CFA or FRM? Which is prior for a prospective FinMath student?

[anonymecon]

I'm going to MAFN at Columbia this fall. I plan to take a test at the end of this year, to enhance my profile.
It seems that recently most of job vacancies are risk management, so in order to secure an internship in the U.S., do I need to take FRM asap? Or still better to take CFA first?

I would be grateful if you could share your opinions.
Thank you all in advance!

 

[TehRaio]

do you even need the FRM to be competitive for a risk management position?

 

[CasanovaJ]

Every once in a blue moon there are risk positions that say something along the lines of "FRM/PRM preferred," but I'd say it's rare enough that passing the first CFA would probably be more valuable in making you (maybe slightly, but not at all considerably) more marketable for finance jobs in general... It's risky, though, because CFA Lvl1 is substantially tougher than FRM Level1, and if the idea would be to take CFA Lvl1 in June and you haven't started preparing for it yet, I wouldn't plan on passing.

Edit: If by "taking at the end of this year" you mean sitting for either CFA or FRM in November/December, take my word for it-- you won't have time to study in the Fall after starting MAFN.

 

[Jason R. Stevens CFA]

I'm going to be applying to MFE programs this fall/winter and just passed Lvl3 CFA in June (I should be eligible to apply for the charter w/work experience in January). The CFA program is largely focused on fundamental analysis, and, as you progress through Level 1, portfolio management at a high level.

Having worked in the industry for several years, I cannot imagine that level 1 actually helps anyone get a job, especially someone with an MFE. For buy side AM it is almost a requirement, however, the program doesn't focus much on math, statistics, or risk, so it probably won't help for risk management gigs. That being said, I can't imagine how passing any of the CFA levels can hurt unless you market it incorrectly--as in "I passed level 1 so I'm qualified to do x, y, and/or z..." Under no circumstances should you make such a claim--it's bogus and you might be escorted out of the building!

In all, however, I found the CFA program to be extremely rewarding. It was not intellectually challenging, rather, it was difficult due to the volume of material. It's a marathon. It broadly touches almost everything and goes into slight depth with respect to accounting and fundamental equity/fixed-income/derivative (tiny bits) analysis (fixed income as an investment--NOT trading per se...if you want to know the difference, read Graham & Dodd Security Analysis).

I can't speak to the value of an FRM as I have not and do not plan to take the exams but if you're going to do the CFA, definitely take the summer exam progression. The level 1 in Dec to level 2 the next June was horrible from a time commitment stand-point. I did pass all three first time around and back to back; in retrospect I'd do the June schedule for all of them as your social life, happiness, and work quality suffer when preparing for the exams. The only advantage was familiarity with the ethics material--it's rote memorization and by taking level 1 six months prior to level 2, I feel that I had to spend less time re-memorizing the Codes.

Here's how I'd rate the material covered for all of the levels and what you might expect:

Level 1 - easiest by far - very limited mathematics and statistics; general overview of finance; will probably be fairly easy for most MFEs willing to dedicate hours
Level 2 - most difficult by far - no math, mostly accounting and fixed-income/equity fundamental analysis; derivatives and alternatives incl.
Level 3 - strange difficulty - covers high-level portfolio management (again, no math) and ties everything together; half of the exam is essay format so I imagine the difficulty here depends on the examinee.

Do note: when I say "no math" I'm saying that assuming an MFE audience...

Also, here's a tip if you take the test: DO NOT memorize formulas past the obvious, it's a waste of time. Understand them and you'll be fine.