GARP FRM Pass Rates: What You Need To Know

So, you’re gearing up for the GARP FRM exam. But here’s a thought: should your focus be on just passing, or is there more to it? Well, the word on the street is that getting the right skills is the real deal. And you know what? It’s not just talk; it’s true!

But hey, knowing the pass rate can be handy. It guides you to the areas you should focus on. Those frequently tested questions? They might just be the real-world scenarios you’ll face in your career. Curious about the GARP FRM pass rate? Now’s the time to find out.

Understanding these pass rates isn’t just about acing the test. It’s a smart move that saves you time and money. Armed with this info, you can prepare smartly, aiming for that first-time pass with GARP FRM. It’s a tough nut to crack, so having the lowdown on pass rate trends and your comfort zone is pretty important.

So, whether you’re already in the game or thinking about diving in, here’s the scoop you need as a GARP FRM student. Ready to uncover the details?

What’s the Financial Risk Management (FRM) Pass Rate Like?

The FRM exam is known for its rigor, and passing on the first try can be challenging. Without the right study plan, it might take longer to earn the certification. The curriculum includes technical concepts that require a solid understanding, and the exams often go beyond the basics to test your preparedness.

Because of this, many candidates find the course difficult after failing multiple times. If you have a background in finance, the course might seem a bit more familiar, but it’s still demanding. For newcomers, it usually requires more study time and repeated reviews to grasp the material fully.

Despite the challenges, the rewards of earning the FRM certification are significant. Planning your schedule to accommodate this course can lead to substantial career benefits.

The FRM pass rates change periodically due to various factors. For example, the pass rate dropped in 2020 due to the pandemic, which affected students’ comfort and study conditions. Pass rates fluctuate, but success is achievable with dedicated study.

FRM is head-on and not very easy to pass on the first trial. There are major hurdles to jump, and without the right study plan, you may take forever to earn the certificate. Besides, the curriculum entails technical concepts that require a good grasping power to understand. Consequently, the exams may never cover obvious concepts to cover for unprepared examinees. 

Hence, a significant number end up hating this course after failing multiple times. If you’ve been a finance student or professional, the course might be a tidbit familiar. However, it is challenging but doable for newbies. Normally, the course requires more than the average study time for newbies as it takes repetitive studies to understand some concepts.

After all this vigor in the learning phase, the benefits are immense. You want to pave your schedules for this course and reap them en masse! 

The FRM pass rates keep changing from time to time, depending on a few factors. For instance, the rate went down in 2020 when the pandemic set in due to the economic, emotional, and other factors that toned down the comforts of students. So, they keep fluctuating, allowing students to at least pass with the right amount of reading.

Previous FRM Pass Rates: What’s the Trend?

The latest FRM pass rates were released in November 2023 as 45% for Part 1 and 53% for Part 2. Generally, most exams have 50% as their pass rate, but with FRM Part 1, the rate has gone way below that standard multiple years in the last decade. In November 2012, the rate was 46%, which reduced by 4% in the next year. In the past decade, the rate got to an all-time low of 41% in May 2018 and an all-time high of 51% in August 2022.

The trend has been slightly fluctuating, with an almost straight curve in the last four years. Unlike other financial courses like the CFA, FRM pass rates didn’t drastically reduce in 2020 because most students postponed their studies, hence registering a low sample size. From 2010 to 2022, the average Part 1 pass rate was 46%, with most of the rates ranging between 40% and 50%.

The FRM Part 2 pass rate draws a rugged curve. November 2012 had a 56% pass rate, which increased by 2 points over the next year. The rates had slight increments until May 2015, when they drastically dropped by a whopping 7 points from November 2014’s 59%. Over the following 6 months, the rates shot up to 62%, bringing a 10-point difference in such a short time. 

In May 2016, the GARP FRM pass rates reached an all-time low of 50% (over a 12-year gap). The highest pass rate of FRM Part 2 was 63% in November 2021 (over a 12-year gap). The rate has been above 50% over the last 12 years, bringing an average pass rate of 57%. The rates dramatically increased between 2020 and 2021, ranging between 59% and 63%.

What Candidates Feel About FRM Exams

Many students have mixed feelings about the FRM exams. Often, they have misconceptions about what the exams will cover, leading to confusion about the most examinable concepts. For example, some students expect Part 2 to focus mainly on quantitative questions, but they find it is more qualitative.

While students appreciate that the exam gives ample time for each question, many report feeling unsure about their performance after completing Part 2. They find it challenging to predict their results and may struggle with questions that seem to have more than one correct answer.

Relying solely on core areas for study is risky. Some exams emphasize specific topics like EVT (Extreme Value Theory) and FRTB (Fundamental Review of the Trading Book), with repeated questions on these areas, while neglecting others. This unpredictability means that not thoroughly understanding such topics can lead to failure. This highlights the importance of practicing with mock exams from reputable providers.

