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The FRM course is a globally acknowledged professional challenge administered by the Global Association of Risk Professionals (GARP®).
It is the most valuable title in the field of Risk Management, and as such, its exams are hard to crack.
But, for those that do, the opportunities for career advancement are immense. If you have the motivation and dedication, this program could be your ticket to senior leadership.
Requirements by GARP
Fortunately for many, the governing body doesn’t stipulate any particular academic credentials to sit for their exams. You can take these tests straight out of college or while still in college.
The bicameral structure of the course allows for it build on knowledge from a beginner level to the more advanced among us. Armed with a basic knowledge of mathematics and much determination will get you through.
The completion of this challenge often serves as the doorway into finance for career hoppers, including engineers, educators, marketers, and many other personalities.
Whether you are in school or recently graduated, working in finance or a non-related field, you can register by visiting the Official GARP Website.
1. No work experience needed to do the exam
Work experience is not a pre-requisite for exam sitting (not so for getting the title however). Some students taking the course find themselves working and already have the right amount of industry experience.
That said, the course is expertly designed to create a reasonable entry-point for both experienced and non-experienced candidates. Level 1 will cover the basics of risk and level 2 takes things a notch higher.
Many of the mentioned candidates with experience often say they should have pursued the certification earlier.
For fresh graduates and those still in college, getting this qualification earlier will give you the validation you need to get employed faster and by reputable institutions.
After accreditation, you will have the edge compared to your entry-level peers. This will also enable you to glide up the corporate ladder much faster.
In light of the depth, focus, and qualities of the program, university professors around the world are advising to pursue this qualification to those who are interested in the world of risk management.
There are several advantages of pursuing the course while earlier in college, among them; overlapping topics with finance-related courses.
At that time, you also have a higher ability to concentrate as opposed to having to balance family, work, and part-time study.
For those looking to switch careers, the zero work experience requirement to sit the exam is a boon. It is a chance to get into the rewarding field of finance, whatever your background may be.
This endorsement will help you hit the ground running. So, if you are thinking about risk management or even some related area, JUST DO IT.
2. Work exposure required for endorsement
After passing level 2, the last step is to gain qualified work experience. At this point, GARP makes it mandatory for successful candidates to obtain not less than two years of experience for the title.
The experience has to be in finance-related occupations, including research, education, and consulting, or portfolio management, among others.
The work experience you might have garnered before you started the program can also apply in this case.
Provided it’s in the field of finance and goes back no more than ten years before you signed up for the course, you will receive the certification.
The process of proving the work experience includes describing your roles to the governing body before joining their Network. The description has to detail the relevancy of your role in regards to risk management.
You are required to submit this no more than five years after passing your level 2 exams. After you submit the above proof of work experience, GARP will review and confirm you as a certified holder.
You can then go on to be a mover and shaker in your field.
FRM Requirements on your part
As you will see below, the list of requirements around your personal effort is much longer than that of the governing body.
Both part 1 and part 2 of the exam takes months of preparation each. After passing, you will have to comply with the two-years-of-work-experience requirement. The bottom line is that it takes a little time.
Aside from time, the program is a testing experience. Industry leaders and past candidates concur that the exam is one of the most challenging in the industry. One must invest hundreds of hours in studies to crack this beast.
But, even after becoming a book warm for months, success doesn’t come automatically. Nothing is guaranteed, especially given how the administrators can lean more towards the practical application of concepts.
Therefore, the complex exam questions might be nothing like what you have previously encountered. The beauty of this task is that you get additional chances for retakes if you do not succeed on your first try.
Maintain patience and focus on the bigger picture.
2. Analytical thinking
As hinted above, this program is practical-oriented one. What happens is that GARP analyses the industry environment and identifies the complex challenges in financial risk management.
The committee then sits down to design a syllabus (and exam questions) that equip you with (and test your) abilities to provide solutions to these problems.
Success in these exams therefore requires you to have an analytical mind. You will need the ability to break down textbook knowledge and apply it to practical scenarios.
Yes, it is going to be tough, and some of the questions might leave you blank, but that’s the kind of pressure that forges a professional.
3. Being comfortable with numbers
Math and statistics form the background of financial management. This field (and course) needs students that are comfortable and quick with numbers.
From level 1 to level 2, the risk study concepts get deeper into analysis and prediction, all requiring computational skills.
Quantitative analysis questions in the exam also carry weightier points in the syllabus and potential candidates should know this.
