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Attempt now or wait?
There are many questions that an aspiring FRM student would ask themselves. One of them is whether or not to attempt the FRM level 2 examinations as soon as you pass level 1.
There are endless amazing benefits one can get from having the certification. It is the global standard qualification for a career in financial risk management.
It culminates in cutting edge risk management skills, higher salaries and higher-level roles in the risk management profession.
Here are both sides of the story you should consider when going through the FRM course as offered by the Global Association of Risk Professionals, GARP ®:
Reasons to attempt in quick succession
1. The information is fresh in your mind
After passing your first exam, your mental stamina (memory and processing power) will be in peak condition. At this point, if you put yourself to it, you should have an easier time retaining previously studied information.
In addition, it is also important to remember that the second part builds on the knowledge you learned in level 1, and you will unfortunately risk forgetting things if you wait too long to start studying again.
Apart from the additional course materials and further research, there is much that will help you in part 2. Your knowledge and skills are transferable.
Students that wait too long before sitting for their level 2 exams after level 1 often have to go back and revise their part 1 course materials.
2. You may lose momentum
After passing stage 1, you are in a full study mode which took a lot of time to build. You wouldn’t want to lose that by waiting too long to take your exam.
It would be advantageous if you immersed yourself in the next round of materials as soon as you can.
You would have built up the required stamina and would have no difficulty putting in some additional hours of study.
However, if you waited too long, more effort would be needed for your mind and body to re-adjust to the taxing nature of the studies. That re-adjustment could be stressful and a bit depressing.
You have better chances of passing your test if you start studying immediately after level 1. Remember, you can use the exact same study routines that resulted in your excellent performance in part 1.
Additionally, you would have learned how to manage your time effectively and developed how to remember large amounts of information. You would have also mastered the best strategies to approach your exam questions.
In the end, you do risk losing some of these study techniques if you take a long hiatus before coming back for part 2 of the exam.
3. You may not be as motivated as you are now
It takes many hours of study and motivation from your support system. Your motivating factors could be anything from the joy of success to better salary prospects or even the respect and admiration from your peers.
However, as days and weeks pass after completing part 1, your goals might change or your vision for the future might become hazy.
The beauty of taking part 2 exam soon after part 1 is that you get to ride on the same old motivation train. You would already have a support system that will ensure you don’t give up.
You will be close to like-minded people that will add fire to your passion and motivate you to become a certified financial risk manager.
Such support structures might no longer be around when you come back from a long break.
4. You risk life getting into the way
Building on our previous point, the main reason why personal goals change is that new things come up in life. It might be a new job position, a spouse or a baby that comes along and shifts the scales of balance.
When that happens, the typical move would be to prioritize these new things over your examinations.
GARP stipulates that all candidates should sit for the part 2 examinations within four years of passing part 1. However, when life gets in the way, you risk finding yourself procrastinating past the deadline.
You would then be forced to start afresh from if you change your mind in the future.
5. Registration prices may go up in the future
Many examination fees typically go higher as times goes by. This is an unfortunate reality of the cost of living. You can save a significant amount of money if you register early for part 2 after passing part 1 of the exam.
Or you may simply attempt both exams on the same day! Early registration costs US$350 and is usually four months before the actual exam date. Late registration which is a month before exam date will cost you US$650.
6. Just get it over with so you can move on
Many students prefer to power through level 2 right after finishing the first part. It can be exhausting, but you will not lose sight of your goals.
The quicker you can complete these two exams, the faster you can go back to life as a top achiever in the risk profession.
That sense of accomplishment and bright career prospects are worth the pain and the time!
7. A higher job position may be waiting for you
GARP’s qualification is what you need to climb up the corporate ladder in the field of financial risk management. The program sharpens your skills in risk analysis, risk prediction and risk mitigation.
These, plus skills such as critical thinking will make you a golden employee that adds the most value to your organization and its stakeholders.
You may be propositioned for job promotions to leadership and managerial roles where you will get to shape the company’s vision.
However, you can only get there if you pass both part 1 and part 2 tests. Part 1 alone simply doesn’t cut it.
8. Start studying early
You may need a minimum of 250 hours to study for and pass the part 2 exams. By immediately registering for the 2nd level, you save for yourself enough time to go through the course material.
