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Which is the better option after a B.Com? CFA or FRM

Online Manipal Editorial Team | July 19, 2022

For a commerce stream student, the next best option is a Bachelor of Commerce or commonly known as B.Com. It provides a conceptual understanding of the topics of accounts, finance and business. Commerce is vast, and B.Com gives an overview of all the topics. It makes students familiarise themselves with various topics and thus supports in deciding when for further studies and specialisations. It provides career opportunities in accounting, finance, insurance, banking, management, business, taxation and investment.

An overview of the B.Com programme

B.Com is a three-year undergraduate degree. Its curriculum focuses on various commerce fields, like accounts, taxation, management and business. A student can also pursue B.Com honours. B.Com honours offer specialisations where in general, B.Com covers all the subjects of commerce. 

It lays down a firm foundation for students to pursue their higher studies or select a field of interest and get expertise. After B.Com, a wide range of career options opens for the students. They can choose to pursue a Master of Business Administration (MBA) or Master or Commerce or other programmes. They can choose an MBA in finance, marketing or human resource as per their interest. The next option is Chartered Accountancy (CA). Auditing and taxation are the core of the CA course. Someone looking forward to starting a career in investment banking can do  CFA after B.Com. Financial Risk Management (FRM) will also provide the required specialisation where someone is interested in risk assessment and managing risk. 

READ MORE: Guide to B.Com course details: All you need to know

Why are CFA and FRM the most sought-after options after B.Com? 

A commerce graduate has vast options to pursue, but CFA and FRM are most in demand. As both the courses are globally recognised, making them popular among students. The CFA Institute, established in the USA, conducts exams and provides certification to students and professionals. Similarly, FRM certification is provided by the Global Association of Risk Professionals, USA. Unlike other options, these two are not bounded in a specific country. They open job avenues across borders. 

Overview of CFA

Chartered Financial Analyst is a designation given to the person who has completed the course conducted by CFA Institute USA. It focuses on providing real-life skills that will enhance your knowledge and advance your career. This course primarily focuses on fields like investment analysis, asset valuation, portfolio management etc. Let’s know a bit more about it. 

  • A graduate or student in the final year of graduation can enrol for the CFA course
  • It has three levels of exams, which a student has to clear to use the designation CFA
  • The curriculum of CFA includes topics like ethical and professional standards, derivatives, quantitative methods, economics, financial statement analysis, equity investment, portfolio management and wealth planning 
  • The minimum duration in which a person can complete the CFA course is two years, assuming the student has passed all exams on the first attempt
  • The total fees of the CFA course, including registration fees and one-time exam fees, will be around USD 2550 to USD 3400. The good news is that CFA Institute also runs scholarship programmes for students
  • To get a CFA charter, one must clear all exams and fulfil qualified work experience criteria. You can get work experience before or after qualifying exams. After completing these two requirements, one can apply for a charter along with references that will prove work experience in investment and portfolio management
  • Some of the profiles in which a CFA works are Financial Consultant, Wealth Manager, Portfolio Manager, Strategic Analyst, Investment Analyst etc 
  • Around 1,70,000 CFAs are working in 160 global finance markets. This globally recognised course will give you a giant leap after your graduation

Overview of FRM

Financial Risk Manager is a designation the Global Association of Risk Professionals provides. They aim to study the market, predict changes and protect the company’s income-generating assets from risk and adverse impact. The FRM programme is recognised in around 90 countries. The course aims to equip FRMs with risk assessment and risk management skills, which they will use in the banking sector, Insurance companies, asset management companies, accounting firms and regulatory agencies. Let’s look a bit deep into the FRM course.  

  • A student can enrol for the FRM course after their B.Com 
  • There are two-part exams – Level I and Level II. Both are multiple-choice exams. One must pass the Level I exam first to appear in Level II  
  • Candidates must pass Level II exam within four years of passing Level I exam. If she/he fails to do so, the Level I result will be invalid further, and they will have to start from the beginning
  • To apply for the Certification, a candidate first has to clear both the part exams and complete two years of qualified work experience. Qualified work experience is the work experience related to risk management. This work experience aims to keep FRMs updated with recent changes and develop real-life skills 
  • The fees of the course range from USD 1100 to USD 1700, including one-time enrollment fees and examination fees 
  • The work profiles for an FRM are Risk Analyst, Risk Management Consultant, Risk Manager etc
  • The curriculum of Level I of  FRM includes the foundation of risk management, quantitative analysis, financial market, and financial and risk models. And Level II includes market risk, credit risk, operational risk, liquidity risk management and investment management
  • FRM programme trains learners to become an in-demand Risk Manager along with a boost in career and salary

CFA vs FRM: Which one to choose?

About 15 percent of FRM Part 2 and 55 percent of FRM Part 1 are covered by the CFA programme. FRM is a specialised programme focusing on risk management, whereas CFA has a more generalised curriculum that considers financial analysis and investment-related material. 

