Does anyone know the difference between CFA and FRM? Does anyone know?

1. Cost and difficulty:

The difficulty of the two exams is very different.

CFA requires 4 years of work experience and 3 exams. If you pass all Level 3 in one go, it will take 2.5 years (assuming half a year of review for Level 1); while FRM financial risk managers only need 2 years of relevant experience, 1 exam (Part 1/2 can be completed in one day).

So for those with a science and engineering background who hope to change careers/employ/certify themselves by passing an exam in a short period of time, the FRM exam seems to be more cost-effective. But if you meet the following three conditions:

a. Don’t care whether to add three more letters on your business card

b. Just want to learn some financial knowledge

c. If you don’t want to sacrifice too much leisure time, then I recommend taking CFA Level 1 only - they are all popular science level knowledge, but very comprehensive. Online consultation for CFA level 1 details

2. Knowledge points:

Differences

i.FRM is biased towards risk management: quantitative (quantitative) has a greater proportion. The explanation of market/operation/credit risk in FRM is more in-depth. The Basel Accord part of FRM may not be used outside commercial banks, but commercial banks very much welcome people with Basel Accord experience.

ii.CFA prefers investment: more comprehensive, including financial analysis, stock investment, economics, professional ethics, etc. that FRM does not have. The knowledge points contained are several times that of FRM, but for a fund manager, these are necessary knowledge. In addition, the ethics part in CFA may seem useless, but it is actually a good way to understand Westerners’ professional outlook.

Similarities

Capital markets (bonds, derivatives), mathematical statistics, and asset portfolio management. For the same knowledge points, the depth and breadth of FRM is between CFA Level 1 and Level 2.

3. Employment

Which job is easier?

The certificate itself is not decisive for employment. However, since many candidates take the exam for the purpose of finding a job or changing careers, if you must choose a certificate that is more helpful for employment, it must be the CFA exam. On the US job search website, if there are 50 corresponding results when searching for positions with the keyword "FRM", then there will be at least 100 results when searching for CFA.

How helpful is it for employment?

In Wall Street job recruitment descriptions, if CFA is mentioned, it usually says: "participation in CFA program would be a plus." In other words, Whether you have taken the test or not, whether you have taken the test or not, are not critical selection criteria.

However, if you happen to be preparing for the CFA or FRM exam when you are looking for a job, then the knowledge in it will make your interview very, very easy and ensure that there will be no flaws in the knowledge aspect. So for employment, I think the certificate will help you in passing the interview, not the resume.

4. Career development for those who are already working

CFA employment prospects: Help for work

i. The certificate allows me to understand the principles of work Model/process used.

While working for a hedge fund, I mainly covered quantitative analysis of U.S. and Asian stocks, stock options, corporate bonds, and corporate bond CDS. Therefore, except for the Basel Agreement and operational risk knowledge, basically all other parts of FRM will be used. When I was learning FRM, I often had the feeling of “Eureka, that’s it”, which gave me a deeper understanding of the models I was using. Now that I work in a rating company, I pay more attention to the bond market and structured products.

Although a lot of financial, economic and other knowledge in CFA cannot be directly applied to work, it definitely helps me make more sense of my work.

ii. It broadens the vocabulary and helps me communicate with other departments or customers. More grounded.

Especially for CFA, if you pass all Level 3 exams, it will be difficult to encounter financial vocabulary you have never heard of. No one wants to ask stupid questions in a meeting with their boss or in a negotiation with a client.

iii. It is a bargaining chip for a salary increase

There are many factors that affect salary increase/promotion. Certificate is not an important one, but it has an impact. For example, many companies have an item called "Completeness of Professional Knowledge" in their year-end assessment score sheets. CFA can at least get high scores in this area.