Nevertheless, we hastily add that you may find the second phase to be just as difficult as the first. Last minute studying tactics might lead to automatic failure.
The topics that the exam tests on require a type of knowledge that has been amassed over a long time through structured studying.
Reasons not to attempt immediately
1. You may need a mental break to recover
You risk suffering from information overload by taking the two exams close to each other (or on the same day!). After months of rigorous studying for part 1, you will need a mental break to recover.
Otherwise, the buildup of mental stress might result in a poor outcome in your follow-up test.
The study materials for level 1 of the exam entails over 60 readings while the second requires over 75!. The risk of mental fatigue is high when you don’t give yourself a break between these two exams.
2. You desire time to spend with your family and friends
Understandably, your family deserves your time as well. Oftentimes, they are the motivation for the professional improvement you are working towards.
After many hours of prioritizing for your part 1 studies, it may be best to spend more time with your family before proceeding to the next encounter. This action may also help to clear your head.
Without proper balancing, your certification could be a deal breaker in your family. It can rob time away from your kids and spouse, and if these relationships suffer irreparably, the certification wouldn’t be worth it in the end.
Spending time with family makes them feel appreciated and they will be ready to support you when you go back to studying for part 2.
3. Committing to short term memory versus learning
The whole purpose of the program is to gain and impart knowledge that will improve your efficiency in the financial world.
The world of risk management is shrouded with complex challenges that require a mastery of knowledge and various risk concepts.
Yes, it might help your chances of success if you don’t wait too long to sit for part 2 of the exam. You will probably have a solid game plan for tackling questions.
What you may lack however, is an ability to commit concepts to the long term memory.
It’s true…you may end up with passing scores, but an achievement built on short-term knowledge will not be of long term value to your career.
4. You will have more work experience with time
Consistent work experience in the field of financial risk management can help you pass your examinations.
The second exam comprises of practical questions with studies drawn from real life occurrences in finance and risk.
Thus, instead of taking your second test immediately after your first, you can continue building your work experience and learn on the job. As a direct result of this, you also have a better chance of receiving the FRM title.
Why? The Global Association of Risk Professionals demands candidates have at least two years of related work experience to be a certified Risk Manager. You can use the time between levels 1 and 2 to fulfill this requirement.
5. More time to understand the content
Expect the second round to be a little deceiving. This, as it requires sharp qualitative skills in addition to quantitative skills as well as current risk knowledge. As a result, this requires more time in planning and preparation.
You may miss the connection between concepts if you hurry through the course materials to get done with the exam.
If you take time to go through the materials carefully, you will start to realize the correlation between certain topics. Reapplying knowledge instead of relearning everything will make things much easier for you in the long term.
6. Be better prepared the next time around
It’s the home-stretch and this game requires total commitment. You will need to dedicate time and effort to finding the right study materials or the right third-party course provider.
You will need to go through all your study materials, properly assess the task and create a worthwhile study plan.
A proper plan helps to focus your efforts towards knowledge goals before the exam day. You also have to fit yourself in a like-minded community and find the best study group.
All these require adequate planning and preparation.
7. Considerations for your health
Too much studying will prevent you from engaging in needed physical activities. Moving straight to part 2 after part 1 may build stress that might result in health issues.
Everybody has a breaking point and pushing your limits might be counter-productive.
As a result, it may advisable for you to take time off, pick up a hobby or hit the gym. These are things that candidates often forget, but you can only ignore your health for so long.
Taking time off after the first round is typically a good idea. You don’t want to break down a day before the actual exam date.
8. Why GARP scheduled four years
GARP has structured the examinations into 2 parts. Equally, there are three exam periods every year. What’s more, you are allowed to take a break of up to four years after passing the first test.
The reason for this sequencing is so that candidates can rest and have time to prepare for the next round adequately.
You will appreciate the training and certification more if it fits into your life and enhances your skills at work, rather than forcing you to put everything on hold.
In a nutshell
There are both upsides and downsides to sitting the level 2 exams immediately after passing level 1. Nevertheless, the fact is that you’ll still require many hours of study and practicing questions, just like the first level.
For some, it would make their life easier if they moved to the second right after the first, while for others taking a break would be wise. What’s our final take?
See you in the next one,
The QuestionBank Family