CategoryCFAFRM
OrganisationsThe CFA Institute USA is the managing body. It designs curriculum and conducts exams.  Global Association of Risk Professionals USA is the governing body of FRM.
ExamsThere are three levels of exams, Level I, Level II and Level III.  It is like three stages that a candidate has to complete one by one. Here there are two-part exams. Part I and Part II
Qualified work experienceFor getting a charter, one has to complete 4000 hours worth of work experience in the field of financial analysis or investment-related roles. This can be completed before clearing exams or after clearing exams.Here FRM requires two years of qualified work experience in the field of risk management. 
Curriculum The CFA includes topics like – ethical and professional standards, derivatives, quantitative methods, economics, financial statement analysis, equity investment, portfolio management, and wealth planning.FRM covers topics like the foundation of risk management, financial market, financial and risk models, market risk, credit risk, operational risk, liquidity risk management, and investment management.
JobsThe job profiles that will best suit a CFA are – Wealth Manager, Portfolio Manager, Investment Consultant, and Strategic Analyst.The Job profiles for an FRM areCredit Manager, Operational Risk Manager, Risk Management consultant, and Risk Analyst.
Level of difficultyAs per Data provided by the CFA Institute, the passing percentage for the November 2021 Level III and February 2022 exams were:Level I: 36%Level II: 44%Level III: 43%As per the Global Association of Risk Professionals, the passing percentage in part I and part II exams held in 2021 are: Part I: 45%Part II: 63%
Exam datesThe exams are conducted in February, May, August and November. The schedule of the 2022 session is as follows: –Level I: Feb 15-21, May 17-23, Aug 23-29 & Nov 15-21.Level II: Feb 22-26, Aug 30 – Sep 03 & Nov 22-26Level III: May 24-26 & Aug 30 – Sep 06The part I exam is conducted in May, August and November and Part II is conducted in November and May.
Websiteshttps://www.cfainstitute.org/en/https://www.garp.org/

Benefits of pursuing CFA after B.Com

The CFA is one of the toughest exams. And due to this, it holds a premium position in the market. The person holding a CFA charter receives distinction and edge compared to his contemporaries, who do not hold a similar designation.

The time, discipline, and hard work a CFA dedicates to getting the charter makes him appealing to prospective employers. They are generally employed by leading companies like J.P Morgan, Barclays, Morgan Stanley etc. 

The CFA programme covers various topics; thus, a CFA holder can apply for jobs in various sectors. They can be portfolio managers or strategic analysts. 

The other benefit of CFA is the financial one. The salary packages of CFA’s are higher in the market. The CFA institute’s compensation study in 2019 revealed that the average salary of a portfolio manager is USD 1,77,000 per year.

The benefits of FRM after B.Com

FRM is a specialised certification in risk management and is considered one of the leading certifications in the industry. It gives credibility, and the programme ensures that the certified FRMs are well trained and well versed in their profession. A person with an FRM certificate has more chances of landing his desired jobs compared to others. 

As FRM is a focused study on risk management, the job opportunities are in banking, insurance companies, risk assessment agencies, accounting firms, and consultancy firms.  

The FRM boosts your existing career, or if you are a fresher, it will give you a head start in the job market. The salary paid to an FRM will be higher than the counterparts who do not hold such specialisation. 

CFA or FRM – Which is better?

“Which is better, CFA or FRM?”  is a difficult question. Both CFA and FRM have their benefits. CFA covers a wide range of topics of finance such as portfolio, derivatives, equity, investment, finance etc. On the other hand, FRM is a super-specialised certification in risk management. It focuses on credit risk, operational risk, liquidity risk etc. It depends a lot on the career path one wants to follow. 

Someone who is interested in financial analysis and wants to make a career in investment and portfolio management should go for CFA. Whereas a person, who wants to have a very specialised degree and certification and targets the managerial roles, can choose FRM. The job roles involve studying possible vulnerabilities and threats and the risk to the organisations. FRM will provide a good boost to the career in the risk management domain.  

Enrol in online B.Com at Online Manipal

Let’s take a leap with technology and join online B.Com at Online Manipal. Complete your graduation at your own pace. Join live classes or view recorded classes at your convenience and comfort. The university is recognised and accredited by UGC, NAAC A+ graded, World Education Association and many more. 

The fee of online B.Com is INR 80,000, which is INR 13,333 per semester. The university provides easy payment and financing options like zero-cost EMI, and one can opt for scholarships. Online Manipal also provides placement assistance to students to help them find suitable jobs after graduation and flourish in their careers.

Conclusion

Both CFA and FRM are the best choices for a commerce graduate. They will not only open new avenues and widen the scope of work. A candidate with these certifications will be paid higher compared to a person who doesn’t hold these designations. With the recent change in the world, Investment analysts and risk managers will be in huge demand. Select the course as per your interest.

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