Why I am NOT getting the FRM….

I just wanted to take a quick moment here to talk about future plans.  I always try to have things set out about 6 – 8 months in advance, which for any certification means I save money in early registration.  The original plan was to complete the FRM this year because it was the last year it was offered in the one test format.  It made sense to complete it before it got even more expensive, so I was waiting for the Schweser notes to go on sale and then I was going to sign up.  However, during my final research I discovered some things that changed my mind:

• FRM is not offered in Calgary
• The cheapest flight around test time to the 3 nearest test centres was $600 round trip, no accommodations, food…etc
• FRM has a cousin, PRM
• FRM has an annuity membership payment

I already knew about PRM but I chose FRM only because Schweser notes were available.  My lack of early due diligence could have cost me if I hadn’t reviewed some of the fundamentals of the FRM and then the PRM.  First off, it is important to know why I have chosen to get a risk management designation.  It comes down to adding sufficient skills that can be combined with broad market skills to offer clients a more comprehensive financial service package.  I wanted to get a risk management designation for the increased knowledge and to assure my clients that I have additional expertise in risk modeling.  This demand will continue to increase after the continued blows to investors financial confidence (tech bubble, enron and now housing/credit crisis). So with that said, I am not interested in an actuary path for the sheer depth isn’t really appropriate for my needs.  The PRM is an secondary addition, not the primary focus.

The choice to persue the PRM designation instead of the FRM designation was due to a few simple factors:

• PRM is more quant driven; meaning it has more applicable concepts to actual risk modeling than FRM does (that is arguable, but I am a firm believer of quantitative over qualitative)
• PRM has ZERO membership fees; I have no problem paying membership fees, but when I see two identical designations and one is free and the other is a yearly annuity….well figure it out
• The PRM covers a lot more material; the purpose of getting these designation isn’t solely for the letters, but for the knowledge/skills it will provide.  Getting the easiest designation completely defeats the purpose.  This isn’t to say that FRM is easy, just that PRM is harder (aka, has more information, covers more topics).
• PRM can be scheduled whenever you want (within certain time-frames); this flexibility is key for my tight schedule
• PRM is offered in Calgary at more then one location

For you FRM holders out there, this isn’t met as a shot against you.  I am simply stating that for my purposes I am finding it hard to justify FRM over PRM, even if it was financial prudent. No schweser notes kind of bums me out, but I will survive.  I got a lot of my information on AnalystForums from people who have completed these and other designations, so jump to the search function and check it out for yourself.  With that said, PRM will have to be pushed back until I complete CFA-L3.  This is a requirement to skip the first two levels which are redundant with other certifications.  Pushing back this designation only means I am bringing up another, which I will talk about in my next post.

– Steve

2009

04/07

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