
up a job and prepare for CFA in tandem. The
curriculum for CFA is not so demanding that it cant
be done along with the job. I think if i were you, i
would have taken a job and studied for CFA
simultaneously. Hope this helps.
Reply
By Kevin on January 28, 2015 at 2:41 am
Thanks a lot for this amazing comparison, and i can still
use your advices:
So i have a PhD in physics and i am an actuary, i am
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currently working as quantitative ALM analyst at AXA.
I wanted to add (CFA or FRM) for career and personal
developpement. What do you think is the most suitable for
me?
Best regards
Reply
By Dheeraj on February 3, 2015 at 6:31 pm
Hello Kevin, since you are working in actuaries and
are more in quantitative profiles, i think FRM is best
suited for you as it is focusses on risk aspects and
requires a solid understanding of quantitative
concepts.
Reply
By Utsavkhemka on January 29, 2015 at 3:38 pm
Hi .. I am through with CA. I had given cfa lvl 1 in dec 14
and cud not clear. I wud like to know if frm will provide job
opportunities abroad? If it will add on to my ca degree? If
the pay will be near by as that of a cfa? Shud i pursue frm
or some other course with ca?
Reply
By SHrabanti Das on February 5, 2015 at 1:00 pm
Hi, I have done my MBA in finance 2014 from tier II B
School. From campus I got recruited to a captive
(banking) IT company as BA. I am planning to appear
for CFA and later in November FRM . But I am not
sure my Job opportunity after that . Since I like to be
in finance sector but I am gathering my experience in
Captive IT. Will these certification going to help ?
Reply
By Parag Kapur on February 4, 2015 at 10:29 am
Thank you Dheeraj for such a wonderful comparison..
Im planning to give CFA exams mid this year..Is CAIA be
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a good career choice with CFA..?
Reply
By Shrabanti Das on February 5, 2015 at 3:11 pm
Hi, I have done my MBA in finance 2014 from tier II B
School. From campus I got recruited to a captive
(banking) IT company as BA. I am planning to appear for
CFA and later in November FRM . But I am not sure my
Job opportunity after that . Since I like to be in finance
sector but I am gathering my experience in Captive IT.
Will these certification going to help ?
Reply
By Gautham on February 12, 2015 at 5:52 pm
Assuming a person has no special love for either of them
,Which certification is likely to pay more for a fresher ?
Reply
By Dheeraj on February 16, 2015 at 10:51 am
In that case, go for CFA as it broad and opens up a lot
many career options in Finance.
Reply
By Neeta Ramsinghani on February 20, 2015 at 10:38 am
Dear Sir
I am non commerce background student and very bad in
probability can I do CFA or frm ?
Reply
By Maha on March 12, 2015 at 1:21 am
Hi Deeraj,
Im very confused about which exam to take up
CFA/FRM. Let me give you a small introduction on my
background. Ive done my Masters in Finance with a
specialization in Corporate Finance and later worked at
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HSBC Analytics as a Risk Analyst for around 1.5 years.
Im actively looking for job opportunities currently in
Analytics but it need not necessarily be risk. Meanwhile I
want to prepare for these exams and improve my skills.
What do you think would be the best option for me
between the two?
Reply
By pratiksha kharat on March 13, 2015 at 11:32 am
hey sir,
I am pratiksha. I am looking forward for CFA & FRM. so
please tel me abt ths as well as i m looking for mba in
finance. so which one is much better?
Reply
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