FRM Salary

Written by: Mary Gerardine

Last updated:

FRM Salary

Opting for a career as a Financial Risk Manager (FRM) offers a unique opportunity for both professional growth and financial gain within the finance sector. Endorsed by the Global Association of Risk Professionals (GARP), the FRM title demonstrates expertise in understanding, assessing, and effectively managing financial risks.

In this article, we will explore the factors that influence FRM Salary, discuss available job opportunities, and outline the pathway to attaining this well-regarded credential. Whether you’re an existing finance professional or a newcomer keen to enter the field, this article contains valuable insights into the earning potential of an FRM career.

FRM Salary Overview

One of the main benefits of obtaining an FRM qualification is that it’s a great way for anyone working in risk management to boost their career and land some of the highest-earning jobs in this field.

Your earning potential can vary quite significantly depending on the specialty you choose after obtaining your FRM certification, with salaries typically ranging from $90,000 to $120,000. Out of the range of roles FRM license-holders generally performed, operational risk managers and corporate risk directors tended to earn the most.

Meanwhile, risk analysts, regulatory risk analysts, and credit risk specialists were some of the lowest earners of the group — with salaries that tended to range from $70,000 to $95,000.

In addition to base salaries, many FRMs earn a large portion of their income from annual bonuses. However, since the amount earned is based on both the individual’s and company’s overall financial performance, this has not been considered in these salary estimations.

Recommended Study Materials

Interested in commencing your FRM studies? We recommend having a look at Kaplan’s in-depth study materials.

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For a more detailed overview of the FRM qualification, check out our FRM Certification article.

Factors Influencing Salary

Various factors can come into play when considering the potential salary of an FRM. Some of the main ones include:

  • Experience Level: As in many other professions, experience matters. An FRM with several years of expertise will earn a higher salary than someone just starting their career in financial risk management. Experience not only improves an FRM’s skill set, but also gives them added credibility for which employers will pay more
  • Location: The region in which you work also can impact your salary. Working in global financial hubs often results in higher compensation than jobs in smaller markets or cities
  • Industry Role: The specific industry in which an FRM works also may help determine their income. For example, FRMs working in investment banking, hedge funds, or asset management may earn higher salaries than those working in less lucrative sectors like retail banking or insurance
  • Market Demand: Companies are more willing to invest in risk management during economic booms, which can drive up salaries. Conversely, decreased demand during downturns in the economy can negatively affect salary levels

A comprehensive understanding of the various factors influencing an FRM’s salary can help you better navigate your career path within this industry.

FRM Jobs

Finance professionals often use the FRM certification as a stepping stone to various roles within the industry — especially jobs in risk management and analysis. Below we’ve broken down three of the most common job titles held by FRMs:

  • Financial Risk Manager: These risk management professionals are responsible for identifying, analyzing, and mitigating financial risks within an organization. Specifically, financial risk managers protect a company’s assets and financial stability. They may work with various departments and act as credit risk managers, operational risk managers, or market risk managers
  • Risk Analyst: These professionals often employ various quantitative methods and models to gauge market volatility and potential losses. They can work as market risk analysts or quantitative analysts and are responsible for evaluating financial risks and recommending strategies to mitigate them
  • Chief Risk Officer (CRO): This senior executive role has responsibility for the entire risk management program within an organization. A CRO will work closely with other C-level executives to integrate risk management into strategic planning and decision-making processes

An FRM designation can open doors to various roles within risk management and beyond. The job titles above represent just a sampling of the positions available to someone with an FRM certification in the increasingly complex and evolving financial landscape.

How to Get Your FRM Certification

Before you can obtain an FRM certification, you must first take the FRM exam. However, you’ll need to ensure you meet the eligibility criteria before registering for the exam.

While there are no educational prerequisites to take the FRM exam, having two years of relevant work experience in finance, economics, or a related field can prove beneficial.

Exam Preparation and Procedure

You can register for the FRM exam on the GARP portal. Registration typically involves providing your personal information, choosing your exam site, and paying the required fees.

The FRM exam has two parts:

  • Part I: This part of the exam includes 100 multiple-choice questions, focusing on the essential instruments for evaluating financial risk. It covers the basics of risk management, numerical assessments, the structure of financial markets and products, and valuation and risk modeling techniques
  • Part II: This part of the exam features 80 multiple-choice questions and focuses on the practical use of the methodologies learned in Part I. It covers topics like market risk, credit risk, operational risk and resilience, management of treasury and liquidity risk, risk management in investment, and current financial market issues

The final step required to get your FRM certification is to obtain two years of relevant, full-time work experience. This can be done either before or after passing both parts of the FRM exam.

Ready to get started? StateRequirement recommends having a look at Kaplan’s study materials and resources.

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FRM Salary FAQ

How much does a FRM make?

The salary of an FRM varies widely based on factors like their experience, location, and job title or role. According to the latest compensation data, the average salary of an FRM can range from $91,380 and $118,250 per year. For a more detailed look into how much you could make as an FRM, see our FRM Salary article.

Is an FRM certification better than a CFA certification?

Both are respected professional credentials, though they are better suited for different specialisms. While the FRM is ideal for roles in banking or corporate finance departments due to its focus on risk management, the CFA offers a broader finance curriculum which makes it suitable for jobs in financial analysis.

How hard is the FRM exam?

Many candidates consider the FRM exam challenging given its specialized focus on financial risk management. The exam features two parts, which requires candidates to have a strong foundation in quantitative methods and financial concepts. Candidates often spend several months preparing for this exam, and pass rates historically hover around 40% to 60% for both parts.

How beneficial is having an FRM certification?

An FRM certification can prove highly beneficial for careers in risk management and finance. It offers specialized expertise in identifying and managing financial risks, making FRMs a valuable asset to employers. This globally recognized designation can lead to higher earning potential, career advancement, and greater job opportunities.

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For all related articles, have a look at our Financial Advisor Resources page.