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.Â
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 recognized 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 specialized credential focusing on risk management. FRM-certified professionals are well-versed in identifying, assessing, and mitigating financial risks within organizations. This designation is highly valued in the banking, insurance, asset management, and regulatory sectors, where risk assessment plays a critical role in decision-making.
Curious About CFA vs FRM?
CFA vs FRM: Course details and future scope
| Differentiators | CFA | FRM |
| Organizing Body | CFA Institute | GARP: Global Association of Risk Professionals |
| Course Duration | 2 to 3 years | 1 to 2 years |
| Difficulty Level (passing percentage) | CFA Level 1 22% – 49% | 45% for Part I and 63% for Part II |
| Eligibility Criteria | If you are in the final year of graduation, you can appear for the CFA level 1 examination. However, in certain cases, you may be eligible for CFA without graduation provided you have a minimum of 4 years of relevant work experience. | An undergraduate in the final year of their degree can also apply for the FRM course. However, you need to clear your part 1 to appear for the part two examinations. Within the 5 years of your learning journey, you must also have 2 years of relevant work experience. |
| Career Scope | Job profiles you can explore
Hedge Fund Manager Investment Banker Portfolio Manager Corporate Analyst Financial Analyst |
Job profiles you can explore
Risk Analyst Risk Manager Credit Risk Analyst Market Risk Analyst Regulatory Risk Analyst |
| Top Hiring Firms | JP Morgan Chase
HSBC Morgan Stanley CitiGroup Morgan Stanley |
PwC
ICBC JP Morgan Chase Consulting Firms Hedge Funds |
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
While the CFA course is broad in the field of finance that 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
| Certified Financial Analyst | Financial Risk Management |
| A career in the exciting field of investments | Decision maker for various companies |
| Helps generate revenue for the firm | Helps protect the revenue of the firm |
| Brings you a broad range of opportunities | Brings you specific opportunities as per your skillset |
| Tough to clear, this profession is quite an in-demand | Comparatively easier to clear |
| High compensation with benefits | High compensation with more weightage |
| Pay range between INR 20,00,000 to 35,00,000 lpa | Pay range between INR 20,00,000 to 30,00,000 lpa |
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 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 recognized 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. 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 opens new doors to quality employment exponentially. However, keeping your interests in mind we’d recommend you to 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 vs FRM professionals enjoy competitive salaries, with CFA salaries generally having broader growth potential due to wider career opportunities, while FRM salaries are steady in specialized 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.
FAQ’s on CFA vs FRM:
Is part 1 of FRM covered in the CFA program?
Almost 55% of your FRM syllabus is covered in the three levels of your CFA studies. That’s why most students prefer taking up CFA exams and FRM together as studying for the dual certification becomes easier.
Are there any exemptions for CFA?
Unfortunately, there are no exemptions for CFA after CA. However, if you are a qualified CA, then it would be easier for you to clear your CFA examinations as 60% of your CA syllabus reflects CFA level 1.
Who earns more, CFA or FRM?
The average salary range of a CFA is quite similar to that of an FRM. However, since CFA as a career offers more growth opportunities, it’s possible for CFA’s to earn more with experience.
