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PRM vs.

FRM why I chose PRM


As you might now, I am undergoing the CFA examination.
CFA gives you an incredible indepth transversal knowledge of the finance area an
d I am grateful for that. In the mean time, I m quite a techie guy => looking for
advanced quantitative stuff as well. I strongly believe an advanced quantitative
education is a strong complement to CFA designation.
Being interested by growing area of risk management, I had a look at possible cr
edible designation available on the market.
Naturally I stumbled upon FRM for Financial Risk Manager (http://www.garp.com/fr
mexam/ from GARP). After digging a little bit, I found that another designation
existed with advanced quantitative content and quite recognized in the investmen
t community too : PRM for Professional Risk Manager (http://www.prmia.org).
PRM vs. FRM
How to make a choice? Well that was the hard part! (for the name, I prefer FRM s
ince it accounts for financial focus of risk management in its name)
My first approach was quite straightforward. I went to a financial-jobs internet
website (http://www.efinancialcareers.com) and I searched for jobs with first fr
m as keyword and then prm as keyword. Result of this test was cristal clear: 22 ans
wers for FRM vs. 3 for PRM. => my choice went to FRM.
Full of doubts and uncertainties, I decided to give it another go on two other f
inancial-jobs websites and here results were more mixed. FRM still had the hedge
, but in fact lots of job offers contained FRM as an acronym for their own busin
ess units and not for the FRM certification. In fact, when clear reference to FR
M certification was made, PRM was quoted too (almost always). => back to the beg
inning: which one to choose ?
Below are misc elements that helped me take a decision:
pro PRM:
* supposedly a bit more quantitative than FRM (I m looking for this quantitati
ve aspect)
* less costly (exam prices are lower, no annual membership fee for now)
* clearer self-study line (single handbook covering all exams vs. a handbook
+ core-readings for FRM with visibly only core-readings as important (=> why ha
ving a dedicated handbook if it does not exactly cover the exam content) & havin
g an accumulated list of different readings (what core-readings consist of) does
not look like a smooth & effective way to learn for me)
* greater flexibility: 4 exams that you can pass in any order at any busines
s day (with restriction though to pass them within 2 years) vs. 2 exams that you
can pass only twice a year in specific locations
* backed by top-tier one universities: Columbia University, Duke University,
Bocconi School, HEC, Hong-Kong University, National University of Singapore, Tr
inity College (full list: http://prmia.org/index.php?page=aboutus&option=universi
typartners)
pro FRM:
* still the hedge in job offer (though only slightly in the end)
* work experience required (I find it important, you hardly can be a profess
ional without relevant work experience)
* older than PRM (1997 vs. 2002) => more recognized
* 17k graduates to date (I did not manage to find the number of PRM graduate
s, I only found the number of members which is not representative) => huge pool
of potential colleagues, who do know about the PRM program
* article on wallstreetjournal, stating a huge increase in the number of app
licants (+80% in 2009 with 23k candidates!!!!) (article: http://online.wsj.com/a
rticle/SB10001424052748703278604574624513398904666.html)
conclusion: the wsj article definitely identified FRM as the train to take for m
e. Its pool of participants is increasing at high speed leaving out competition
(unfortunately I did not find similar stats for PRM, it s too bad) => I wanted to
go for FRM (despite all these advantages that PRM has! incl. free-membership)
not-for-profit
I was about to register for FRM exam when I read an article on the GARP scandal
(http://www.riskglossary.com/link/garp_scandal.htm and http://www.riskglossary.c
om/papers/garp_letter.htm). Basically the short story is that at first, only GAR
P (and its FRM certification) existed. But at some point they started to make re
al-money out of it. So they decided to change the status of the company from a n
ot-for-profit organization to a regular for-profit organization. Some people wor
king at GARP felt betrayed and decided to create a real not-for-profit organizat
ion managing risk-management profesionnals: PRMIA and its PRM certification.
Well, it might look stupid, but this was decisive in making my choice. I mean cf
a is a not-for-profit organization, all universities/high-schools I know are not
-for-profit organization. Why? At some point, when you re in the knowledge busines
s, I find it not appropriate to have as goal profit-maximization. It is not the
way it s done in the other places => why should it be the case here? To me this is
not ethically appropriate and GARP has not the best focus in mind.
It s a bit the same awkwardness that existed when auditing firms where consulting
firms to the same clients as well. At some point you have a conflict of interest
. The thing is that I was upset with FRM getting that expensive: now it is made
of two exams (=> twice the price!), you have expensive curriculums + additional
expensive handbook and I ve noticed that annual fees have been rising up quite sha
rply and steadily. It really made me feel that they wanted to skim the milk out
of me. Now that I know they are simply a profit-driven organization, I understand
it and I m simply not interested.
So my choice is to undertake PRM:
* recognized to be as demanding as FRM by experts in the field
* more quantitative that FRM