4. Studying for long hours
You will need to study for about 300 hours to pass part 1 of the risk manager exam. Part 2 will take the ’average’ student around the same time to complete their studying.
However, some candidates might need more study time for these exams. It is imperative that you know your strengths and weaknesses.
So, to attain the highly regarded certification, you might need to ignore social media for a while and bury your face in books. Not many people have the drive to lock the doors, switch off the phone, and concentrate on a book.
But for those who do, the exam often turns out not to be as complicated as it is famed.
5. Being able to balance
There are almost a dozen topics all packed with heavy concepts from Quantitative analysis to Liquidity and Treasury Risk Management.
Be that as it may, this is not the time to lose your friends, and it certainly doesn’t have to get there.
We understand that your family and social life are just as important as the career you are pursuing. One, therefore, has to be shrewd in dividing themselves between studies, family, friends, and even work.
It is possible to strike a study-work-life balance when pursuing the certification. But it’s not easy. It takes discipline and commitment.
One would need to:
- Be a good planner
- Be highly flexible
- Be strict on time
- Be a doer, not a procrastinator
6. Knowing how to accept failure
Failure is a path to growth, and this program gives chances to try again. The only thing required of you is persistence. Amid failure, one needs to remember the benefits that drove them to register in the first place.
So, you will study hard and do your best in the exam, but you should also be willing to accept the results…whatever they are. You can always try again if for some reason you fail to pass in the first round.
You can do better by allocating more study time in your subsequent attempts, analyzing your areas of weakness, and downloading official study materials plus third-party questions.
7. Becoming a team player
Another practical requirement is the ability to collaborate with others in your studies. This underscores the comprehensive nature of risk, and how (in the real world) risk management requires ‘all hands on deck’.
You might have solid knowledge in one area, but lacking in another. Study groups enable you to improve areas of weakness by tapping into the knowledge and perspectives of others.
In the process, you also help them improve. But remember, to fare well in groups, your social skills and ability to get along with others should be on point.
8. Being willing to spend on learning
You can ace both exams in the first attempt if you have the right study materials. There are candidates who can do this without the help of others and there are others who need help.
Both scenarios are just fine. Just know which group you belong to.
Third-party questions and mock exams will add to your costs but can be critical to building your experience. Your study will not be complete without testing your knowledge.
You won’t feel as confident walking into the test room without knowing where your weaknesses are, and the assurance that you found them and took measures to correct them.
9. Becoming a fast learner
It’s been established that you don’t need a background in finance to pursue the risk manager title. But, are you ready to quickly catch up on the necessary concepts?
Success in the exams requires candidates to be learners. Within a few months, you should have amassed the right knowledge needed to tackle this hurdle.
You can learn concepts faster by:
- Adopting fast-reading techniques
- Studying with friends so they can explain difficult topics
- Getting in-person coaching or tutoring from an expert
- Attempting MANY questions before doing the test
10. Having a goal-oriented mindset
Success in risk management requires strategy and foresight. One of the requirements for success is, therefore, proper planning.
Three or four months may sound like a short time to build expert-level skills, but not if you strategize and set clear goals.
You will need to work with a calendar and divide your learning objectives by the time you have. You will then need to test yourself regularly after each topic.
Testing helps to ascertain that you have not only managed to study the topics within a reasonable time frame but that you also gained the right depth and practical knowledge on the subject matter.
By being goal-oriented, the benefits of the designation will motivate you to stick to your study schedules. You will also have the fortitude to keep trying even if you fail.
With focus and commitment, all goals are achievable.
11. Keeping abreast with industry happenings
For relevancy, GARP tunes their risk manager program to what is happening in the industry. The syllabus covers changes in regulation, financial crises, flash crashes, tech innovations and associated risks.
In short, they cover complex dilemmas that risk managers will face. A solid grasp of industry knowledge, therefore, increases your chances of success and subsequent certification.
Relevancy in the FRM program is so much that an entire book is dedicated towards current affairs in the industry. (See: Current Issues in Financial Markets)
Candidates, therefore, need to pay close attention to financial news and corporate newsletters. Nevertheless, being informed is not the end of it.
One must be able to apply their teachings to the issues and generate worthy solutions.
When all is said and done, this program is not about passing exams, but having the skills and aptitude to lead in the identification, evaluation, and management of risk.
Highly skilled individuals will turn risks into opportunities —this is what the risk manage title is about—and this is what will guarantee your success.
Never give up,
The QuestionBank Family