What should be chosen as career path CFA or FRM

Both Chartered Financial Analyst (CFA) and Financial Risk Management holds distinct positions in the market. Despite the fact that difficulty nand course material are quite similar, but both promise different career paths and nature of the jobs in industry. I hope an over vziew of the exams content, passing criteria and jobs in the market will help analyzing differences between the two.

Exams

CFA; comprises three levels composed of five areas namely,

1. Ethical and Professional standards

2. Investment Tools

3. Asset Classes

4. Portfolio Management &

5. Alternative Investment

The above five areas cover a range of topics which are tested rigorously in all of the levels.

Topic Area Level 1 Level II Level III
Ethical and Professional Standards (total) 15 10 10
Quantitative Methods 12 5-10 0
Economics 10 5-10 0
Financial Reporting and Analysis 20 15-25 0
Corporate Finance 8 5-15 0
Investment Tools (total) 50 30-60 0
Equity Investments 10 20-30 5-15
Fixed Income 12 5-15 10-20
Derivatives 5 5-15 5-15
Alternative Investments 3 5-15 5-15
Asset Classes (total) 30 35-75 35-45
Portfolio Management and Wealth Planning (total) 5 5-15 45-55

Total

 100 100 100

 

Exams are held in June for Level 2 & 3, while level 1 exams are held in June and December each year

FRM; administered by Global Association of Risk Professionals (GARP) and focuses on niche field of Risk Management. Areas / topics covered are;

  • Foundations of risk management
  • Quantitative analysis
  • Financial markets and products
  • Valuation and risk models
  • Market risk measurement and management
  • Credit risk measurement and management
  • Operational and integrated risk management
  • Risk management in investment management
  • Current issues in financial markets

Career Path

CFA

  1. Portfolio Manager
  2. Research Analyst
  3. Chief Executive
  4. Consultant
  5. Relationship Manager, Sales + Marketing
  6. Risk Manager
  7. Financial Advisor
  8. Corporate Financial Analyst
  9. Investment Banking Analyst

FRM

  1. Chief Risk Officer
  2. Senior Risk Analyst
  3. Head of Operational Risk
  4. Investment Risk Management