FRM Pass Rates: Trend Analysis & Comparison With Other Courses

The Financial Risk Manager (FRM) certification, offered by the Global Association of Risk Professionals (GARP), is a highly esteemed credential in the finance industry. Known for its rigorous curriculum, the FRM thoroughly assesses a candidate’s expertise in risk management, making it a key milestone for those looking to advance their careers in this field.

An important factor is the pass rate that gives an insight into the level of the exam and the amount of work a candidate needs to complete in order to prepare for the FRM. The pass rates have over the years offered a glimpse into the difficulty of the exam giving the candidates a clue on what is required of them.

In this blog, we dissect pass rates of FRM exams of the last few years and also explain how you can increase your prospects of passing. It is important to have knowledge of these rates to enable you plan well on how to achieve your study goals and be a holder of the FRM.

What is the FRM Exam?

The FRM certification is globally recognized and administered by the Global Association of Risk Professionals (GARP). It is designed for professionals who want to specialize in risk management.

The certification process involves two rigorous exams, Part I and Part II, which cover a wide range of topics, including market risk, credit risk, operational risk, and risk management in investment management.

• Part I focuses on the tools used to assess financial risk, including quantitative analysis, financial markets and products, and valuation and risk models.
• Part II delves into the application of risk management strategies, covering market risk, credit risk, operational risk, and current issues in financial markets.

To gain a comprehensive understanding of the FRM course, explore the in-depth guide- All About the FRM Course

Historical FRM Pass Rates

The latest FRM pass rates, released in November 2023, were 45% for Part 1 and 53% for Part 2. Over the past decade, Part 1 pass rates have often been below the typical 50%, with a low of 41% in May 2018 and a high of 51% in August 2022. Despite fluctuations, Part 1 rates have stabilized in recent years, averaging around 46% from 2010 to 2022.

In contrast, Part 2 pass rates have been more varied. They reached a low of 50% in May 2016 and a high of 63% in November 2021. The average pass rate for Part 2 over the last 12 years has been about 57%, with significant increases between 2020 and 2021.

Below is a summary of the pass rates for both Part I and Part II:

Year	Exam Part I Pass Rate	Exam Part II Pass Rate
May 2019	41%	53%
Nov 2019	50%	56%
Oct 2020	42%	60%
Nov 2020	46%	59%
May 2021	44%	62%
Nov 2021	45%	59%
May/Aug 2022	47%	51%
Nov 2022	45%	53%
May/Aug 2023	51%	53%
Nov 2023	45%	53%

Factors Influencing FRM Pass Rates

Several factors contribute to the FRM pass rates, including:

Difficulty Level of the Exam:

• The FRM exam is known for its complexity, with a significant emphasis on understanding intricate risk management concepts.
• Part I typically poses a challenge due to its heavy reliance on quantitative analysis.

Candidate Preparation Methods:

• Success in the FRM exams often depends on the quality of study materials and the effectiveness of preparation strategies.
• Candidates who dedicate more time to practice questions and mock exams tend to perform better.

Changes in the Exam Syllabus:

• Periodic updates to the FRM syllabus can impact pass rates, particularly when new or more challenging topics are introduced.

Experience in the Finance Industry:

• Candidates with practical experience in risk management may find certain sections of the exam easier, particularly in Part II, which focuses on the application of risk management techniques.

FRM Part I vs. Part II Pass Rates

The pass rates for FRM Part I and Part II have shown distinct patterns over the years, reflecting the different challenges each part presents.

FRM Part I Pass Rates

General Trends:

• Part I typically has lower pass rates compared to Part II. This is partly due to its focus on foundational concepts, which require a strong grasp of quantitative analysis and risk management principles.
• The pass rates have fluctuated between 40% and 50% over the past decade, with occasional dips below 45%.

Challenges:

• Part I covers a broad range of topics, including quantitative analysis, financial markets, and valuation models, making it challenging for candidates who may not have a strong background in these areas.
• The exam’s emphasis on theory and technical skills often results in lower pass rates.

For a detailed understanding of FRM Part I, read- All About the FRM Part I

FRM Part II Pass Rates

General Trends:

• Part II generally has higher pass rates, often exceeding 50%.
• This part focuses more on the practical application of risk management techniques, which may be easier for candidates with industry experience.

Challenges:

• Although Part II tends to have higher pass rates, it is still challenging due to the complexity of the topics, such as market risk, credit risk, and operational risk management.
• However, candidates with practical experience in these areas often find Part II more approachable than Part I.

To know more about the FRM part II in detail, read- All About the FRM Part II

Global vs. Regional Pass Rates

The FRM exam is taken by candidates from all over the world, and pass rates can vary significantly between different regions.

These variations can be influenced by several factors, including the availability of study resources, educational backgrounds, and the level of financial market development in each region.

North America and Europe:

• These regions generally show higher pass rates, likely due to better access to study materials, more extensive professional networks, and strong educational foundations in finance and risk management.

Asia and Emerging Markets:

• In some Asian countries, particularly those with rapidly developing financial sectors, pass rates are improving as access to resources and education increases.
• However, in other emerging markets, candidates may still face challenges that contribute to lower pass rates.

Regional Trends:

• Over time, regional pass rates can shift as educational opportunities expand and as more localized resources become available.
• Regions that invest in financial education and professional development are likely to see their pass rates improve.