What the certificate cannot bring you

i. Experience

The certificate only talks about the principles. Many more practical knowledge and skills cannot be mastered through examination: such as how to use Bloomberg to download data, how to use Excel or other software to calculate duration, VaR, do Monte Carlo, etc., how to write a derivatives or bond contract that is ten or dozens of pages long. Find valuable information and how to explain complex models to customers in simple language.

ii. Network

Finance is essentially a game of people and resources. In China it’s called “guanxi” or “people connections”; on Wall Street it’s called “connection” or “networking”. When people spend their spare time preparing for exams, they also lose the opportunity to make more friends. I dare not say which one is more important, knowledge or connections, but both must be indispensable.

About changing jobs from the back office to the front office through certificates

Who are suitable to take the FRM exam?

Financial institution risk control personnel, financial unit auditors, asset managers, Fund managers, financial traders (brokers), investment banks, commercial banks, risk technology companies, risk consultants, corporate accounting and auditing departments, CFO, MIS, CIO, most of which serve large enterprises and the financial industry Mainly workers. In particular, more and more financial institutions are giving priority to those with FRM qualifications when recruiting for positions related to risk management. For example, many large financial institutions and investment banks are recruiting employees for credit analysis positions in the risk management department. Requirements:

1. Bachelor's degree in economics, finance, investment, accounting or related majors;

2. Candidates with CPA, FRM, CFA and other qualifications will be given priority; CFA FRM dual certificate class Online consultation for course details

3. More than 3 years of relevant work experience in financial analysis or credit evaluation in a credit rating agency or a large financial institution;

4. Solid financial skills, strong Analytical skills, good expression skills in Chinese and English;

5. Self-motivated, willing to accept high-intensity work, rigorous and meticulous work, with strong coordination and communication skills.

FRM not only represents the only way to enter the financial industry in North America, but also provides opportunities for Chinese friends who are determined to pursue a career in China's financial industry. Especially in today's relatively sluggish economy, many financial industries in Canada have Employers still favor people with risk management knowledge. As a first-level certificate in the field of risk management, FRM is even more valuable under this opportunity!

Who is suitable for taking the CFA exam?

The CFA exam focuses on cutting-edge international financial theories and techniques, including investment analysis, portfolio management, financial statement analysis, corporate finance, economics, investment performance evaluation and professional ethics. The CFA qualification is awarded to a wide range of professionals in various investment fields, including fund managers, securities analysts, financial directors, investment consultants, investment bankers, traders, etc.

In the financial investment industry, the CFA certificate is most authoritative and recognized. It focuses on financial market knowledge, including stock and bond analysis, financial statement research, futures options, portfolio analysis and asset evaluation. wait. To some extent, because it involves broad and deep knowledge and stresses analytical skills, it is even more professional than MBA. For example: MBA, as a master's degree in business administration, focuses on the management of the entire business operation of a company. It includes finance, marketing, strategy, finance and other aspects, and cultivates comprehensive management capabilities and business decision-making awareness;

CFA, in contrast, focuses on financial market knowledge, including stocks and bonds Analysis, financial statement research, futures options, portfolio analysis and asset evaluation, etc., involve broad and deep knowledge, pay attention to analytical skills, and are more professional than MBA. In short, the authority and recognition of the CFA certificate are absolute.

The global recognition of CFA allows your employer to immediately recognize your mastery and depth of knowledge of financial markets. You'll effectively learn how to analyze securities, bonds, derivatives and financial ratios to enhance your ability to work in the investment industry. Usually, the value of your CFA will be reflected in the income level your employer gives you. Therefore, CFA has long been regarded as the MBA in the financial world and is more popular in the financial market. People who hope to develop in the financial world should choose CFA to register.

Get to know some of the backend staff at major investment banks in New York, such as the IT and Operation departments. Many of them have a background in computer science. They originally chose Wall Street instead of Silicon Valley because they hoped to switch to real investment banking within the company in the future.

However, many of them may have been promoted to VP in the back office after taking the CFA exam - if they change departments, they may have to start as Analyst again. Are you willing to give up your hard-earned high-salary, easy, and stable position to work as a front-desk clerk who seems to be more promising? The result is that many people hold CFA certificates but stay in the back-office. The purpose of talking about this phenomenon is to tell everyone: before deciding to take the CFA exam, time cost and career development are issues that must be considered.