Difference Between FRM and PRM
You are free to use this image on you website, templates, etc., Please provide us with an attribution linkHow to Provide Attribution?Article Link to be HyperlinkedFor eg:Source: FRM vs PRM (wallstreetmojo.com)
To get a detailed purview of both the courses, let’s look at the following sections step by step.
- What is the Financial Risk Manager?What is the Professional Risk Manager?InfographicsRole of Risk Management ProfessionalsExam RequirementsWhy pursue FRM?Why pursue PRM?
What is a Financial Risk Manager (FRM)?
FRM is offered by the Global Association of Risk Professionals (GARP) for risk management professionals looking to gain expertise in risk management practices in the financial services sector.
This credential helps acquire in-depth knowledge for assessing different types of market and non-market-based financial risks and general practices in the field of financial risk management. It offers an overview of risk management practices within the financial services sector and is a globally recognized credential.
What is the Professional Risk Manager (PRM)?
The Professional Risk Managers’ International Association (PRMIA) offers PRM certification to enhance risk assessment and mitigation knowledge. It is a highly acknowledged credential for risk management professionals, designed to help them develop a detailed understanding of financial risk management.
This certification focuses on studying the quantitative aspect of financial risk modeling, which plays a critical role in predictive financial analysis, which further helps in emerging risk areas and helps take suitable mitigating measures.
FRM vs PRM Infographics
Role of Risk Management Professionals
Risk management essentially involves identifying possible risk factors and taking appropriate mitigating steps to avoid or minimize credit risksCredit RisksCredit risk is the probability of a loss owing to the borrower’s failure to repay the loan or meet debt obligations. It refers to the possibility that the lender may not receive the debt’s principal and an interest component, resulting in interrupted cash flow and increased cost of collection.read more or other forms of risk an organization might face. Undoubtedly, risk management professionals need to be equipped with the necessary knowledge and skills for the purpose. Many certifications can help validate their risk management skills and help keep them abreast of the latest developments in the field.
Two of the standard risk management certificationsRisk Management CertificationsA risk management certification can be defined as an industry-standard credential that evaluates an aspirant’s understanding and expertise in determining and making decisions related to risk. This certification also helps demonstrate a candidate’s technical capabilities in risk management, commitment towards career, performance abilities, sheer dedication, formative work experience, and the kind of education they have had during their risk management careers across all industries and organizations.read more are Financial Risk Manager (FRM) and Professional Risk Manager (PRM). Both these certifications are designed to acquaint professionals with the fundamentals of risk management. Still, it would be essential to know what they offer to make an informed choice.
FRM Vs PRM – Comparative Table
FRM vs PRM Exam Requirements
For FRM You Need:
There are no educational requirements, but the candidate should have at least two years of full-time work experience in risk management, including portfolio management, risk consulting, risk technology, or other related areas.
Part I
Part II
Exam 1 (similar to Exam I and II of 2015 PRM exams)
Exam 2 (similar to Exam III and IV of 2015 PRM exams)
Quantitative Analysis
Valuation
Risk Models
Financial Markets And Products
Credit Risk
Market Risk
Operational Risk & Resiliency
Investment Management
Treasury & Liquidity Risk Management
Current Issues In Financial Markets
Financial Markets
Risk Management Frameworks & Operational Risk
Credit Risk & Counterparty Credit Risk
Mathematical Foundations of Risk Measurement
Asset Liability Management
Funds Transfer Pricing
PRMIA Standards and Governance
Part I: $550 (Early registration), $750 (Standard registration)
Part II: $550 (Early registration), $750 (Standard registration)
Risk Assessment Manager
Financial Risk Consultant
Investment Banker
Risk Management Analyst
Risk Officer
Predictive Analyst
Investment Risk Manager
Risk Analyst
Part I: May 07-20 and Nov 05-18 (all computer-based)
Part II: May 21-27 and Nov 19-25 (all computer-based)
Feb 14 – Mar 11
May 23 – Jun 17
Aug 15 – Sep 09
Nov 14 – Dec 16
For PRM You Need:
The work experience requirements for PRM are based on the educational qualifications, detailed as below:
- No Bachelor’s Degree – 4 YearsBachelor’s Degree – 2 YearsPost Graduation – No work experience requiredProfessional Certifications including CFACFAThe 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 or CAIACAIAThere are two levels to the CFA® CAIA exam. Professional Standards and Ethics, as well as an introduction to alternative investments, are covered in Level I, while alternative investments and other integrated topics are covered in Level II.read more – No work experience required
Why Pursue FRM?
FRM is a highly valued risk management credential that has been long in existence compared to PRM and has acquired industry-wide recognition over these years. As a result, those with a fair amount of professional experience and exposure in risk management are better suited for this credential than those new to this specialized field.
Another point to be remembered is that FRM is more broad-based in approaching risk management areas than PRM, making it a better fit for aspirants to prepare for roles like risk assessments managers and head of the treasury department, which require broad-based knowledge of the field.
Why Pursue PRM?
PRM is undoubtedly another much-valued credential for risk management professionals and is best suited for those interested in developing expertise in the quantitative aspect of financial risk management. One advantage is that no prior work experience in risk management is mandatory to appear for this exam.
It must be kept in mind that both these certifications share up to 80-90% of the learning areas, making it a little hard to decide which certificate should be opted for. However, PRM is slightly more technical and more suited for individuals with a mathematical mind, making it more suitable to prepare for the predictive and risk analyst roles.
Conclusion
In short, both of these certifications help upgrade and validate risk management capabilities while enhancing their potential worth in the eyes of prospective employers. Choose the one that meets your career goals. All the Best!
Recommended Articles
This has been a guide to FRM vs. PRM. Here we discuss the difference between FRM and PRM and the infographics and comparison table. You can learn more from the following articles –
- FRM and CAIA – which is better?CA vs FRM – key differencesCFA vs FRM – who is the king?PRM vs CRM – what’s the difference?