CFA vs FRM: Salary & Difficulty Guide

Students in finance who want to build a successful career often get stuck between CFA vs FRM. While both courses are extremely popular in the field of finance, they can take you in diverse directions. The major difference between both these courses is the concepts you’ll be learning.

While the Chartered Financial Analyst course is a more general course that gives you knowledge on investments, derivatives, fixed income, corporate finance, and analysis, FRM, or Financial Risk Management, on the other hand, is a rather niche course that equips you with risk management techniques. After completing your FRM course, you can choose to become a Financial Risk Manager, Chief Risk Officer, or Investment Risk Manager. 

Needless to say, no matter which profession you choose in CFA vs FRM, opportunities, growth, and salary hikes will follow. However, if you are to choose any one course between the two courses, let’s understand the major differences between the two of them.

Overview of CFA vs FRM

Background on CFA (Chartered Financial Analyst)

The Chartered Financial Analyst (CFA) designation is a globally recognised certification for finance and investment professionals. It is awarded by the CFA Institute and focuses on equipping candidates with expertise in investment management, financial analysis, portfolio management, and ethical financial practices. The CFA credential is highly regarded in the fields of investment banking, equity research, wealth management, and corporate finance.

Background on FRM (Financial Risk Manager)

The Financial Risk Manager (FRM) certification, awarded by the Global Association of Risk Professionals (GARP), is a specialised credential focusing on risk management. FRM-certified professionals are well-versed in identifying, assessing, and mitigating financial risks within organisations. This designation is highly valued in the banking, insurance, asset management, and regulatory sectors, where risk assessment plays a critical role in decision-making.

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CFA vs FRM: Course details and future scope

CFA Course Details and Global Recognition

• Organized by CFA Institute
• Duration: 2 to 3 years
• Comprises three levels: Level I, Level II, and Level III
• Subjects covered: Equity investments, fixed income, derivatives, financial reporting, portfolio management, and ethical standards
• Global recognition across investment firms, banks, hedge funds, and financial institutions
• Exam conducted in various financial hubs worldwide

FRM Course Details and Industry Relevance

• Organized by GARP
• Duration: 1 to 2 years
• Comprises two parts: FRM Part I and FRM Part II
• Subjects covered: Market risk, credit risk, operational risk, and risk modeling
• Highly specialized, focusing on risk management and assessment
• Recognition in risk management, treasury departments, and regulatory bodies

CFA vs FRM: Career Benefits and Compensation

The CFA course is broad in the field of finance and covers everything from investments to risk management. FRM is a rather specific course that enables you to analyse the pricing risks and infuse them in all financial decisions made by your firm.

After the pandemic, the demand for both of these professionals is on the rise. While every company needs an investment expert to put their finances in the right places, they also require an FRM manager to ensure that their finances are safe and secure.

To understand which course would be better for you in the long term, it is important to have a detailed understanding of the benefits of each of these courses.

A Basic Difference in CFA vs FRM Overview

The benefits of these finance courses are unmatched. Depending on your preference, you can choose to take any of these courses that will help you build a successful career. Now coming to the average salary in India, here’s a glimpse of the CFA Salary in India and the FRM salary in India.

Key Differences Between CFA vs FRM

Focus and Specialization

• CFA: Broad focus on investment analysis, financial reporting, and portfolio management
• FRM: Niche focus on financial risk assessment and mitigation

Career Paths and Skill Set Requirements

• CFA professionals work in investment management, hedge funds, corporate finance, and financial analysis.
• FRM professionals work in risk management, credit risk analysis, and regulatory compliance

Industry Recognition and Application

• CFA is highly regarded in investment banking, asset management, and financial analysis
• FRM is recognised within risk management teams, banking institutions, and regulatory frameworks.

CFA vs FRM: What’s More Challenging?

CFA is easier for students with an investment background. Its curriculum is largely based on investment and market fundamentals. The FRM course, on the other hand, is somewhat easier for those who have a quantitative background, as the majority of foundation-level topics are statistical and mathematical.

Is FRM Worth It After CFA?

