CIPM vs FRM

CIPM offers job opportunities in investment banks, research firms, investment management, plan sponsors, GIPS verification firms, etc. In comparison, FRM provides job opportunities to work as an estate planner, retirement planner, risk manager, financial manager, etc.

In this comparison, we discuss the two certifications – CIPM and FRM.

Reading time: 90 seconds

Let us understand the difference between the two streams with the help of the CIPM vs. FRM infographics.

CIPM is an international course available for professional candidates and people starting their careers. CFA Institute offers CIPM mainly comprised of investment performance measurement and its attributes, which means it is a theory that studies the models to explain those processes.

Concisely, some global investment firms are subjected to various regulations, international laws, and market customs that state how investment performance should be measured and advertised.

The global investment standard, GIPS, is a set of rules laid down by the management industries to monitor the continuous growth in the worldwide patchwork of regulations covering investment return calculations and advertising. Since GIPS is the professional body of knowledge, it also tests the field's people or organizations' competency. This way, the CFA formed the CIPM association.

Since this is a professional course for people from the financial field, one must adhere to professional ethics and conduct laid down by the CFA and prove one's competence in the scope.

Financial Risk Manager (FRM) is offered by the Global Association of Risk Professionals (GARP), an international organization engaged in promoting industry standards in risk management. FRM focuses on financial risk management, making a highly specialized certification program. That makes it suited for individuals planning to gain expertise in financial risk management instead of adopting a generalized approach. In addition, an increasing number of global organizations are looking for accredited risk professionals to add that competitive edge to survive in the modern industry.

If you are thinking about appearing for a professional course, there are certain requirements. Remember, these are professional financial examinations. To know the criteria, peep into the notes below.

1. Experience of more than two years in calculations, showing investment results, analyses, giving consultation services, evaluating different investments, legal and regulatory services, directly supporting investment either technically or through accounting, standard verification and compliance experience of GIPS, teaching investments, or even monitoring people dealing in investments either directly or indirectly.
2. Else, you require more than four years of experience in the industry of investments that usually involves applying and evaluating the financials of people, working on economic and statistical data of clients, managing marketing for investment products and services, monitoring the investment firms to make sure they comply with the regulatory standards, evaluating and recommending investment managers.

FRM has three requirements. We will explain in detail: -

1. Clearing the FRM examination Part I.
2. You must clear Part II within four years of passing part I.
3. You should complete two years of full-time experience in financial risks.

Besides, the above three criteria, the candidate must submit a letter describing his professional role in managing financial risk in about 4 to 5 sentences. Also, this application needs to cover ''My Programs'' within your account. Finally, the work experience submitted need not be more than ten years before appearing in the FRM examination part II. Relevant work experience is counted as a research analyst in financial risk management, financial risk, academic teaching, and practitioners.

The work experiences like teaching students, part-time jobs or internships, or any other jobs pursued during school days will not count. The candidate must possess five years of submitting his work experience after clearing their FRM part II. If not, or the candidate fails, they will have to reappear for FRM part I and II examinations, along with paying the fees again. He cannot use the FRM certification unless the association has certified him.

CIPM certifications help in the highly specialized investment industry and also provide an upper hand in investment decision-making processes, firm's asset-gathering, a position as an analyst at an accounting firm with a GIPS verification practice, or an analyst's work at an investment consulting firm that conducts manager searches and monitors institutional clients' investment results. As we know that the prestigious CFA institution backs CIPM, the best minds in the investment industry who are involved, dedicated, ethical, knowledgeable of investment performance, and aware of the GIPS "cold." Salary is the most important base in any career. So, according to a survey in 2016, a candidate may get paid anywhere between $100 to $150k in the United States of America.

Becoming an FRM has perks and advantages. One of the most renowned qualifications makes the individual an all-rounder in domains involving risks like operational, market, credit, or investments. Also, as an FRM-certified individual, it gives you an edge over your peers and widens your horizons like an extra feather in your cap.

The benefits of FRM certification are: -

• Reputation enhancement.
• Development of knowledge and expertise.
• Making it noticeable to employers that sets you apart.
• Demonstrating your leadership at work.
• Increasing your opportunities across the globe.

Salary is the basis of everything. So, if you are in the States, your salary can range anywhere from $250,000 to $300,000 per year. In India, your salary per year may be anywhere between 9-12 lakhs per annum, and you receive additional perks like paid vacation, bonuses per year, pension life, and medical insurance.

A few employers for FRM individuals are UBS, Deutsche Bank, and HSBC, and auditing firms like Ernst & Young (EY), PricewaterhouseCoopers (PwC), KPMG, etc.

Career prospects for an FRM executive are Risk Management Analytics Consultant & Personal Banking, Senior Operational Risk Manager, Corporate Risk COO & Risk Officer for Global Asset Liability Management, Risk Manager, Prudential Risk, to name a few. So, FRM-certified individuals are in huge demand, and in its niche market, very few people are involved with the rite certifications. So, if you have an FRM certification, you have the edge over your contemporaries.

Suppose you are interested in studying investment performance and managing the same for the public. In that case, this is just what you would like to do a certification backed by the CFA is an absolute yes when it comes to making a career in finance. This certification helps you gain a good start package, great recognition, and grow well in your professional aspects. Moreover, this course is not that difficult to start with, confirming if you work a little hard, chances are you might fairly crack the examination.

Risk management is a term for finance people. All the investments revolve around this aspect for a risk manager who balances to minimize risk. And, if you think you can achieve this big responsibility for your client's finance, you do not have a better job than this. All in all, if you desire to reach the high designations of financial risk management, this course will help you get your admired position.

• CIPM vs. CAIA
• CIPM vs. CFA
• FRM vs. Actuary
• FRM vs. PRM
• FRM Salary | India | USA | UK | Singapore | Top Employers