CFA and FRM, which are recognized as "good friends" of financial certificates, are often compared. Most students started to contact these two terms by choosing which certificate to take the exam, and they have learned about their inspection focus, difficulty, registration process, etc. through Baidu, friends circle, training institutions' websites and other channels. The teacher of Jincheng CFA Institute started with the knowledge framework published in the official website of the Association and compared the overlap of knowledge points between them in detail.

The knowledge subject of p>CFA exam * * * is divided into ten parts (the left side of the table). Although there are three levels of exams, all the exam contents have not jumped out of this framework. Among them, the first-class and second-class subjects correspond to ten knowledge subjects completely, with a slight difference in the examination proportion of each subject; There are fourteen subjects in the third level, and there is no quantity, corporate finance and financial analysis, but a more detailed division is made in the last item, Portfolio Management and Wealth Planning.

FRM is divided into two levels and nine disciplines (on the right side of the table). One level includes the first four disciplines: Foundations of Risk Management? ，Quantitative Analysis，Financial Markets and Products? ，Valuation and Risk Models。 The remaining five doors are two disciplines.

At present, it is intuitive that both CFA and FRM consider quantity as a separate subject, and other subjects seem to have no overlap. It would be too hasty to draw a conclusion so quickly! Because these two associations stand in different angles on the framework establishment of knowledge subjects, seemingly different subjects are inextricably linked internally. Let's observe the comparison of knowledge points carefully.

comparison of knowledge points

FRM level 1 and CFA

start with the most obvious quantity. The following table lists the test sites of CFA and FRM. If we don't distinguish the order of knowledge points, we can see that they have many similar keywords: probability distribution, statistics, sample, hypostasis testing, correlation, regression, time series analysis and simulation.

Although this statistical method is very simple and rude, it also tells us directly that the two exams are strikingly similar in the number of test sites. Quantitatively speaking, the correlation between them is close to 9%!

The knowledge points analyzed next are not so intuitive, and they are scattered in various disciplines. Because the number of disciplines of FRM is less than that of CFA, and the learning system is not as perfect as CFA (an indisputable fact), we expand each subject of FRM to correspond to the test sites of CFA knowledge subjects.

Leaving aside the quantity part, there are still 27 knowledge points in 3 subjects at FRM level, 19 of which can be found in CFA levels 1 to 3, so nearly 7% of the knowledge points can be easily used for reference. They are distributed in six subjects: risk management, portfolio management, performance evaluation, ethics, derivatives and fixed income. The most frequent occurrences are derivatives (7 times) and fixed income(5 times).

generally speaking, FRM requires high mastery of every knowledge point, except for a few introductory chapters, which only need to reach CFA level, and most of them require calculation or application, so it corresponds to CFA level 2 or even 3. Of course, the level corresponding to CFA does not mean the same degree of difficulty. For example, there is only a short description of stress testing and scenario analysis in CFA Level 3, and candidates only need to understand the concept; At the FRM level, however, a whole chapter is devoted to specific methods.

FRM II and CFA

So far, many people will say, that is, although FRM and CFA have so much in common, what is its uniqueness? Is it the 2. version of CFA? Of course not. Let's look at the second level of FRM.

There are 44 knowledge points in five disciplines in p>FRM Level 2 * * *, and only 11 of them can find similar knowledge points in CFA, which is close to 25%. Most of them are in the subject of Risk Management and Investment Management, which is considered as the welfare of students who are ready to win both certificates.

Although we can still find some traces of CFA in Market risk and Credit risk, FRM has deepened a little bit in width and depth, so it is not accurate to say that knowledge points overlap at 25%, and the actual proportion should be greatly reduced.

as for Operational risk and Current Issues, they are the unique subjects of FRM, and there is no overlap with CFA at all. It is worth mentioning that the GRAP Association also includes Basel Accords in the Operational risk, which can't actually be attached to operational risk, but the Basel Accord is the "Bible" of the banking industry, so it is not involved at all in CFA's exam of building a fund manager.

CFA's unique content

Next, let's see what unique content CFA has left. The obvious ones are economics, financial analysis and company management. Obviously CFA Association wants the holder to investigate and analyze some problems from the management or outside the enterprise, with a higher perspective. In contrast, FRM licensees stand in the risk management department or enterprise to measure and manage risks. There are two other pieces of content that are not so obvious, but they are also unique to CFA.

First of all, although we see the overlap of Ethics in the tables of FRM-1 subjects, CFA's moral standards are simply outrageous, which is to be a moral model! Not only is it detailed, but it is also the compulsory content of each level, ranking first in all subjects, so morality must be counted as the characteristics of CFA. Secondly, Wealth Planning hidden in the tenth point of CFA knowledge framework, that is, IPS to be written at CFA Level 3, plans investment strategies for individual and institutional investors, which is related to the form of writing essay question in CFA Level 3 morning exam.

Teacher's words

To sum up, the contents of CFA and FRM belong to you, and I have you. Wherein the quantitative part is highly similar to the quantitative part. There are nearly 7% contents in the first-level part of FRM, and every subject can find overlap in CFA, while the overlap between the second-level part of FRM and CFA is less than 25%. CFA's ultimate goal is to become a qualified fund manager, so it has requirements for economics, financial analysis, corporate management and writing IPS, which FRM does not have. The ultimate goal of FRM is to learn risk management, which requires higher requirements in the study of market risk, credit risk, operational risk and Basel Accord.