Focus on the FRM (Financial Risk Manager)
The Global Association of Risk Professionals (GARP) has developed the FRM (Financial Risk Manager®) program, which is the most prestigious certification for risk management professionals (46 of the world's 50 largest banks have a significant number of their employees FRM certified). It specializes in risk management and modeling.
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FRM: a two-part certification
The FRM is divided into 2 parts (Part I, Part II). Parts I and II of the FRM exam are held on the same date, with 2 sessions per year, in August and November. Candidates have the option of taking both parts in the same session: Part 1 in the morning and Part 2 in the afternoon. A minimum of 275 hours of work per "Part" is often recommended.
FRM Part I :
The FRM Part I can be taken at two different times during the year and consists of 100 multiple-choice questions. Part I is always offered in the morning (unlike Part II) and lasts 4 hours. The pass rate for the first part of the exam is rather low (41% in 2018).
FRM Part II :
FRM Part II also offers two sessions per year. This part takes place in the afternoon only and consists of 80 multiple-choice questions. Time available for the test is 4 hours. For Part II, the time available to candidates is 4 hours. Here too, the pass rate is low (53% in 2018).
What are the FRM Part I and Part II tests?
Part I seeks to assess your understanding of the tools used to assess financial risk.
There are four key areas:
- Quantitative analysis (20%)
Part II of the FRM certification is made up of 6 themes with different percentages that go into calculating your overall grade:
- Measurement and management of credit risks (20%)
How much does FRM cost?
The price of the FRM varies considerably depending on the levels you wish to take and your registration date. For example, a student who registers for the August session before April 30 will pay $1,000. If they pay before June 30, they will pay $1200. Please note: the prices given are for the first part of the FRM: there is still one more part to pass and validate!
For a candidate who has failed the test once, "Returning Candidate" on the website, the price is $600, rising to $800 for last-minute registrations.
Then there's the cost of FRM preparation. Many candidates go through private preparation organizations. It is estimated that taking part one of the FRM requires 275 hours of preparation. It can be difficult to work alone over such a long period. As a result, many candidates turn to expensive training centers.
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