* backed by top-tier universities (really important for me)
* less expensive
* more flexible
* ethically grounded
Right now it might be a bit less reknowned than FRM outside the risk-management
domain, but I do hope they will gain exposure (it looks like, they recently open
ed new offices in Asia) and I will try to support them and expand recognition of
its program. I find that being more ethically sound make the whole affair less
risky on the long-term, and guess what: it s about risk-management!
I hope you will choose PRM too.
sources
* http://www.prmia.org
* http://www.garp.com/frmexam/
* http://www.riskglossary.com/link/garp_scandal.htm
* http://www.riskglossary.com/papers/garp_letter.htm
* http://prmia.org/index.php?page=aboutus&option=universitypartners
* http://online.wsj.com/article/SB10001424052748703278604574624513398904666.
html
* http://www.efinancialcareers.com
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18 Responses to PRM vs. FRM why I chose PRM
1.
Tim says:
April 24, 2010 at 6:21 am
Thanks for the review. Same happened to me after I read about GARP and For
-Profit thing.
I wish u good luck on ur exams!
Tim
2.
remy says:
April 24, 2010 at 9:51 am
I m glad you made the same choice.
Good luck to you too!
Remy
3.
Lisa says:
May 16, 2010 at 3:51 pm
I m currently agonising over making the same choice that s a really helpful su
mmary thanks!
4.
hamid says:
July 8, 2010 at 10:19 am
Thanks for sharing your views! I was facing the same dilemma, now it made
my choice easier.
5.
Ashwini says:
August 10, 2010 at 8:42 am
Hi
I am in India. Which one would be better for me. Any opportunoties. Most b
anks ask the question what is PRM when being inetrviewed. Help pls.
6.
Jatin says:
August 25, 2010 at 1:23 pm
Congrats for making that choice. I myself is a PRM and vouch for its suita
bility for risk management positions. @Ashwini- India is opening upto Risk Manag
ement skillset benchmarking slowly. Earlier most of the people (in public sector
banks) only knew about DTIRM (IIBF) and also ICAI used to run risk management c
ourse. Believe me, (I remained in risk management stream in Public sector for 8+
years) if some organisation knows FRM, it knows PRM too. Lately I have seen spe
cialist officers recuitment in risk management department for IDBI asking for FR
M/PRM as desirable qualification. All the best.
7.
Bint says:
September 3, 2010 at 10:44 am
Hi thanks for this. Having a massive dilema about which to take, has defo
help d make my decision
8.
Sam says:
October 4, 2010 at 4:39 pm
Thanks for this info.. made my decision just now ! :)
9.
Chan Jit Loon says:
October 12, 2010 at 1:44 pm
Dear All,
I am a PRM and I chose PRM awarded by PRMIA simply because it is recognise
d by the world s best universities such as University of London, University of Rea
ding, National University of Singapore, New York University, Macquarie Universit
y etc.
If the PRM is recognised by these leading Universities, the high quality o
f the PRM is assured.
Additionally, as our friend, CFA , have pointed out in his well researched op
inion, there are many other advantages such as flexibility, being more quantitat
ive, more reasonably priced etc.
The PRM really improved my financial and risk management knowledge signifi
cantly. Good luck to all of you.
10.
Phoenix says:
December 21, 2010 at 5:35 am
This is a great summary thanks. It seems however that now membership is al
so a requirement for PRM. Quoting prmia (http://prmia.org/index.php?page=exam&op
tion=trainingAtAGlance)
Candidates are required to pass four exams to be awarded the PRM designati
on. You can choose to take the complete PRM exam in one sitting or in four separ
ate modules, which can be taken in any order over a period of up to two years. T
he only pre-requisite is membership in PRMIA.
This takes the cost up by $125 annually. Is it still worth going for PRM?
11.
remy says:
December 21, 2010 at 9:47 am
I m not so sure about this because you can still subscribe for free membershi
p (but you won t get any discount on books or exams, so it s still interesting to be
a sustaining member the year you decide to g0)
12.
Raja says:
January 14, 2011 at 2:03 am
Remy,
Did u finish all of your PRM exams?
How much time required to for each exam.
I passed CFA level1 and preparing for level 2 for this June
13.
remy says:
January 16, 2011 at 6:27 pm
Hi Raja,
I ve passed 3 out of 4 prm exams and I ve scheduled the last exam (exam III) b
y the end of next week.
Preparation for PRM and CFA is different. It s easier to take PRM as you can
take exams individually (thus focusing on each exam one after the other) vs. al
l-at-once for CFA. More or less, one month per exam should be sufficient, note t
hat if you can study full time, it may be even faster. Regarding exam IV, one or
two weeks may be enough.
Good luck with CFA
14.
azhar says:
January 16, 2011 at 10:43 pm
Hi dear. Does any one have PRM examine III handbook soft copy.
Thanks:
Azhar
15.
remy says:
January 17, 2011 at 8:16 am
unfortunately no. Cheers
16.
Ahmad says:
January 19, 2011 at 9:30 am
wooh this must have took alot of time to research,, thanks for the insight
and wish you good luck on your PRM exams
17.
Kiran says:
January 31, 2011 at 9:09 pm
Hi,
I am Kiran Yeruva, i am a Physics guy, i have completed MS degree.
I am looking for career in risk management. If i complete PRM can i get jo
b based on it or do i need more back ground in Finance?
Thanks,
Kiran
18.
remy says:
January 31, 2011 at 9:31 pm
No idea! I don t have any crystal ball and PRM is not that reknowned yet.
I would say it s better to have it than have nothing.
Good luck

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