HowtoBecomeaFinancialRiskManager-ACompleteGuide by

How To Become A Financial Risk Manager: A Complete Guide

A career in financing or accounting can be one of the most rewarding and fulfilling careers that you could build for yourself.

Only you can provide the solutions that companies need. No one else out there, besides others with your education can provide that solution.

If you want a position within the financial field that maximizes your problem-solving skills, then a financial risk manager would be the perfect fit.

Are you interested in learning a bit more about it? Here’s how to become a financial risk manager, as well as why it might be the perfect position for your skills.

Why Become a Financial Risk Manager?

One of your top questions for the Financial Risk Manager position might be as to why you should pick it over other finance positions.

What separates it as the “must-have” career that you’re excited to perform day in and day out?

Here are several reasons why Financial Risk Managers love doing it for a living and how it can benefit you as well.

1. The Average Salary

If you’re looking to pursue a degree in finance, then money obviously speaks to you in a different way than with other people.

If so, then one of the best reasons for becoming a Financial Risk Manager (FRM) is the steadily-rising salary for your services.

As it stands right now, an annual salary for FRMs ranges from $50,000 to $165,000. 

That gives you quite a range for what you might start out making to what you can end up making as you continue to grow your career. Not many other positions can offer that level of a consistent salary raise.

2. Get Noticed Faster

Becoming a Financial Risk Manager means that you’ll have passed what is known as the FRM Exams.

A person that has the FRM designation on their resume receives the benefits of higher paychecks, higher experience, and more know-how in the finance field.

For those reasons alone, you’ll be viewed as a premium asset as you apply for the job you want. If an employer is left to decide to either hire you (with FRM designation) or someone without it, you’ll win that battle every time.

3. Faster Career Growth

Those that have an FRM exam to their name are considered to be among an elite group. Read here about the myths associated with the FRM exams.

The FRM exam will get you in the door, and once you gain some years of experience under your belt, you have more options.

You can continue to advance your career as an FRM or make a transition to a new challenge within the finance industry. Either way, it’s your prerogative to do so.

How to Become a Financial Risk Manager

Now that you’ve seen several reasons as to why you should become a Financial Risk Manager, it’s time to see the proper steps you’ll need to take.

Here’s an in-depth look at the process you can expect to go through in your route to becoming a Financial Risk Manager. 

1. Register for the FRM Exam (Part 1)

The good news is that you don’t have to have any prior education before registering for the FRM exam.

The other news is that there are two parts to the FRM exam.

Start by signing up for part 1 and choosing a date to take the test (either May or November). 

2. Study for (and Pass) the FRM Exam Part 1 

There are several different ways to get your hands on study material for part 1 of the FRM exam. Choose the best route for your budget and be sure to give yourself plenty of time to study prior to the test (a few months is recommended).

Part 1 will include things such as quantitative analysis, financial markets (products), valuation and risk models, and foundations of risk management.

The test includes 100 questions that are all multiple choice.

3. Register for the FRM Exam (Part 2)

After you’ve been notified that you passed part 1 of the FRM exam, it’s time to register for part 2!

You’ll have up to four years for you to register after you’ve taken and passed part 1 of the exam. Once again, be sure to give yourself plenty of time to study and don’t take the test lightly.

Note that, while part 2 is more difficult than part 1, there is a higher pass rate for it than those that take part 1. Dedicate yourself to studying and you’ll be perfectly fine!

4. Study for (and Pass) the FRM Exam Part 2

Are you noticing a trend yet? Part 2 will consist of 80 total questions which, once again, will all be multiple choice.

You should expect questions that range from various topics. These topics include things like current issues in financial markets, risk management, credit risk measurement, and investment management.

You’ll be notified 6 weeks after taking the test as to whether or not you passed or failed.

5. Get Real-World Experience

Now that you’ve passed both parts 1 and 2 of the FRM exam, the final step to being FRM certified is proving yourself in the field.

The experience needs to be finance-related and be relative to the topics you studied for the FRM test.

After you’ve completed at least 2 years of experience in such a role, the GARP requires that you send in a description. Once they deem your subscription as a viable experience, they’ll notify you of your official FRM certification!

Start Your Financial Risk Management Career Today!

As you can see, the road on how to become a financial risk manager is a testing, but rewarding one.

As long as you give yourself plenty of time to study the material and dedicate yourself to learning, you’ll pass both parts of the FRM exam before you know it!

Be sure to read our other articles relating to both this topic and other topics that are just like it.

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