To become a financial risk manager, one must pass a two-part exam administered by the Global Association of Risk Professionals (GARP) and have two years of experience in a financial field. GARP also offers a continuing education program. The demand for financial risk managers is expected to grow.
To become a financial risk manager (FRM), a person must first earn certification from the Global Association of Risk Professionals (GARP). To receive FRM certification, a candidate must pass a two-part exam administered and approved by GARP. Candidates generally fail Part I or Part II of the certification exam, and GARP estimates that there are only 24,000 certified FRM holders in the world as of 2011. After passing both parts of the exam, a candidate must earn two years of experience in a financial field such as economics, portfolio management, academic research, auditing or risk consulting.
A person can enroll in a course through an approved financial institute in order to prepare for the certification exam to become a financial risk manager. They can only register to take the exam through the New York office of the Global Association of Risk Professionals. Generally, it is recommended that a person do 150 to 200 hours of study to pass Part I of the exam. Part I of the test covers the candidate’s knowledge of quantitative analysis, fundamentals of risk management, financial markets and products, and valuation and risk modules. This portion of the test usually contains hypothetical market risk issues that the candidate must analyze and resolve.
Part II of the exam to become a financial risk manager covers measuring and managing market and credit risk, operational and integrated risk management, investment management, and current issues in global financial markets. An additional 150 to 200 hours of study are recommended to prepare for this portion of the exam. Parts I and II of the exam are administered over an eight-hour period. Candidates can usually use a GARP-approved business calculator when taking the tests. Upon receiving a passing score on both parts of the test and completing two years of work as a financial risk manager, a candidate will receive an official certification from the Global Association of Risk Professionals.
GARP also offers a continuing education program after a candidate succeeds in becoming a financial risk manager. Professionals often continue their studies beyond the FRM certification in order to keep up with market changes. Financial risk managers are highly sought after by financial firms because the training and skill sets they have are so specialized. Due to the difficulty of obtaining certification, hiring managers are more likely to give preference to a candidate who has achieved certification. The demand for financial risk managers is expected to grow well into the 21st century, as risks in global financial markets become more complex.
Protect your devices with Threat Protection by NordVPN
