Risk Management Certification Curriculum and Exam Preparation

Becoming a certified professional in any field can be awhich will be "grandfathered" out, has 140 questions.
rigorous process. Some designations requireThe two part exam consists of 100 questions for
classroom study and preparation, while others simplyLevel I and 80 questions for level II.
require that a designee pass an exam based on his orIn order to prepare for the two-level exam
her knowledge. Curriculum is also important, but alsostructure, the organization expects that the
based on the field. If the field is a dynamic one, suchcandidate will spend between 150 and 200 hours for
as the financial industry, then a curriculum should beeach level. GARP offers a self study guide, as well as
dynamic to match the field. In terms of the riskcore readings that are available as a "course pack".
management certifications, both PRMIA and GARPThe FRM Handbook is recommended as a textbook
offer self study programs, designed to be "at pace"for study and each participant can also prepare using
with the individual. But both organizations offerpractice exams available from GARP. The organization
examinations that are rigorous and that will test thecan also point candidates in the direction of local
ability and knowledge of the candidate.study groups and third party course providers. GARP
The PRM program is comprised of four exams. Asdoes not offer training directly, naming this as a
we discussed, PRMIA does not require that apotential conflict of interest. There is a digital library
candidate take all four exams at one time, nor doeswhere candidates can find information and readings
the organization require that the exams be taken in aon any of the competencies covered in the exam
specific order. PRM Exam I covers theory related tobattery. As mentioned, the FRM curriculum, in the
finance, as well as financial instruments and markets.form of readings, textbook, and courses, changes
In Exam II, the candidate will need to understand theregularly, and is being especially overhauled to match
mathematics that accompanies risk measurement.the new financial environment.
Exam III is a test of common practices in the riskGARP's ERP preparation and exam structure is very
management filed, and exam IV covers professionalsimilar to the FRM's. Candidates are expected to
standards, conduct, ethics, and bylaws as set byspend 250 hours in preparation of the exam, which
PRMIA.covers physical energy markets, financial trading
The PRM exams are multiple-choice exams, consistinginstruments, valuation and structure of energy
of 120 questions pulled from a database. Althoughtransactions, risk management in financial trading, as
the questions are multiple choice, the existence of awell as disclosure, accounting, and compliance. This is
database proves that the organization is attemptingobviously a broad-based curriculum for a specialty
to test from every possible angle. PRMIA reportsarea of practice. As with the FRM, candidates can
that only 50% of its candidates actually finish theuse a self-study guide, a course pack, a digital library,
certification with the required 60% pass rate, so itand sample exams in order to prepare for exam day.
appears that the exams are fairly difficult. PreparationThe ERP certification program is overseen by
is unstructured, that is, there is no actual requirementpracticing professionals, which is in itself a dynamic
that a candidate attend courses. One of the firstaspect of curriculum and exam preparation.
aspects that PRMIA stresses about examWhy is the curriculum and preparation method for
preparation is that professionals in the field cancertifications important to your organization? First, a
prepare by simply doing their jobs well.dynamic curriculum ensures that whoever becomes
The organization also recommends that candidatescertified will not only be exposed to a broad base of
examine all of the available resources, includingknowledge, but also to knowledge that is current.
professional journals, articles, online forums,This is important in any field, but in the field of
conferences, and procedural documentation. PRMIAfinance current knowledge takes on a life of its own.
offers a self-study guide which the candidate can useOversight by practitioners is also of importance to
to assess areas in which he or she needs furtherthe organization, for virtually the same reasons:
study and practice. The study guide alsocontent needs to be current. Broad-based areas of
recommends reading in specific topic areas. Thecompetency are also important, because you need
organization recommends a textbook (Theto ensure that designees are able to function in a
Professional Risk Manager's Handbook), which isvariety of knowledge areas, even if he or she is
written by 35 authors, as preparation for Exams I, II,specialized. Knowing where a particular function "sits"
and III. In order to prepare for Exam IV, thein relation to the broad spectrum of financial activity
candidate is encouraged to examine a reading listis key to moving the organization forward.
provided by PRMIA. Once the candidate determinesWhat about the significance of self-study? We will go
his or her areas for improvement, PRMIA offersinto more detail in this topic when we discuss
online and classroom training targeted for thosecompetencies, but it's important to note that a
competency areas.self-guided curriculum requires a dedication and focus
The FRM certification from GARP is undergoingthat not every adult learner possesses. If you hire
change as of October 2009, mainly in response tobased on a certification such as the FRM, PRM, or
the financial upheaval of the past two years.ERP, you'll know that you're getting a person who is
Depending on when a candidate submits interest fordedicated, able to focus, and possesses the skills to
the certification, he or she may either be required tofollow through.
take one exam or two exams. All of the FRM examsNext, we will examine the recognition and standards
are multiple choice; the exam with only one part,set forth by risk management certifications.