FRM and CFA are both strong certifications by themselves; when combined, they provide you with the opportunity of building a stellar resume and open new doors to quality employment exponentially. However, keeping your interests in mind, we’d recommend you only pursue FRM if your interests lie in the risk management subject covered in the CFA course first solely because this area is studied microscopically in the FRM course.

Salary Comparison and Trends in India

CFA vs FRM Salary in India: Comparison

Both CFA and FRM professionals enjoy competitive salaries, with CFA salaries generally having broader growth potential due to wider career opportunities, while FRM salaries are steady in specialised risk management roles.

CFA Salary Trends

• Entry-level: 6-10 LPA
• Mid-level: 15-25 LPA
• Senior-level: 30-40+ LPA

FRM Salary Trends

• Entry-level: 7-12 LPA
• Mid-level: 15-22 LPA
• Senior-level: 25-35+ LPA

Top Employers for CFA

• JP Morgan Chase
• Morgan Stanley
• HSBC
• CitiGroup
• PwC
• Consulting Firms and Hedge Funds

Dual Benefits of Combining CFA vs FRM

Advantages of Both Designations

• A combination of CFA vs FRM enhances career prospects, offering expertise in both investment management and risk mitigation.
• Professionals with both designations are preferred for leadership roles in finance, treasury, and risk assessment.

Professionals Who Benefit from Combined Expertise

• Investment bankers with risk management expertise
• Portfolio managers who integrate risk assessment into financial decisions
• Treasury and compliance professionals in banking institutions

Course Fees

CFA Course Fees

• One-time registration fee: $450
• Level I exam fee: $700 – $1,000
• Level II and III exam fees: $700 each

FRM Course Fees

• One-time enrollment fee: $400
• Exam fees for Part I and Part II: $400 – $750 per part (based on registration date)

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Choosing the Right Path: CFA vs FRM

Deciding between CFA vs FRM depends on career goals and interests. If you aspire to work in investment banking, equity research, or wealth management, CFA is the better choice.

If your interest lies in risk analysis, credit risk, or regulatory compliance, FRM is the ideal certification. For professionals looking to gain a competitive edge, pursuing both certifications can offer unmatched expertise and career growth.

FAQs on CFA vs FRM:

Between CFA and FRM, which one is more difficult to clear?

Both CFA and FRM are highly challenging. CFA is broader with three levels and generally lower pass rates, particularly at Level 1 (around 40-45%). FRM is more specialised in risk management, with two parts. Many find FRM’s quantitative depth and application-based questions intensely difficult.

What’s the average salary for CFA and FRM professionals?

In India, a CFA can start around ₹10-15 LPA, growing significantly with experience. FRM professionals in risk roles typically earn ₹6-8 LPA initially. Both see substantial increases, with top CFAs potentially earning ₹50+ LPA and FRMs ₹30+ LPA with experience.

Does having an FRM certification really boost your salary?

Yes, an FRM certification significantly boosts salary, especially in risk management roles. Certified professionals typically earn 20-35% more than their non-certified peers. It signals specialised expertise, leading to higher demand and better compensation in banks, consulting firms, and financial institutions.

Can CFA professionals earn ₹1 crore or more per year?

Yes, highly experienced CFA charterholders can definitely earn ₹1 crore or more annually in India. This typically occurs in senior leadership roles like Chief Financial Officer or Chief Investment Officer, especially at large multinational corporations.

What’s the CFA salary like at JP Morgan or similar global firms?

CFA salaries at firms like JP Morgan are quite strong. In the US, a financial analyst with a CFA might earn $100K-$200K+, while in India, salaries range from ₹5LPA to ₹40LPA, depending on experience and role. It’s an excellent path for high earning potential!

With the rise of AI, is the CFA designation still future-proof?

Absolutely! While AI automates routine tasks, the CFA designation remains crucial. It provides critical thinking, ethical judgement, and complex decision-making skills that AI can’t replicate. Combining CFA knowledge with AI tools will make you incredibly valuable.

Partham Barot is an ACCA-certified professional. showcasing his expertise in finance and accountancy. he’s revolutionising education by focusing on practical, real-world skills. Partham’s achievements underscore his commitment to elevating educational standards and empowering the next generation of professionals.