Articles

Why Firms Hire Risk Managers

Estimated reading time: 4 minutes

 

Introduction

Have you ever wondered about the benefits of having the Financial Risk Manager certification and who would be interested if you had one?

Well, look no further. We are going to tell you about the various opportunities that can be had in this field and who might be looking for you!

From GARP themselves, here are some of the areas that FRMs are extremely useful:

 

Research

Risk Managers have an impressive grip of both qualitative and quantitative analytical techniques, which allows them to assess complex situations.

Their unique historical perspective gives them an appreciation of the lessons learned from financial markets over the years, they always apply their insights when developing a forward-looking strategy.

 

Trading

These professionals take a comprehensive view of trading opportunities, and adhere to the highest ethical standards.

They have proven their ability to analyze performance on a risk-adjusted basis and to assess the potential impact proposed trades will have on the overall risk exposure of the firm.

 

Model building

FRMs have demonstrated an understanding of models and their limitations. They know how to perform back testing to validate model output, and can conduct scenario analysis and stress tests.

They are trained to take a holistic approach when applying quantitative tools, techniques, and technology for valuation and risk management.

 

Portfolio Management

Risk Managers know portfolio theory and have proven abilities in investment analysis and performance measurement. Their knowledge spans traditional and alternative asset classes and related strategies.

They pair technical and strategic knowledge and use a risk-aware framework to evaluate the qualitative and quantitative factors that drive investment performance.

 

Product Management

These risk experts have a comprehensive knowledge of capital markets and products as well as a fundamental understanding of operational and IT systems, putting them in a strong position to collaborate with traders and business heads.

 

Risk Management

As the gold standard in risk management, the FRM certifies that candidates are skilled in both quantitative and qualitative global risk management theories and practices.

In addition, they take an advanced approach to identifying, assessing, managing, and reporting risk.

 

Audit

Certified FRMs know how to evaluate and determine the reliability of information generated across businesses, offering a valuable perspective when advising management on the effectiveness of internal controls.

They also have an in-depth understanding of global capital markets and can communicate with business heads at a high level.

 

Treasury management

Each FRM has an advanced understanding of the financing tools and techniques used in the valuation and management of a firm’s liability structure.

They are trained in the criticality of risk and liquidity stress testing, and they have the ability to assess the adequacy of a firm’s funding and liquidity policies and procedures.

 

Regulatory compliance

FRMs are well versed in the global regulations currently impacting financial institutions and market behavior.

They can provide an informed perspective on how to achieve strategic business objectives while meeting regulatory requirements.

 

Accounting

FRMs can apply knowledge of financial statements to independently identify potential risks associated with accounting, finance and reporting systems and the integration of operating controls.

 

Advisory services

FRMs have the skills needed to advise clients on risk management practices and controls for clients who are seeking to more effectively manage their balance sheets and maximize risk adjusted returns.

 

Global Finance

These experts provide valuable risk perspectives and insights on investors’ appetite for risk when structuring new offerings to raise capital.

 

Mergers and Acquisitions

Certified risk professionals bring a unique quantitative risk perspective, allowing them to better assess the risk and return profile of potential stakeholders impacted by corporate acquisitions, restructurings, divestitures, and leverage buyouts.

 

In closing

There are so many areas that you can consider as a professional risk manager. Check out the GARP website today and accelerate your career!

 

Thank you!

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