PRM vs CFA

If you are a student or a professional in the finance domain, you would know that there cannot be any comparison between PRM and CFA. Certainly, both courses are different and have different scope and opportunities. But what gets stuck in between is deciding what to take for a concise better prospect that aligns better with the career goals you may seem to have.

This article will help you decide which course is for you. If you like to go into the investment world and thrive in the field, undoubtedly, CFA is the best option. But if you would like to explore the area of risk management, PRM would be the right choice.

In this article, we will articulate everything in detail. You will get to know every nut and bolt of CFA and PRM so that you can make an informed decision.

Professional Risk Management, organized by PRMIA, is one of the best risk management courses globally. It has an international reputation, and it has students from 100 countries. Electing this course may add tremendous value to your professional life enabling essential global exposure in your domain of study.

• Upon completing this certification, you will acquire a graduate-level risk management credential. PRM program is a series of evaluation exams designed for professional risk managers worldwide. It has more relevance as it includes both theory and practicality in its curriculum.
• The best part of PRM is availability for people who have a passion for learning both on and off the job. Thus, the eligibility criteria are set differently. If you do not have a bachelor’s degree, you can still enroll in the course. But you must have four years of work experience. If you have a bachelor’s degree, you need two years of work experience. And, if you have already completed your MBA or MSF or MQF or CFA, you do not require any experience to join the course.

CFA is considered one of the toughest programs globally. So, you may imagine that it is not for the faint of heart. However, students who would like to thrive in the investment domain can join this course.

• CFA has a great international reach. Students from more than 135 countries have enrolled in this program till today. What is astounding is the number of members CFA institute has been till now – 134,762.
• Additionally, the best part of CFA is that you may work while pursuing your course. You need not stress about course completion to get a job, as you can opt for CFA while working on the side. That will help you approach your work better and allow you to learn the course better.
• CFA is a very comprehensive course. Thus, once you complete the course, you will be considered an expert in the investment field. In addition, you may also have the expertise of portfolio management, investment banking, financial analysis, advanced investment analysis, etc.

Let us understand the difference between the two streams with the help of the following PRM vs. CFA ® infographics.

#1 - International Reach:

Both these courses are of international repute. But CFA is more popular and has more global impact than PRM. CFA has students from 135 countries globally and more than one lakh CFA members. At the same time, PRM has students in 100 countries. Though these courses' scope is different, the global approach has a lot of impact and job prospects.

#2 - Eligibility Criteria:

As eligibility is concerned, CFA has a different criterion than PRM. If you have a bachelor's degree or equivalent, you can appear for CFA. But this is not the case with PRM. Instead, there are three possible benchmarks PRM has set for its aspiring students: -

1. If you do not have a bachelor's degree, to admit, you need to have four years of work experience.
2. If you have a bachelor's degree, you need two years of work experience.
3. If you have MBA/CFA/MSF or equivalent qualification, you must have any work experience for admission to PRM directly.

So, the criteria of PRM allow students of all sorts to get admitted to the PRM course. Whereas for CFA, you may not be permitted without a bachelor's degree.

#3 - Fees:

There is a significant difference between the fees of PRM and CFA. For each CFA level, the candidates are liable to pay $700 to $1,000 depending on the time of registration, plus the enrollment fees of $450. Hence, the total cost of the CFA qualification may come around $2,550-$3,450. In contrast, the cost of the PRM qualification is much lower at $1,430, which includes the program fee, application fee, and membership fee.

*plus shipping charges, which vary by geographic location

#4 - Comprehensive approach and applicability:

If we look at these two courses in terms of comprehensiveness, CFA looms. The surface-level knowledge may not help because passing the exam requires in-depth study. But in the case of PRM, the candidates have to clear only two exams, and all are multiple-choice questions (MCQs). Thus, CFA has a more comprehensive approach in its curriculum than PRM. But in the case of applicability, CFA and PRM are both the best courses in their domain of study.

Topic Areas / Weights 

PRM

The following table showcases the details of PRM exams: -

CFA

Below are the CFA® Topic Areas in each level.

#5 - Pass Percentages: 

Let us have a look at the passing percentages of PRM students. To pass, the minimum rate you need to score is 60%. Till now, 65% of all students have got the PRM designations. Individual exams have pass rates between 59% to 78%. In 2019, Level I, Level II, and Level III exams' pass rate was 41%, 44%, and 56%, respectively.

CFA® Level 1 Exam Passing rate is closer to 40%

CFA® Level 2 Exam Passing rate is closer to 44%

You have a 50:50 chance of passing the CFA® Level 3 Exam

#6 - Job opportunities: 

By all means, both these courses are world-class. However, if we compare these two courses, CFA is better than these two regarding job opportunities. Yes, the comparison may not be on a similar measuring grid, and the approach of study and exam is also different. But if a student wants to pursue the course from the perspective of job opportunities, CFA will yield more benefits than PRM. That does not mean you should not opt for PRM. As CFA has more appeal and popularity, it naturally stands out.

Once you complete the PRM course, the opportunities are plenty. You do not need to worry about getting placed. Instead, have a look at the options available after you complete your PRM exam. That is a glance at the positions where PRM students have been placed successfully after completing their PRM exam.

source: https://www.prmia.org/faq/prm#prm5

For CFA, there are many opportunities. For example, a recent survey by the CFA® Institute noted that the CFA® Charter holders primarily work as Portfolio Managers (22%), Research Analysts (14%), and Chief Executives (7%).

source - CFA® Institute

The most important reason for pursuing PRM is its brand value and international recognition. It stands out in the risk management profession because the top-notch universities also encourage their students to PRM.

• PRM is easy to complete and requires studying and understanding the subjects. But you may complain that handling four and 10+ subjects are not similar. Moreover, every exam you need to go through in PRM has only multiple-choice questions.
• To obtain certification by an international brand requires thousands of dollars. But to pursue PRM, you need to pay between US $1,100-$1,250. You may give all four exams and also receive a PRM handbook.
• You only need two years to pass all four exams. That means you have six months for one subject. If you study hard and work on your improvement areas, PRM would be easier. Very few courses in the world have such a systematic and convenient approach.

• You must know that CFA is not the course for everyone. Especially those who have faint hearts. CFA needs deliberate study and willingness to go the extra mile. Moreover, it would help if you studied all subjects initially. Yes, the approach would be different at each level. But the same toughness of this program helps to pierce the noise and creates credibility.
• CFA is for those who believe in compound interest. As you would be in the investment domain, you will not earn much money immediately. But if you persevere and invest in investments (your domain), eventually, you may make much more than others in the finance domain.
• Pursuing CFA is an achievement. Hence, it holds an international reputation, and members from 135 countries have enrolled for the course. The reason is preparing its students for excellence. CFA is not for you if you want a quick fix or magic bullet. But if you believe in steady progress in a reasonable time, you should opt for CFA.

The idea is not to choose something over others. But the idea is of alignment. After reading everything, the option which seems true to your heart and career aspiration, go for it. It would most probably be the right choice.

This has been a guide to a PRM vs. CFA. Here, we have discussed the top differences between PRM and CFA and infographics and a comparative table. You may also have a look at the following articles:  –

• PRM vs. FRM - Differences
• CRM vs. PRM - Compare
• CFA vs. FRM - Which is Better?
• CFA vs. CQF