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CFA vs FRM - Which is better? | WallstreetMojo.com

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CFA vs FRMOctober 20, 2014 by Dheeraj Vaidya 39 Comments

If you had to choose between the two CFA or FRM, which one will you take?

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 choice, however, is sometimes difficult for those who are not aware of its key differences.

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 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

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About Dheeraj?

>> worked as JPMorgan Equity Analyst, ex-CLSA India Analyst >>edu qualification - CFA Charterholder, FRM Charterholder, IIT Delhi, IIML >>This is my personal blog that aims to help students and professionals become awesome in Financial Analysis. Here, I share secrets about the best ways to analyze Stocks, buzzing IPOs, M&As, Private Equity, Startups, Valuations and

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Pro Tip : CFA vs FRMBroad 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

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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

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

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

Thanks Prathmesh for the liking the article. I look forward to writing about PRM and FRM exam in the near future.

Best, Dheeraj

Reply

Dear Sir, Many thanks for your complete explanation about the

By Saurabh on October 20, 2014 at 10:32 am

By Saurabh on October 20, 2014 at 12:47 pm

By Prathmesh on October 20, 2014 at 11:08 am

By Wall Street Mojo on October 20, 2014 at 11:09 am

By V.S.ShanmugaSundaram on October 20, 2014 at 11:55 am

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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

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

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

Hey Amandeep,

By V.S.ShanmugaSundaram on October 20, 2014 at 11:56 am

By amandeep on October 21, 2014 at 1:15 am

By Wall Street Mojo on October 21, 2014 at 10:31 am

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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

thank you for this article. I am planning to give CFA Level 1 in June. Do you offer any CFA trainings?

Reply

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

Awesome Article and valuable Knowledge. Thanks for same , you made it so easy.

Reply

Dear Sir, Thank you for the article posted above. I am currently working in the Risk Management Department of one of

By Rohit on October 21, 2014 at 10:15 am

By mahendra edunoori on October 21, 2014 at 11:41 am

By Nitin on October 27, 2014 at 5:36 pm

By Tejus Gadiya on November 10, 2014 at 9:37 pm




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

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

excellent analysis!

Reply

Hi Dheeraj,

Thank you so much for your post here! My backgroud is a

By Dheeraj on November 14, 2014 at 12:46 pm

By Sriram Balasubramaniam on November 24, 2014 at 9:38 pm

By Yi on November 28, 2014 at 5:22 am




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

Hello Yi, By Dheeraj on November 28, 2014 at 2:22 pm

http://www.wallstreetmojo.com/cfa-vs-frm/?replytocom=21841#respond



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

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

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 Ganesh on November 29, 2014 at 9:26 am

By ganesh bhalerao on November 29, 2014 at 11:53 am

By Hitesh Gurnani on December 15, 2014 at 9:04 pm




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

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

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..

By d.kaushik on December 16, 2014 at 5:55 pm

By Komal on December 19, 2014 at 10:32 am

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Reply

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

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

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!

By Kasey on December 30, 2014 at 10:04 am

By M Muralidhar on December 31, 2014 at 11:05 pm

By Dheeraj on February 3, 2015 at 6:38 pm




Reply

Very much relevant article especially for those who are still in between cfa and frm.

Reply

thanks Imran for the appreciation

Reply

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

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

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

By imran on January 5, 2015 at 8:04 pm


By Nikhil Bajaj on January 27, 2015 at 1:58 pm


By Kevin on January 28, 2015 at 2:41 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

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

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

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

Thank you Dheeraj for such a wonderful comparison.. Im planning to give CFA exams mid this year..Is CAIA be


By Utsavkhemka on January 29, 2015 at 3:38 pm

By SHrabanti Das on February 5, 2015 at 1:00 pm

By Parag Kapur on February 4, 2015 at 10:29 am




a good career choice with CFA..?

Reply

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

Assuming a person has no special love for either of them ,Which certification is likely to pay more for a fresher ?

Reply

In that case, go for CFA as it broad and opens up a lot many career options in Finance.

Reply

Dear Sir I am non commerce background student and very bad in probability can I do CFA or frm ?

Reply

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

By Shrabanti Das on February 5, 2015 at 3:11 pm

By Gautham on February 12, 2015 at 5:52 pm

By Dheeraj on February 16, 2015 at 10:51 am

By Neeta Ramsinghani on February 20, 2015 at 10:38 am

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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

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

By pratiksha kharat on March 13, 2015 at 11:32 am

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