FRM vs CFA: Key Differences, Career Prospects, and Which to Choose

Graduating B.Com students often face a major dilemma, i.e. making the right choice between FRM vs CFA for their future professional pathway. Selecting suitable certification is a vital decision for those who aim to build a successful career in the world of finance. The fact of the matter is that both of these certifications come with unique opportunities, while being tailored to specific areas of expertise alongside. This blog will take a closer look at the major differences between the two, along with future career prospects for a better understanding. It will help you decide which is better: FRM or CFA. 

Understanding FRM and CFA

Understanding the core differences between FRM certification vs CFA certification is vital before making a decision. Here are some finer points worth noting in this regard. 

FRM (Financial Risk Manager) is a globally acknowledged certification that is regulated by the Global Association of Risk Professionals (GARP) for individuals specialising in financial risk management. It emphasises the detection, assessment, and mitigation of risks related to credit, financial volatility, and operational processes.

Professionals with FRM-certification usually work in sectors like insurance, banking and financial services, and investments. Some of the typical job positions may include Risk Manager, Risk Analyst, Chief Risk Officer, and more. 

Conversely, the CFA Institute grants the Chartered Financial Analyst (CFA) certification which is indicative of global excellence standards in areas like financial analysis and investment management. Some of the covered skills include equity research, investment strategy, portfolio management, etc. 

Common positions for those with CFA certification usually include roles like Portfolio Manager, Investment Analyst, Financial Advisor, and so on, in categories like wealth advisory, private equity, asset management, etc.

Key Differences Between FRM and CFA

Getting into the FRM vs CFA comparison at its core, it can be said that CFA is more for those looking for investment-oriented job positions. On the other hand, FRM is suitable for those more inclined towards risk management. Yet, there are more differences between the two types of certifications. Let us check out the same below. 

 
Coming to the debate around which is better – CFA or FRM, it majorly depends on your specific career objectives. For investment-focused roles, CFA is ideal, while FRM suits those passionate about managing financial risks. 

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Career Prospects and Job Roles

The CFA vs FRM career scope differs significantly. In roles such as Risk Analyst, Risk Manager, and Chief Risk Officer, FRM-certified professionals are in high demand. Banks, insurance companies, and hedge funds offer multiple opportunities for FRMs. For investment-related positions, holders of CFA certificates have a wider scope of opportunities. Investment Analyst, Portfolio Manager and Financial Advisor are typical roles in this area. These roles span many different industries, such as asset management, equity research, and private banking.

Salary Expectations 

If you closely evaluate the CFA vs FRM salary in India, you’ll find that both certifications come with attractive salaries for professionals. However, the industry and job role largely influence the eventual packages. Let us look at some of the popular job roles after completing these certifications and approximate salaries (yearly) for each. 

Job Roles after CFA

1. Investment Manager: Rs 2.8 lakh - Rs 35 lakh per annum
2. Investment Analyst: Rs 6 lakh - Rs 17 lakh per annum
3. Equity Research Analyst: Rs 10.5 lakhs a year
4. Wealth Manager: Rs 3.0 lakh - Rs 12 lakh per annum
5. Financial Analyst: Rs 2 lakh – Rs 12.3 lakh per annum

Job Roles after FRM

1. Risk Consultant: Rs 10.7 lakhs a year
2. Credit Risk Analyst: Rs 11 lakhs a year
3. Credit Risk Manager: Rs 11 lakhs a year
4. Risk Manager: Rs 11 lakhs a year
5. Operational Risk Officer: Rs 40.1 lakhs a year

Between FRM & CFA - Who Should Choose What?

The FRM vs CFA question is essential and depends largely on the specific career pathway that you wish to opt for. Both of these certifications have global recognition and can lead you towards lucrative future opportunities, although they are tailored for different financial aspects.

So, if you’re a student aiming to build a career in investment strategy and management, the CFA certification is worth considering. On the flipside, if risk management is more your thing, then the FRM certification will undoubtedly be more helpful. It is important to carefully understand your passions and the requirements of the industry before selecting the certification that is the right fit for your aspirations. If you have just completed your 12th grade and are contemplating a career in Finance, before taking either CFA or FRM, it is advised that you pursue a suitable undergraduate program like the Bachelor of Commerce with specialization in International Finance & Accounting from Amity Online.

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