How to Earn Your FRM Certification in Financial Risk Management

You can consider becoming a certified Financial Risk Management if you wish to strengthen your credentials as a risk manager, advance in your professional development, and possess particular attributes (FRM).  

Employers can see that you take risk management seriously and that your expertise has been verified by global professional standards by looking at your FRM designation, which is offered by the Global Association of Risk Professionals (GARP). You must also succeed on the FRM Exam, which verifies your expertise.

How do you achieve FRM certification?

Step 1: Sign up for Part I of the FRM Exam

Anyone can sign up to take the exam; no educational requirements apply. The exam is divided into two sections. Exam windows for the Part I and Part II FRM are in May and November respectively. There are two registration periods, early and standard, with different prices for taking the exam. If you choose to attempt it, keep in mind that your Part II answers will only be graded if you passed Part I. It is possible to take both parts of the exam on the same day.

Step 2: Pass FRM Exam Part I

Passing Part I of the exam takes dedication and commitment. Of those who took Part I between 2010–2017, the average pass rate was 46%. So, plan to spend at least 200 to 240 hours studying. GARP reports that the average time of study is 275 hours and that some candidates study up to 400 hours.  

Part I of the FRM Exam has 100 equally weighted multiple-choice questions. You’ll be notified when your results are available in your GARP candidate portal.

FRM Part I Exam Topics

• Foundations of risk management
• Quantitative analysis,  
• Financial markets and products
• Valuation and risk models
  

Step 3: Register for Part II

GARP gives you up to four years to register after you receive your notification that you’ve passed Part I. Check www.garp.org for the costs and schedules, and register within the time window indicated.

Step 4: Pass FRM Exam Part II

Part II consists of 80 equally weighted questions. Of those who took Part II between 2010–2017, the average pass rate was 57%. Passing Part II takes the same amount of dedication and commitment as Part I, so put in your 240 or more hours of study. This will better the odds that you’ll get good news when your results are posted in your candidate portal.

FRM Part II Exam Topics

• Market risk measurement and management
• Operational risk and resiliency
• Credit risk measurement and management
• Liquidity and treasury risk measurement and management
• Risk management and investment management
• Current issues in financial markets
  

Step 5: Get Two Years of Experience

The final step in becoming a Certified FRM is demonstrating that you’ve had at least two years of full-time work experience in the field of risk. Finance-related vocations are the only ones considered as acceptable work experience. Examples include portfolio management, industry research, trading, and risk consulting.

To demonstrate this experience, you describe your professional role in financial risk management in at least five sentences and submit it to GARP within five years of passing Part II of the FRM Exam. After you submit your description, GARP will confirm that you are a Certified FRM holder and have been included in its registry.

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