Tips to Improve Your Chances of Passing

Use High-Quality Study Materials:

• Invest in well-reviewed study guides and question banks that cover all topics thoroughly.

Elevate your FRM preparation with comprehensive study material: The Ultimate Guide to Mastering FRM Concepts

Practice with Mock Exams:

• Regular practice with mock exams can help you familiarize yourself with the exam format and time constraints.

Time Management:

• Allocate your study time effectively, ensuring you cover all topics while leaving enough time for revision.

Join Study Groups:

• Collaborating with other candidates can provide additional insights and motivation.

Comparing FRM Pass Rates with Other Professional Courses

When considering professional certifications in finance and risk management, it’s important to understand how the Financial Risk Manager (FRM) pass rates compare to those of other well-known courses. Here’s a look at how the FRM exam stacks up against other certifications:

FRM vs. CFA (Chartered Financial Analyst)

Pass Rates:

• The CFA exams are known for their rigor, with pass rates that typically range between 40% and 50% for each level.
• Like the FRM, the CFA exam is challenging, but the CFA has a slightly higher pass rate, particularly for Levels I and II, compared to FRM Part I.

Difficulty:

• Both exams require a deep understanding of finance, but the CFA covers a broader range of topics, including portfolio management, while the FRM focuses specifically on risk management.

Discover the key differences between FRM and CFA in this comprehensive guide: Everything You Need to Know About FRM vs. CFA

FRM vs. PRM (Professional Risk Manager)

Pass Rates:

The PRM certification, another risk management credential, has pass rates that are generally comparable to the FRM. However, the PRM exam is modular, allowing candidates to take sections individually, which can make the overall pass rate slightly higher.

Difficulty:

• The PRM is also rigorous but offers more flexibility in exam scheduling, which some candidates find beneficial.
• The FRM is seen as slightly more challenging due to the comprehensive nature of its exams.

Explore the essential differences between FRM and PRM in this detailed guide: All You Need to Know About FRM vs. PRM

FRM vs. CAIA (Chartered Alternative Investment Analyst)

Pass Rates:

• The CAIA exam, focused on alternative investments, has pass rates ranging from 50% to 60%.
• These rates are typically higher than those of the FRM, reflecting a different focus and possibly a different candidate pool.

Difficulty:

• While both CAIA and FRM require a strong understanding of finance, the CAIA is more specialized, whereas the FRM covers a broader range of risk management topics.

FRM vs. CFP (Certified Financial Planner)

Pass Rates:

• The CFP exam, which is geared towards financial planning professionals, has pass rates typically ranging from 55% to 65%.
• These rates are higher than those of the FRM, reflecting the CFP’s focus on personal finance and planning rather than the specialized and technical nature of financial risk management.

Difficulty:

• The CFP exam covers topics related to financial planning, investment strategies, and retirement planning, which are generally broader and less technical than the FRM’s focus on risk management.
• The FRM is considered more challenging, particularly for those without a background in risk analysis.

FRM vs. ACCA (Association of Chartered Certified Accountants)

Pass Rates:

• The ACCA exam, covering a wide range of accounting and finance topics, has pass rates typically around 40% to 50% for each paper.
• These are somewhat similar to FRM pass rates but vary depending on the specific exam paper.

Difficulty:

• The ACCA is comprehensive but broad in scope, while the FRM’s depth in risk management makes it a tougher challenge for those not specialized in this area.

Impact of FRM Pass Rates on Career Prospects

The FRM (Financial Risk Manager) certification is highly regarded in the finance industry, and pass rates can have a significant impact on your career prospects. Here’s how:

Signaling Expertise

Industry Recognition:

• Passing the FRM exam demonstrates a strong grasp of risk management principles, signaling to employers that you have the knowledge and skills needed to handle complex financial risks.

Competitive Edge:

• Given the challenging nature of the FRM exam and its pass rates, earning the certification sets you apart from other candidates, making you more competitive in the job market.

Advancement Opportunities

Career Growth:

• Professionals with an FRM certification are often considered for higher-level positions in risk management, finance, and related fields.
• The certification is seen as a mark of excellence and commitment to the profession.

Salary Benefits:

• Holding an FRM can lead to better compensation packages, as employers value the specialized knowledge that comes with the certification.
• This is particularly true in roles that specifically require risk management expertise.

Learn about the salary prospects for FRM professionals: FRM Salary Potential Explained

Global Mobility

International Recognition:

• The FRM certification is recognized worldwide, making it easier for professionals to pursue opportunities in different countries. Employers across the globe understand the value of the certification, which can open doors to international roles.

Conclusion

The FRM certification is one of the most popular and at the same time of the most demanding financial credentials worldwide. Usually, the pass rate seems to be within a range of 40 percent to 50 percent proving the fact that sitting for the FRM exam is one of the toughest endeavors for a candidate. These pass rates, compared to other professional certification exams such as CFA, PRM, and CPA, show that FRM is highly specialized and rigorous.

Pursing the FRM certification means a high level of proficiency in the field of financial risk management and provides a career benefits such as recognition in the global market, better paying jobs, and chance for promotion. No matter if you are planning your career growth, trying to get a edge in the market, or extending your knowledge in risk management, FRM certification is a wise step for your career.

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