The Global Association of Risk Professionals (GARP) is a globally recognised membership-based organisation for risk management professionals. GARP offers the Financial Risk Manager (FRM) certification, a coveted designation for aspiring risk managers.
However, to earn the certification, candidates must clear two levels: the FRM I and FRM II exams.
Let us look at the FRM I and II exam patterns and understand if it is feasible to take them together.
FRM Exam Overview
The FRM exam is divided into Parts I and II. Both have multiple-choice questions. A candidate gets the FRM certification by clearing both the papers and by demonstrating two years of relevant work experience.
Candidates must appear for the FRM Part I examination before Part II. They can gather full-time work experience before or after passing the FRM exams.
Understanding FRM Exam Part I and Part II
“Should I take FRM 1 and 2 together?” is a common question many FRM aspirants ask. Before we go on to answer this question, let’s look at the scope of each part:
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FRM Exam Part I
Candidates need to answer 100 multiple-choice questions in the FRM Part I exam. The questions are about the tools used to assess financial risk, including quantitative analysis, foundations of risk management, valuation and risk models and financial markets and products.
The FRM Part I exam is held in May, August and November.
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FRM Exam Part II
The FRM Part II examination has 80 multiple-choice questions. The questions emphasise the applications of the various tools in Part I, like credit risk, market risk, liquidity and treasury risk management, resiliency and operational risk, current issues in financial markets and investment management and risk management.
Like FRM Part I, the FRM Part II examination is held in May, August and November.
Candidates must know that the FRM exam process follows a sequence. Candidates must pass their Part I exam before their Part II exam is graded.
Many FRM aspirants take the FRM Part II examination before receiving a passing score in the Part I exam. However, their Part II exam will not be graded if they fail to clear Part I. Candidates must appear and pass the FRM Part II exam within four years of passing Part I.
Should You Take FRM Exam Part I and II Together?
Many FRM aspirants plan to appear for their FRM Part I and II exams together. However, experts offer a different suggestion. They recommend not taking the Part I and Part II exams together but within a gap of a few months.
Not passing the Part I exam means that Part II will not be graded. Therefore, it is better to concentrate on the Part I paper, clear it and then appear for Part II.
The FRM curriculum is broad, covering various risk management topics and aspects. Appearing for both papers together might be taxing physically and mentally as you will need thorough preparation of the whole syllabus of Parts I and II.
The FRM examination fees remain the same whether you take the papers together or separately. Unfortunately, if you do not pass the Part I exam, the fees for both exams will be wasted.
Conclusion
It is safe for aspirants to take the FRM Part I and Part II exams separately. Candidates get more study and preparation time for both exams. When taken separately, the chances of passing the FRM exams are also high. With the risks outweighing the benefits, it is recommended to take FRM exams separately.
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FAQs
- How much preparation time is adequate for FRM Part II?
GARP recommends at least 275 hours of study for FRM Part II exams. You have to adjust your time depending on the number of hours you can dedicate to studying every day.
- What are the job areas I can explore after FRM Part II?
As a certified FRM, you can explore positions in global asset management firms, consulting firms, hedge funds, regulatory organisations, banks and other financial institutions. FRMs are likely to be Risk Managers, Risk Analysts, Operational Risk Managers, Regulatory Risk Analysts, Credit Risk Analysts or similar roles.
- Is CFA and FRM a good combination?
FRM aspirants specialise in risk assessment and management. CFAs, on the other hand, excel in finance and investments. CFAs looking to specialise in risk management will find this to be a great combination.