One student, Tami, who took the exam in May 2021, shared her experience on the Analyst Forum: “The exam was more difficult than expected for two reasons. First, 80%-90% of it was qualitative with too many generic proposed answers. Second, there was an extreme focus on certain topics like FRTB and EVT, with repeated questions, and almost no testing on others. If your preparation wasn’t specific to a given topic, you were likely to miss several points.”

These insights underscore the importance of comprehensive and specific preparation for the FRM exams.

The Best Study Books for FRM Part One

The nature of the exam should inform your way of studying and revising. While many experts come up to provide study guides for GARP FRM, the truth is it may be hard to predict the concepts in the examination paper. Sometimes, even the most unexpected topics can be tested, so you want to hit that pass mark, regardless.

On many occasions, the GARP FRM pass rates are set according to exam difficulty and how the business world is moving. As for such up-to-date exams, you also want to be in step with current business trends and know the main challenges. Well, that’s definitely not enough. That’s why you need resources and a good amount of study time – at least 275 hours.

Part 1’s core areas and their study books:

• Foundations of Risk Management (Book I) – Six Sigma and Other Next Generation Techniques (Edition 1 by Anthony Tarantino and Deborah Cernauskas)
• Quantitative Analysis (Book II) – The New Benchmark for Managing Financial Risk (Edition 3 by Philippe Jorion)
• Financial Markets and Products (Book III) – Options, Futures, and Derivatives (8th Edition by John C Hull)
• Valuation and Risk Models (Book IV) – Understanding Market, Credit, and Operational Risk: The Value at Risk Approach (Edition 1 by Jacob Boudoukh, Linda Allen, and Anthony Saunders)

Other study sources:

1. Online articles – ideal for light reading and may not be fully resourceful for understanding whole concepts. They are a good option for quick skims or just keeping oneself busy on one’s way home. They use friendly and layman-like language that anyone can understand.
2. Third-party books – very resourceful when one needs to get to the tiniest details of a concept. They include financial engineering, international portfolio diversification, banking operations, structured finance, fixed-income securities, and the like. However, fully depending on these books without a study guide may take you out of the study scope.
3. Reputable prep providers – they’re among the most effective study books. They include webinar meetings, videos, and articles. While their way of teaching is often impactful, you want to bank on only approved providers.

FRM Part Two Syllabus

The exam’s core areas alongside their respective weightage:

1. Market Risk Measurement and Management – 20%
2. Credit Risk Measurement and Management – 20%
3. Operational Risk and Resiliency – 20%
4. Liquidity Risk and Treasury Risk – 15%
5. Risk Management and Investment Management – 15%
6. Current Issues in Financial Markets – 10%

Why are the GARP FRM Pass Rates Low?

1. Downplaying the test

Students tend to ride on FRM exams, as they have always done previously. Then they realize that the exam was a lot tougher than they thought. As a demanding course, the exam will involve questions that, besides merely testing your understanding of the concepts, will test your ability to apply them in the real risk management world.

2. Lack of enough studying

The idea of having about 300 hours of studying doesn’t ring any bell to many students, and this is why the GARP FRM pass rates have been low for years. The exam is designed to produce high-tier professionals and hence will not include very many general-knowledge questions. Unfortunately, many students don’t have this mindset and may end up reading just to pass the exam or for other obscure reasons.

3. Life distractions

Studying for this exam requires tenacity throughout the tenure. Unfortunately, many students don’t commit to this. Sometimes, they may start off very well and end up getting a more demanding job, move to another country, or get busy with family duties. Other times, they may lose their source of income, becoming unable to sustain the course’s needs. So, sit back and make the right deliberations before committing to this course. Most students juggle work and family and still pass; hence, it is doable.

4. Rushing through the questions

Getting to the exams, students fail to take enough time to read and understand the questions. So, they may have false confidence about their results until they’re proven wrong. To avoid such frustrations, ensure you read the question more than once and rephrase it differently in your mind. Remember that most multiple-choice questions are often confusing and will give almost correct answers as among the first choices.

5. Not taking mock tests

Besides reading through books and articles and attending webinars, you want to ensure you sharpen your understanding by taking mock exams. These will help you sift your understanding, polish your answering skills, and bash any struggles with “obscure” questions. As students mostly end up in limbo when it comes to certain qualitative questions, this won’t be a hassle for you.

Conclusion

GARP FRM pass rates, despite being low for years, can go higher with the right study strategies. You want to fill your mind with the right information concerning these exams and adopt the right approach. It’s not enough to technically hit the 300-hour mark. Sometimes, you can go wrong with the study scope, if you’re not careful to use the right study guide. Besides, going by whimsical notions will only affect your performance from the word go.

If more students are aware of the ability to pass these exams on the first trial, the exam will record better results. While the main aim is to get this high-tier certification and to spice up your skills, getting a first-time pass will save much money and attract good job positions.