Difference between FRM and CFA

People sometimes do not get to understand the difference between these two qualifications and their application. Again, since there have been lot of developments in finance, one has to choose one and continue with it rather then trying to be jack of all trades. This is an era where every organization has separate departments and people handling tasks which suit them better. There is a sharp and open difference between both of these certifications.

Chartered Financial Analyst
CFA has its limited scope in financial industry where it caters specifically to the investment industry. It provides you thorough insight into
a) How the investment industry works?
b) What are the characteristics of an investment industry?
c) How to value different things?
Since some things are inter related, you also get so learn about some accounting techniques, statistics and some part of risk management. The main focus is to equip an individual with all the tools to make his way through the investment industry e.g financial research, financial valuation, investment banking, investment analysis and fund management.

Financial Risk Management
The major focus of FRM is risk management. It actually helps you identify, evaluate and mitigate the risks that any organization faces. FRM is not focused towards the investment field. It is more of a risk management certification. The big advantage of FRM is for those who work in risk management departments of any organization.

Considering that CFA and FRM are both the same things and that the certifications could be used interchangeably, is not only wrong but stupid as well! In Pakistan, those who intend to work in risk management departments (which though is more in demand these days) could prefer FRM and go for that.

For those who want to move into the investment industry and are going to be directly working on investment decision making tasks, CFA is what they need.

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