Difference Between FRM and MBA
FRM is the short form for Finance Risk Management, and it is taken up by individuals who want to specialize in skills and knowledge about Risk Management. In contrast, MBA stands for Masters in Business Administration, and it is chosen by individuals who are willing to expertise themselves in management-related skills.
Finance is a very lucrative career yet very boring for those not interested. So if you are confused between whether to take the FRM examinationFRM ExaminationFRM exam (Financial Risk Management) is a part of tests conducted by the Global Association of Risk Professionals to issue an FRM certification to the person who passes the exam recognizing candidate’s eligibility to work in an economic environment as they possess a strong knowledge and sound understanding of financial risk, analysis, and management.read more or complete your MBA or both, do have a look at this quick guide to help you phase out the dilemma.
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FRM vs MBA Infographics
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Let’s understand the difference between these two streams with the help of this FRM vs. MBA Infographics.
FRM vs MBA Comparative Table
What is FRM or Financial Risk Manager?
Financial risk management is a global certified program based in the US and is offered by the Global Association of Risk Professionals. The course consists of two parts and prepares you for risk management, measurements of quantitative analysis techniques and financial marketsFinancial MarketsThe term “financial market” refers to the marketplace where activities such as the creation and trading of various financial assets such as bonds, stocks, commodities, currencies, and derivatives take place. It provides a platform for sellers and buyers to interact and trade at a price determined by market forces.read more, and products and evaluation models.
Part I
Part II
Quantitative Analysis
Valuation
Financial Markets & Products
Risk Models
Credit Risk, Market Risk & Operational Risk
Treasury & Liquidity Risk Management
Investment Management
Accounting
Business Statistics
Business Ethics
Managerial Economics
Operations Research
Financial & Marketing Management
Human Resource Management
Risk Manager
Financial Risk Consultant
Risk Management Analyst
Investment Banker
Operations Manager
Human Resource Manager
Marketing Manager
Financial Advisor
Financial Analyst
Part I: May 07-20 and Nov 05-18
Part II: May 21-27 and Nov 19-25
The FRM course requires the candidate to have two years of full-time working experience in the finance arena, which can be in the form of risk management, trading, academia, equity researchEquity ResearchEquity Research refers to the study of a business, i.e., analyzing a company’s financials, performing Ratio Analysis, Financial forecasting in Excel (Financial Modeling), & exploring scenarios to make insightful BUY/HOLD/SELL stock investment recommendations. Moreover, the Equity Research Analysts discuss their findings & details in the Equity Research Reports. read more, portfolio management, auditing, economics, or risk consulting.
What is an MBA or Master of Business Administration?
A master’s degree in business administration prepares you for the business realm and is typically for people who want to make a career in marketing and general management. This two-year course offered in business schools prepares you for management analysis and strategy while providing a thorough knowledge of accounting, finance, marketing, and human resources.
The MBA course is available in full-time, part-time, and distance learning processes, each significant in the industry.
FRM vs MBA Requirements
The cost of pursuing these courses often plays a huge deciding factor for many and is one of the biggest disadvantages of an MBA program. While an MBA is a two-year rigorous study filled with internships and exams, passing the FRM certified course is more difficult as it requires dedication and hard work from the entrant. During 2019, the pass rates for Part I and Part II were ~46% and ~59%, respectively, which gives a fair indication of the exams’ difficulty level. In 2022, FRM will move to computer-based testing for Parts I and Part II exams.
The MBA program can be either in a semester or trimester mode, and the course duration can vary in the range of 1 to 2 years, depending on the institution and the type of program. The success rate in this program depends on their GPA, test score, strong work ethics, internships, great recommendations by professors and industry professionals with whom he has rubbed his shoulders, leadership qualities, and abilities to come out with an edge amongst their peers. Thus, career prospects vary and depend on an individual’s talent and hard work.
Why pursue FRM?
FRM today is considered an alternative option to CFA.CFA.The Chartered Financial Analyst (CFA®) Program offers a graduate-level curriculum and examination program designed to expand your working knowledge and practical skills related to investment decision-making. read more. While CFA and MBACFA And MBACFA focusses on imparting skills associated with Investment Management including Investment Analysis, Portfolio Strategy, Asset Allocation, and Corporate Finance. MBA focusses on overall Management Skills like Marketing, Operations, Finance, Human Resource Accounting, etc.read more remain the traditional choices to boost career prospects, FRM, as observed by industry experts, is poised for growth, considering that the market is less saturated with FRMs than CFAs at the moment. Though FRM can boost your earning power, to believe that it would happen overnight and create you a millionaire is a wrong perception. The banks are still to be made aware of FRM as a certification, which is on par with a CFA (though less holistic and more narrow), and therefore it is not a must-have while a candidate is being recruited.
FRM certified course is best suited for those individuals in the finance industries who play a senior role in management firms, government agencies, Investment banking firms, hedge funds, asset firms, commercial banks, central banks, credit agencies, corporations, technology, and asset vendors, consulting firm and so on and want to jump up in their positions or are looking for a change in career domain.
#Tip: Dedication and Patience are necessary for candidates to clear FRM exams.
Additional certification after a traditional degree is a prerequisite considering the booming number of talented professionals in the industry. Thus, FRM is for professionals looking to excel and make progress in their portfolio or desire a shift in their career with a more diversified, analytical, and challenging role in their careers. In addition, the syllabus of these certified courses has a much broader global perspective and has relevance in today’s financial market scenario.
Why pursue an MBA?
MBA provides good business skills and is appropriate for climbing the corporate ladder. With a degree in IT, Finance, or Marketing, studying MBA is worth the pain as it will prepare you to excel in managerial roles. However, an MBA is a rigorous study course. It is vast in its syllabus, touching upon the various topics, perhaps not in great detail but preparing you in general for diversification.
Tip: It is, however, my observation that an MBA is a must as it prepares you for business entirely while a certification course is supplementary to an MBA enhancing your abilities, analytical skills, and ethical grounding.
Monetary issues guide our choices, and often lack of interest and talent is overridden in making a career choice. However, the most repentant is the one who makes a career choice to go with the flow without adequately researching the various industries and the courses. Choose FRM if you are interested and passionate about finance and risk management. Choose an MBA if you are interested in a company’s management and business aspects.
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