FRM Certification

Written by: Nik Ventouris

Last updated:

The Financial Risk Manager (FRM) certification is a globally recognized professional designation for risk managers that plays a critical role in the finance industry, shaping the way organizations understand, approach, and mitigate various risks.

The FRM certification symbolizes a commitment to excellence and mastery in financial risk management. It is a valuable step for experienced risk managers, professionals exploring finance careers, or anyone interested in understanding how companies handle financial risks.

In this detailed overview, we’ll explore everything you need to know about the FRM Certification, including its meaning, the specific roles it prepares you for, how to become certified, and how it can align with your career goals.

What is the FRM

The FRM certification is a globally recognized qualification that proves a person’s ability to identify and manage risks within the financial industry.

Below, we’ve included information on how it can be beneficial for a variety of different professions and roles:

  • For Risk Managers and Investment Managers: The FRM certification focuses on various financial risks such as market, credit, and operational risks. It can thus be suitable for professionals already working in risk analysis, management, or compliance-related roles within banks, investment firms, and other financial institutions
  • For Those New to Risk Management: If you’re starting your career and want to explore the field of risk management, the FRM certification can provide you with a solid foundation. It offers exposure to strategic aspects of managing financial risks, which can help you understand how companies protect themselves from potential financial losses
  • For Professionals in Other Areas: Even if you’re not in a financial role, understanding risk management can be valuable. For instance, if you work in a manufacturing company, you might deal with supply chain risks. The FRM certification can help you learn how to identify and mitigate these risks most effectively
  • Career Growth and Opportunities: Whether you want to specialize further in your current field or explore new career paths in finance, the FRM certification can open doors. It’s a strong signal to employers that you are committed to excellence in a critical area of financial services

In simple terms, the FRM certification is a prestigious pathway to success, offering numerous opportunities in finance and risk-related roles. However, to earn this certification and take advantage of its benefits, it’s essential to use reputable study resources, guides, and materials.

Recommended Study Materials

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

4.7 out of 5 starsKaplan Schweser

How to Become an FRM

Before you start your journey to become an FRM it’s essential to understand what you’ll need at each step of the way.

Below we’ve broken down each step so you know exactly what to expect.

FRM Requirements

In order to become an FRM, you will need to satisfy certain education, exam, experience, and ethical standards requirements. Let’s take a more in-depth look at each one of these below.


Understanding the core principles of risk management starts with a solid educational background.

  • A bachelor’s degree in finance, economics, statistics, or a related field is the minimum education requirement
  • Equivalent work experience can also be accepted, depending on its relevance to risk management

Note: The educational requirement lays the foundation for the specialized topics within the FRM exams, such as treasury risk measurement.

FRM Exam

The FRM certification process involves passing two exams:

  • Part I: A four-hour test with 100 questions on foundational topics like Risk Management, Quantitative Analysis, Financial Markets, and Risk Models
  • Part II: Another four-hour test, consisting of 80 questions that explore the practical application of tools and concepts from Part I, such as Market Risk Measurement and Credit Risk Management

Note: Experience up to 10 years prior to passing both exams is applicable, and the Global Association of Risk Professionals (GARP) offers a Continuing Professional Development (CPD) program to ensure your skills remain up to date.

Work Experience

As part of the FRM certification, you’ll need to satisfy the following work experience requirements:

  • At least two years of full-time experience in a risk-related profession
  • Roles in risk analysis, management, or compliance are generally ideal

This is because GARP looks for work experience where the identification, measurement, monitoring, or management of risk is a key part of the job’s responsibility.

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

4.7 out of 5 starsKaplan Schweser

Is the FRM Certification Right for You?

The decision to pursue a Financial Risk Manager (FRM) certification is an important one and should be made based on factors such as your interest in risk management, your career goals, and your readiness to invest both time and money.

Let’s take a look at some of the benefits of getting the FRM certification:

  • Career Opportunities: With an FRM certification, you’ll find doors opening in banking, investment firms, government agencies, and other sectors. Whether it’s risk analysis, compliance, or investment management, there’s a wide array of roles you could fit into
  • Professional Growth: The certification is a significant commitment. It requires rigorous study, passing two challenging exams, and a dedication to continuous learning. But the payoff includes enhancing your specialized skills in financial risk management and connecting with like-minded professionals
  • Potential Benefits: Beyond knowledge and connections, an FRM certification can make you more attractive to employers. It might help you negotiate a higher salary or move up within your organization

We’ve also included some considerations for you to bear in mind while making this decision:

  • Investment Considerations: Pursuing an FRM certification involves investing both time and money. It’s not just about paying for the exams; it’s about the hours of study, preparation, and possible enrollment in prep courses. You’ll need to weigh these investments against the potential benefits to decide if they align with your career aspirations and financial situation
  • Challenging but Rewarding: Achieving an FRM certification is not easy, but it can be a fulfilling step leading to a dynamic and successful career in finance. The knowledge gained, the skills developed, and the professional network you’ll become part of can be invaluable assets

If you feel drawn to the challenge and excitement of risk management, an FRM designation might just be the right choice for you.

For a more detailed comparison and to further assist your decision-making, we recommend having a look at our CFA vs. FRM article.

FRM Certification FAQ

Is FRM better than CFA?

It’s not a matter of better or worse between FRM and CFA, but what fits your career goals. If you’re aiming to become a wealth manager, focusing on financial planning, investment management, and certifications like the CFA can lead you down the right path. The choice depends on your specialization and intended role. Interested in finding out more? Read our How to Become a Wealth Manager article.

What is an FRM certification?

The FRM, or Financial Risk Manager certification, is a globally recognized credential for professionals in the field of risk management. It proves a person’s ability to understand and manage financial risks, and demonstrates knowledge of the tools and strategies necessary for risk mitigation.

Which is harder CFA or FRM?

The difficulty level of the CFA and FRM depends on your background and areas of interest. The CFA covers a wide range of finance subjects, whereas FRM focuses on risk management. The effort required to prepare will vary based on individual preferences and professional goals. For more information, we recommend having a look at our CFA vs. FRM article.

Is the FRM certification worth it?

The FRM Certification can be highly valuable if you aim to specialize in risk management. It enhances employability and connects you with asset management firms in the field. However, the value depends on your specific career path and aspirations.

Is the FRM difficult?

The FRM certification can be challenging, especially if you are new to risk management concepts. However, with proper preparation, dedication, and the use of recommended study materials like Kaplan’s resources, many candidates find success in obtaining the certification. For more information, have a look at our FRM Exam article.

What is the difference between the FRM and a Masters?

The FRM (Financial Risk Management) designation is a professional certification focused on risk analysis and control, market risk, and credit risk. A Master’s degree, on the other hand, offers a broader education in finance or a related field. Since both are good choices, we recommend taking into account aspects such as your resources and career goals before making a final decision.

How long does it take to obtain an FRM certification?

Obtaining an FRM certification typically takes about 1-2 years. 
The process involves passing two rigorous exams, usually six months apart. Candidates also need a minimum of two years of work experience in financial risk management or a related field. Having said that, you should keep in mind that the pace can vary significantly depending on your study habits and professional commitments.

Is the FRM expensive?

The cost of obtaining an FRM certification can be moderately expensive, with exam fees ranging from $650 to $950 per part. Additionally, there are study materials, preparation courses, and the GARP membership fee to consider. Overall, you could spend between $1,500 to $3,000 or more. While it’s an investment, the certification can potentially boost your earning potential in the long run. See our FRM Salary article for more information.

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