Which Is A Better Option To Learn Trading? CFA or FRM?

Among these highly regarded certifications in finance are the Chartered Financial Analyst (CFA) and the Financial Risk Manager (FRM), which are considered great if a financial professional aims to advance their career. Both of these certifications provide proper knowledge and skills in trading strategies, risk management, portfolio management, financial analysis, asset management, market analysis, investment banking, and financial modelling. Nevertheless, if a choice has to be made between the two, which of the two is the better option for future traders to learn trading? Let’s consider each certification in detail as well as the benefits so that you will be able to make an informed choice.

Let’s take a closer look at both certifications and their respective benefits to help you make an informed decision.

The Chartered Financial Analyst (CFA) Program:

The CFA Program is the professional designation issued by the CFA Institute to investment and finance professionals. CFA is a globally recognised program, that opens doors to opportunities across the world. The CFA Program is pretty comprehensive, requiring candidates to complete three levels of exams. Candidates will be tested on ethics, economics, financial reporting and analysis, corporate finance, equity investments, fixed income, derivatives, alternative investments, and portfolio management. CFA charterholders are known for their expertise in financial markets. 

A candidate who undergoes the CFA program receives a firm base of the principles of investment analysis and portfolio management. It remains the most recognized investment analysis program globally. CFA Charterholders are known to possess great expertise in investment analysis and decision-making while having rigid ethics. 

One of the major benefits of the CFA Program is its comprehensive body of knowledge and skills applied to many areas within finance, particularly trading. The charterholder has a superior understanding of financial markets, along with the tools and techniques he/she can use for evaluating opportunities. Thus making him/her better suited for jobs in investment management, research, or trading.

The Financial Risk Manager (FRM) Program:

The Global Association of Risk Professionals (GARP) offers a professional certification which is the FRM Program for professionals specialising in finance. The two-part program discusses significant topics such as risk management, quantitative analysis, financial markets and products, and valuation and risk models.

The FRM Program is designed to foster a solid foundation of risk management and quantitative analysis in candidates. FRM is a globally recognised program with great prestige in the risk management industry; FRM holders are associated with the highest level of expertise in identifying, analyzing, and managing financial risk.

One of the most significant advantages of the FRM Program is that it focuses on providing specialised knowledge in risk management. For someone who would like to pursue risk management, risk consulting, and risk analysis positions, the FRM Program could be extremely effective. The program might lack in providing a broad range of concepts compared to the CFA Program in areas such as trading and portfolio management. 

To learn more about our Financial Risk Manager Program, read our blog on what is FRM(Financial Risk Management). Course Details, Fees, Duration, and Scope. 

Which is a Better Option for Learning Trading?

CFA and FRM programs both provide the knowledge and skills required to learn trading. However, if one is a seeker of a deeper understanding of trading strategies, portfolio management, or financial analysis, we would say that the CFA Program is the way to go about it. The program addresses virtually all topics of interest, directly applicable to actual trading as well as finance markets, investment analysis, and portfolio management.

On the other hand, the FRM Program is more suitable for people who have interests in a specialisation called risk management because while risk management is an inherently important aspect of trading, the scope of knowledge in other areas such as financial analysis or portfolio management wouldn’t be as wide as with the CFA Program.

The CFA and FRM programs do not differ much, but the one suitable to your needs would depend on your dream career and interest. If you are interested in having a career in investment management, research career or trading, then it would be more appropriate to take the CFA Program. If you are inclined to have a career in risk management, risk consulting, or risk analysis, then the FRM Program would suit you more.

Conclusion

However, taking the CFA and FRM can surely be advantageous to those who want to enhance their careers in finance. While the CFA may offer general knowledge regarding trading strategy and portfolio management, as well as analysis, it is the FRM that can specialize in professionals in risk management. Everything, after all, will depend upon your goals and interests. Be it CFA or FRM certification, the choice of any program will help you get a great deal in this extremely competitive world of finance.

If you are confused about which course to opt for, just feel free to contact Zell Education. We have a dedicated team ready to offer professional guidance and counselling so that you make an informed decision.

FAQs

Is FRM harder than CFA?

FRM and CFA are both challenging and unique to their subject matters, but many feel that FRM is even more specialized and technical than CFA, which covers a much broader range of topics.

Should I do both CFA and FRM?

Doing both can increase your finance and risk-management-related expertise and make you one of the strongest candidates for a niche job role in this changing economy.

What is the salary of CFA FRM in India?

Professionals with both CFA and FRM would earn somewhere around ₹ 12-18 lakhs annually in India and can vary with experience and profile.

What to do first, FRM or CFA?

Start with CFA if you are looking for a specialisation in the broad range of finance and portfolio management. Otherwise, start with FRM if your area of concentration is Risk Management.

Partham Barot is an ACCA-certified professional. showcasing his expertise in finance and accountancy. he’s revolutionising education by focusing on practical, real-world skills. Partham’s achievements underscore his commitment to elevating educational standards and empowering the next generation of professionals.