The Ability to effectively analyze financial risk factors and aid clients in mitigating such risks is a crucial skill for any financial advisor, whether they work with people or businesses. Years of experience are necessary for accurate risk prediction, however, you can skip the learning curve and get certified as a Financial Risk Manager (FRM). Earning your FRM credential demonstrates that you are uniquely suited to advise clients on risk management and financial matters. Certain certifications can be earned in as little as six months, while others may take as much as two years to finish.
In this article, we will discuss why obtaining a financial risk manager certificate is a must.
Details About Financial Risk Manager Certification
The Financial Risk Manager (FRM) certification is a globally recognized designation given by the Global Association of Risk professionals (GARP) to professionals dealing with financial risks. The FRM accreditation is the gold standard for professionals working in the field.
The candidates are required to pass two exams and also hold at least two years of professional work experience in risk management. Professionals with FRM credentials are in high demand by financial institutions such as banks, insurance companies, accountancy firms, government agencies, and asset management organizations.
An FRM detects risks to a company’s resources, profits, or viability. They understand the developments and trends that may affect corporate operations by analyzing data on financial markets and world events. In addition, experts are counted on to offer sound advice and effective methods of safety.
Why Is FRM Certification A Must?
Getting FRM certification has several advantages. Some of them include:
Advancement In Career
If you are interested in making a career in accounting and finance, getting professional certifications in the sector might help you learn more and get ahead.
Employers are often prepared to pay a premium for qualified applicants who hold specific certifications. Therefore, having an FRM certification can put you on the list of employees with a higher salary.
The hiring process can get sticky when several candidates share the same set of experiences and education. Having a financial accounting certification may give you an advantage over competitors.
Funding for Further Education
Employees may be required to take certification courses to demonstrate their understanding of relevant topics in the workplace. In such cases, it is possible to get certification fees covered by your employer.
Eligibility Criteria For FRM Certification
Successful candidates must have two years of professional experience in financial risk management and pass a demanding, two-part exam to get the FRM designation.
Those who have earned the FRM designation have the opportunity to pursue additional training and education. The FRM curriculum is structured on the four main strategic areas of risk management (credit risk, market risk, investment management, and operational risk). The exam’s goal is to assess a candidate’s readiness to handle financial risk in a global context.
The test consists of questions that are directly relevant to the workplace and the candidate’s actual experiences. Candidates must have a firm grasp of risk management principles and methods as they relate to the duties of a risk manager.
In the test, there are 100 questions in the first section of the FRM exam while 80 questions are in the second section.
Who Should Choose FRM?
The FRM program is both demanding and costly. If you are confident in your talents and know for sure that you want to work in the fields of corporate finance, investment management, or risk management.
You should choose FRM if:
- You are a student looking to improve your career in accounting and finance for future opportunities.
- A candidate who has passed either Part I or Part II of FRM is highly considered for jobs compared to those who have not taken the exam.
- Without committing to a full Bachelor’s or Master’s degree program, this certification can open doors to a variety of risk management roles like a risk manager.
- You want to learn more about risk management, financial markets, products, and related tools. The FRM program offers an in-depth education on the fundamentals of risk management.
- Some of the designations after the completion of FRM include senior risk analyst, head of the operational risk, and chief risk officer.
The majority of FRMs work in banking and related financial services. The need for competent risk management groups, however, is universal, including not only the healthcare and engineering sectors but also the natural sources and technology-based organizations.
Considering that all financial institutions are subject to financial risks like operational risk, credit risk, and market risk regularly, FRM is rapidly becoming the profession of choice for both students and professionals.