CFA® Designation vs. FRM® Designation vs. FSA (Actuary)

Done/Almost Done with Campus? What is the next move?

It is my assumption that whoever stumbles upon this article is either a final year student or a recent graduate. Graduating from University is both a happy and confusing moment for any young person. An individual is excited about being finally “done” with their studies. “No more books, no more lectures, no more assessments, no more tests, no more early mornings,” is generally what any graduate will think. This is, however, never the case because learning does not stop. Graduating from University is just but a stepping stone towards other future learning possibilities. Graduation can also bring with it confused feelings. The confused feelings will come about due to the possible prospects of failing to secure a job. In this new era of knowledge, at least 4 in 5 people have completed their studies and have graduated with good grades. Consequently, the competition for securing employment in any firm is very high. Employers will, therefore, carefully scrutinize any job seeker and will disqualify a job seeker on very petty grounds.

In a bid to remain competent in a world full of qualified candidates, a person may opt to pursue professional papers. Professional papers are certifications offered by various professional bodies around the world. A person is certified by a professional body upon completion of a series of requirements. The requirements vary from body to body. Some certifying bodies only require a candidate to pass their exams. Others may require proof of work experience gained by a candidate in their preferred areas of practice in addition to having attempted and passed all their exams.

Professional Certifications

In this article, we look at the various professional certifications that a candidate may pursue. We outline all that a candidate needs to know about the various examinations so as to help candidates make a wise and informed decision on which certification suits them best.

The Costs of Pursuing Professional Papers

Professional certifications are very costly, especially if a candidate attempts a paper more than once. Some of them equally require candidates to register within very short deadlines, failure to which candidates pay extra for registering late. However, these costs should not deter any candidate from attempting the examinations. This is because the costs of pursuing any professional paper cannot compare to the value that comes with the certification after completion of the examinations.

The Role of Analyst Prep

AnalystPrep will help you minimize the chances of repeating any professional examination, and by so doing, save you time and money that would have been paid to register for re-sits of a failed paper. This will also help shorten the time span needed to complete a certification. AnalystPrep will accomplish the aforementioned goals by helping candidates adequately prepare for each of the professional papers.

This article will give an overview of some of the most coveted certifications offered by the below professional bodies:

1. Chartered Financial Analyst® Exams (Study materials: https://analystprep.com/cfa/)
2. Financial Risk Management® Exams (Study materials: https://analystprep.com/frm/)
3. Society of Actuaries® Exams (Study materials: https://analystprep.com/actuarial-exams/)

Chartered Financial Analyst Exams

Founded in 1947 and headquartered in Virginia in the United States of America, CFA Institute is an internationally recognized institute that offers postgraduate professional certification. CFA Institute offers CFA® exams.

What is a Chartered Financial Analyst?

The CFA® designation is an unrivaled internationally recognized certification and is the most coveted designation for individuals with an interest in working in the Finance and Investment Industries.

CFA® exams are offered in three levels (Level I, Level II, and Level III). Upon completion of the three levels of the CFA® exam and having demonstrated working experience of a minimum of three years, an individual gets awarded the CFA® charter and thus becomes a Chartered Financial Analyst®.

Requirements

A candidate needs to have either completed university training or in their final year of university training for him/her to qualify for level I of the CFA® exam registration.

Level II of the CFA® exam can only be registered for upon attempting and passing Level I of the CFA® exam.

Level III of the CFA® exam equally requires a candidate to have sat and passed Level II of the CFA® exam.

CFA Costs

To pursue the CFA® designation, a one-time enrollment fee of USD 450 is needed. Thereafter, a registration fee of USD 700 will be needed for each of the CFA® exam levels for early registration, USD 1000 for mid registration and USD 1450 for late registration.

To ensure that exam costs do not discourage potential candidates from pursuing the CFA® designation, the Institute offers a number of scholarships to needy and qualified candidates as discussed in one of our earlier articles.

Exam Dates

The Level I of the CFA® exam is offered twice a year – in June and in December. Levels 2 and 3 are offered once a year – on the first weekend of June of every year – in test centers located all over the world.

