Pursuing Both CFA and FRM: When to Start With CFA

Deciding whether to prepare for the CFA (Chartered Financial Analyst) or the FRM (Financial Risk Manager) first is a critical step on the path to your professional goals. This article will guide you through the factors to consider, providing insights that will help you make an informed decision.

Content Overlap and Career Goals

Both the CFA and FRM examinations have a substantial overlap in certain topics, which can make preparing for both simultaneously an attractive option. The CFA Charter focuses on investment management, financial analysis, and portfolio management, covering detailed areas such as equity, fixed income, derivatives, and ethics. On the other hand, the FRM is geared towards risk management, including market risk, credit risk, operational risk, and quantitative analysis. This content overlap can streamline your study process if you are preparing for both examinations.

Time Commitment

Both the CFA and FRM require significant study time. The CFA program is divided into three levels and typically takes longer to complete due to its comprehensive nature. Starting with the CFA might extend the timeline before moving onto the FRM. However, if you manage your time effectively, it is feasible to pursue both certifications simultaneously.

Career Goals

Your career aspirations will play a crucial role in deciding which examination to tackle first. If you aim to work in roles that focus specifically on risk management, it may be more advantageous to start with the FRM. Conversely, if your interests or career path is more aligned with portfolio management or investment analysis, starting with the CFA would be a better choice.

Personal Preference and Preparation Strategies

Consider your interest in the topics covered by each program. If you find the CFA material more engaging or relevant to your current job, it might make sense to pursue it first. Conversely, if you are more interested in the areas covered in the FRM, you may want to begin with that.

An effective preparation strategy can significantly impact your success in both examinations. Here are some strategies to consider:

Strategy 1

Appear for CFA Level 1 in February Appear for FRM Level 1 in May Appear for FRM Level 2 in November Appear for CFA Level 2 in June (following year) Appear for CFA Level 3 in June (following year)

Strategy 2

Appear for CFA Level 1 in August Appear for FRM Level 1 in November Appear for CFA Level 2 in June (following year) Appear for FRM Level 2 in November (following year) Appear for CFA Level 3 in June (following year)

Strategy 3

Appear for FRM Level 1 in May Appear for CFA Level 1 in August Appear for FRM Level 2 in November Appear for CFA Level 2 in June (following year) Appear for CFA Level 3 in June (following year)

Common Topics and Preparation Focus

Several topics are common to both the CFA and FRM exams, which can be leveraged to streamline your preparation. For instance, the common foundational knowledge and skills include:

Bond Valuation Basics of Futures and Options Derivatives and Futures Option Valuation Portfolio Management Equity Market Basics Probability and Statistics Basic Statistics and Hypothesis Testing

Cover the common topics first, and then focus on the unique content of each examination.

Conclusion

Pursuing the CFA first is a perfectly viable option. Many candidates choose this path as the CFA credential is widely recognized and respected in the finance industry. After completing the CFA, you can then focus on the FRM, which will complement your knowledge with a specialized focus on risk management.

Ultimately, choose the path that aligns best with your career aspirations and interests. Whether you opt to pursue the CFA first or start with the FRM, the key is to have a well-planned and executable study strategy.