FRM vs PRM

FRM stands for Financial Risk Manager and is pursued by individuals who want to make a career as a financial risk consultant, risk assessments manager, risk management analyst, head of the treasury department. At the same time, PRM stands for Professional Risk Managers and is pursued by students who want to become predictive analysts, chief risk officers, investment risk managers, and senior risk analysts.

To get a detailed purview of both the courses, let’s look at the following sections step by step.

1. What is the Financial Risk Manager?
2. What is the Professional Risk Manager?
3. Infographics
4. Role of Risk Management Professionals
5. Exam Requirements
6. Why pursue FRM?
7. Why pursue PRM?

FRM is offered by the Global Association of Risk Professionals (GARP) for risk management professionals looking to gain expertise in risk management practices in the financial services sector.

This credential helps acquire in-depth knowledge for assessing different types of market and non-market-based financial risks and general practices in the field of financial risk management. It offers an overview of risk management practices within the financial services sector and is a globally recognized credential.

The Professional Risk Managers’ International Association (PRMIA) offers PRM certification to enhance risk assessment and mitigation knowledge. It is a highly acknowledged credential for risk management professionals, designed to help them develop a detailed understanding of financial risk management.

This certification focuses on studying the quantitative aspect of financial risk modeling, which plays a critical role in predictive financial analysis, which further helps in emerging risk areas and helps take suitable mitigating measures.

Risk management essentially involves identifying possible risk factors and taking appropriate mitigating steps to avoid or minimize credit risks or other forms of risk an organization might face. Undoubtedly, risk management professionals need to be equipped with the necessary knowledge and skills for the purpose. Many certifications can help validate their risk management skills and help keep them abreast of the latest developments in the field.

Two of the standard risk management certifications are Financial Risk Manager (FRM) and Professional Risk Manager (PRM). Both these certifications are designed to acquaint professionals with the fundamentals of risk management. Still, it would be essential to know what they offer to make an informed choice.

For FRM You Need:

There are no educational requirements, but the candidate should have at least two years of full-time work experience in risk management, including portfolio management, risk consulting, risk technology, or other related areas.

For PRM You Need:

The work experience requirements for PRM are based on the educational qualifications, detailed as below:

• No Bachelor’s Degree – 4 Years
• Bachelor’s Degree – 2 Years
• Post Graduation – No work experience required
• Professional Certifications including CFA or CAIA – No work experience required

FRM is a highly valued risk management credential that has been long in existence compared to PRM and has acquired industry-wide recognition over these years. As a result, those with a fair amount of professional experience and exposure in risk management are better suited for this credential than those new to this specialized field.

Another point to be remembered is that FRM is more broad-based in approaching risk management areas than PRM, making it a better fit for aspirants to prepare for roles like risk assessments managers and head of the treasury department, which require broad-based knowledge of the field.

PRM is undoubtedly another much-valued credential for risk management professionals and is best suited for those interested in developing expertise in the quantitative aspect of financial risk management. One advantage is that no prior work experience in risk management is mandatory to appear for this exam.

It must be kept in mind that both these certifications share up to 80-90% of the learning areas, making it a little hard to decide which certificate should be opted for. However, PRM is slightly more technical and more suited for individuals with a mathematical mind, making it more suitable to prepare for the predictive and risk analyst roles.

In short, both of these certifications help upgrade and validate risk management capabilities while enhancing their potential worth in the eyes of prospective employers. Choose the one that meets your career goals. All the Best!

This has been a guide to FRM vs. PRM. Here we discuss the difference between FRM and PRM and the infographics and comparison table. You can learn more from the following articles –

• FRM and CAIA - which is better?
• CA vs FRM - key differences
• CFA vs FRM - who is the king?
• PRM vs CRM - what's the difference?