CFA® Exam Pass Rates

Statistics from the most recent CFA® exams held showed that out of the candidates who attempted the exams, 41% of those who sat for CFA® Level 1 passed, 44% of the candidates who sat CFA® Level 2 exams passed and 56% of those who sat for CFA® level 3 passed.

CFA® Charterholders Salary Scale

CFA® charterholder salaries vary according to job title and number of years of professional work experience. On average, financial analysts earn between USD 45,000 and USD 80,000 annually. Investment analysts earn between USD 45,000 and USD 90,000 annually while Chief Financial Officers earn over USD 150,000 As with any other job, more work experience generally guarantees better pay.

Singapore has been cited as the country that best pays CFA® charterholders, but this might also be due to the high cost of living in Singapore.

FRM Exams

Among the exams offered by the Global Association of Risk Professionals (GARP) is Financial Risk Management Exams (FRM). Founded in 1996 and headquartered in New Jersey in the United States of America, the Global Association of Risk Managers is an internationally recognized organization whose main agenda is to prepare individuals to become risk managers in different organizations, firms, and companies.

Upon successful completion of the exams and demonstrating two years of professional experience in risk management, an individual gets awarded the Financial Risk Manager charter. Besides the possibilities of working in the treasury department of a nation, an individual can work in an audit firm, asset management firm, government agencies, major investment banks, and even major financial companies.

FRM Exam Dates

FRM exams are offered twice in a year in the months of May and November. The FRM Part I exam is given in the morning and the FRM Part II given in the afternoon. As such, a candidate could register for only the Part I exam, or attempt both Parts on the same day.

FRM Costs

A one-time enrollment fee of $400 is required in order to register for FRM exams. Thereafter, the registration fee for each of the FRM Parts will depend on whether a candidate registers before the early, mid or late registration deadlines. For early, mid and late registration of FRM Part 1, a candidate will have to part with USD 435, USD 550 and USD 725 respectively. For early, mid and late registration of FRM Part 2, a candidate will have to pay USD 350, USD 475, USD 650 respectively.

FRM Pass Rates

The recently held FRM exam statistics (May 2019) showed that of the candidates who sat the FRM exams, 42% passed FRM Part 1 and 60% passed FRM Part 2.

Candidates who have attempted both CFA and FRM have been known to report that FRM Part 1 is more difficult as compared to CFA exams while FRM Part 2 is easier as compared to CFA exams. This implies that FRM Part 1 is more difficult than FRM Part 2.

FRM Salary Scale

As a financial risk manager, an individual will be earning an annual salary of between USD 50,000 to USD 165,000 depending on the number of years of experience, the person’s job title, and the company he/she is working for.

FSA Exams

The Society of Actuaries (SOA) was founded in 1949 as a result of the merging of two actuarial bodies: The Actuarial society of Actuaries and The American Institute of Actuaries. Headquartered in Illinois in the United States of America, it is a globally recognized institution that provides a pathway for people to become actuaries. The ultimate goal of pursuing the Society of Actuaries exams is to qualify for fellowship. An individual can, however, decide to become a Chartered Enterprise Risk Actuary, by pursuing only seven papers instead of the ten needed to become a fellow. A fellow of the Society of Actuaries is an unrivaled designation in the actuarial field. There are six tracks that can be taken on the journey to becoming a Fellow of the Society of Actuaries (an FSA). These six tracks have been discussed in length in the following article: https://analystprep.com/blog/everything-you-need-to-know-about-fsa-exams/

Costs of Becoming an FSA

The first two exams offered by the Society of Actuaries will require an individual to pay USC 225. The costs will then rise up to a maximum of USD 1125 as the exams get more advanced.

Exam Dates

The 10 Society of Actuaries exams (or 7 for CERA designation) have been spread throughout the year.

Salary of an FSA

An FSA takes home an annual salary of between USD 60,000 and USD 115,000 depending on the chosen track of practice. A fellow’s pay will largely depend on the fellowship track chosen. A CERA, on the other hand, makes an average of USD 85,000 annually.

Final Word

In a fast-changing world, Individuals require more than just a University degree. To remain marketable and at par with the transforming world, individuals are being encouraged to consider pursuing professional papers. The above examples are the three major certifications in the financial industry from which an individual can choose from.