How to Become a Certified Financial Risk Manager (FRM®)
- Financial Risk Managers (FRM) receive accredited by the Global Association of Risk Professionals (GARP).
- FRMs specialize in assessing risk for major banks, insurance companies, accounting firms, regulatory agencies, and asset management firms.
- FRM certification requires passing a two-part exam and completing two years of work experience in financial risk management.
An FRM identify threats to assets, earning capacity, or the success of an organization. FRMs may work in financial services, banking, loan origination, trading, or marketing. Many specialize in areas like credit or market risk. FRMs determine risk by analyzing financial markets and the global environment to predict changes or trends. It is the FRM’s role to develop strategies to counteract the effects of potential risks.
To receive the FRM designation, candidates must successfully complete a comprehensive, two-part exam and complete two years of work experience in financial risk management.
The exam is recognized in over 90 countries and is designed to measure a financial risk manager’s ability to manage risk in a global environment.
The FRM Exam covers the application of risk management tools and techniques to the investment management process. The questions are practical and related to real-world work experiences. Candidates are expected to understand risk management concepts and approaches as they would apply to a risk manager’s day-to-day activities.
The exam tests knowledge of the tools used to assess financial risks, such as quantitative analysis, fundamental risk management concepts, financial markets and products, and risk models. The FRM Exam Part I focuses on the essential tools and concepts required to assess financial risk. Passing the FRM Exam Part I is the first step for an individual to become a Certified FRM.
FRM Exam Format
The FRM Exam Part I and Part II are pencil-and-paper, multiple-choice exams. They are offered solely in English, twice a year in May and November, at over 100 exam sites around the world.
Body of Knowledge
Part I
A 100 question multiple-choice exam, the FRM Exam Part I focuses on the tools used to assess financial risk: quantitative analysis, foundations of risk management, financial markets and products, and valuation and risk models. Part I is always offered in the morning and must be completed in four hours or less.
A 100 question multiple-choice exam, the FRM Exam Part I focuses on the tools used to assess financial risk: quantitative analysis, foundations of risk management, financial markets and products, and valuation and risk models. Part I is always offered in the morning and must be completed in four hours or less.
Part II
The FRM Exam Part II is an 80 question multiple-choice exam, emphasizing the application of the tools acquired in Part I: market, credit, operational and integrated risk management, investment management as well as current market issues. Part II is always offered in the afternoon and must be completed in four hours or less.
The FRM Exam Part II is an 80 question multiple-choice exam, emphasizing the application of the tools acquired in Part I: market, credit, operational and integrated risk management, investment management as well as current market issues. Part II is always offered in the afternoon and must be completed in four hours or less.
Never leave an answer blank. A blank answer has a maximum point value of zero. A randomly marked answer has an expected value of 0.25 points, and if you can eliminate one bad answer, this value increases to 0.33 points. You will not be penalized for wrong answers.
FRM Exam Dates and Registration Periods
Examination Dates:
- May 16, 2020
- November: Date TBD
Final deadline exam registrations—May 2020:
- Early Registration – Ends January 31, 2020
- Standard Registration – Ends February 29, 2020
- Late Registration – Ends April 15, 2020
Final deadline exam registrations—November 2020:
* Registration Dates are TBD
* Registration Dates are TBD
FRM Progam Fees
Enrollment for the FRM exam requires a one-time enrollment fee of $400 (USD), due when you register for your first level I FRM exam, as well as individual exam registration fees.
- Early – $425
- Standard – $550
- Late – $725
Requirements to Earn the FRM
- Register to Take the Exam
- Pass FRM Exam Part I
- Register for Part II
- Pass FRM Exam Part II
- Demonstrate two years of relevant work experience
Please note that if a candidate elects to take Part II on the same day as Part I, their Part II Exam will not be marked by GARP unless they first pass Part I
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