Financial Risk Manager - Explained
What is a Financial Risk Manager?
If you still have questions or prefer to get help directly from an agent, please submit a request.
We’ll get back to you as soon as possible.
- Marketing, Advertising, Sales & PR
- Accounting, Taxation, and Reporting
- Professionalism & Career Development
Law, Transactions, & Risk Management
Government, Legal System, Administrative Law, & Constitutional Law Legal Disputes - Civil & Criminal Law Agency Law HR, Employment, Labor, & Discrimination Business Entities, Corporate Governance & Ownership Business Transactions, Antitrust, & Securities Law Real Estate, Personal, & Intellectual Property Commercial Law: Contract, Payments, Security Interests, & Bankruptcy Consumer Protection Insurance & Risk Management Immigration Law Environmental Protection Law Inheritance, Estates, and Trusts
- Business Management & Operations
- Economics, Finance, & Analytics
What is a Financial Risk Manager?
Financial risk manager, also known as FRM, is a professional designation that the Global Association of Risk Professionals (GARP) issue. FRM accreditation from GARP is a financial risk professionals premier certification with global recognition. With recognition in more than 90 countries, the FRM exam measures the ability of an individual to manage risk in a global environment. The certification is ideal for individuals who aspire to specialize in assessing financial risks on behalf of insurance companies, banks, regulatory agencies, accounting firms, and asset management firms.
Back To: INSURANCE & RISK MANAGEMENT
To get the FRM designation, an individual has to take and successfully complete a comprehensive examination. The exam covers several topics, including risk management tool applications and investment management process techniques. The design of questions is to ensure that it gives a candidate practical skills and experience in the real world. Candidates are expected to understand risk management approaches and concepts as used by the risk managers everyday activities. Program for FRM follows major risk management disciplines such as:
- Market risk
- Operational risk
- Credit risk
- Investment management
- A candidate must have not less than two years of relevant work experience
- A candidate must take, complete and pass the FRM exam
Note that unlike other professional certifications, FRM does not have accompanying coursework. However, there is a study guide and reading lists that Global Association of Risk Professionals offers to help candidates in exam preparation. Examination Sections The FRM exam is divided into two main sections. The first part is on financial risk assessment, and consist of the topics listed below:
- Quantitative analysis
- Financial products
- Core risk management concepts
- Valuation and risk models
The second FRM exam section focuses on the risk assessment application. The topics in this section are as follows:
- Integrated risk management
- Investment management
- Operational risk management
It is worth to note that the GARP recommends that you take additional professional development for at least 40 hours every year.
Financial Risk Manager Exam Costs
GARPs first part of the exam costs around $750. This amount of fee is for those candidates who do application six months in advance or more. The costs include an enrollment fee of $400 and $350 for the exam. However, for those applying between 60 to 90 days in advance, the cost is $875 and $457 for the exam. For late enrollment (application less than 90 days before the exam), the cost is $1,050, and the exam fee rises to $650. As for the second part, there is an examination fee waiver, with the exam fees remaining unchanged ($350 to $650). Candidates who do a retake in the first part of the exam will also get their enrollment fee waived. GARP provides study materials, and an applicant can access them free of charge. However, there are sets of study books that candidates must pay before accessing. Each set of books goes for $300. For those who want to cut on the costs of purchasing study books, can do so by going for e-books, which goes for $250 per set.
What Does a Financial Risk Manager Do?
- Designing and executing comprehensive risk management procedures, process, and policies
- Identifying methods of assessing and analyzing financial risks
- Evaluating the intensity of risk and budgeting
- Establishing risks that the organization is ready to take
- Preparing a customized report on risks and record maintenance
- Establishing contingency plans and precautionary measures, based on the risks assessment
- Reviewing contracts, legal documents, policies, new programs, and activities, among others
- Development of proposals using their forecasting and risk analysis skills
- What is insurance?
- Captive Agent
- Independent Agent
- Captive Insurance Company
- Combined Ratio
- Claims Adjuster
- Capital at Risk
- Assigned Risk
- Incurred But Not Reported
- Qualified Actuary
- Cession (Re-Insurance)
- Burning Cost Ratio
- What is an insurance contract?
- Accidental Means
- Anti-stacking Provisions
- What is an insurable interest?
- What are the common categorizations of insurance?
- National Association of Insurance Commissioners
- Insurance Regulatory Information System
- American Academy of Actuaries Definition
- American Association of Insurance Services Definition
- American Council of Life Insurance Definition
- American Insurance Association Definition
- American Risk and Insurance Association Definition
- LLoyd's of London
- Associate in Insurance Services (AIS) Definition
- Associate in Loss Control Management Definition
- Associate in Marine Insurance Management Definition
- Associate in Personal Insurance Definition
- Associate in Reinsurance (ARe) Definition
- Associate in Risk Management Definition
- Associate in Commercial Underwriting Definition
- Associate in Insurance Accounting and Finance Definition
- Associate in Surplus Lines Insurance Definition
- Chartered Insurance Professional Definition
- Chartered Life Underwriter Definition
- Chartered Property Casualty Underwriter Definition
- Vehicle insurancePrivate Passenger Auto Insurance Risk Profile
- Underinsured Motorist Coverage
- Uninsured Motorist Coverage
- Omnibus Clause
- Health Maintenance Organization
- Capitated Contract
- Point of Service Plan
- Children's Health Insurance Program
- Disability Insurance?
- Credit Disability Insurance
- Life Insurance?
- Cash Surrender Value
- Absolute Beneficiary
- Acceleration Life Insurance
- Accelerated Benefit
- Accelerated Option
- Accelerative Endowment
- Charitable Gift Life Insurance
- Incontestability Clause
- Waterfall Concept
- Assumed Interest Rate
- Clean Sheeting
- Hazard Insurance
- Homeowners, Renters, and Fire Insurance?
- Participating Community (Flood Insurance)
- Insurance Considerations for Business
- Business Liability Insurance
- Commercial General Liability
- Liability Risk Retention Act
- Excess Insurance and Umbrella Insurance Policy
- Business Interruption Insurance
- Key Person Insurance Definition
- Own-Occupation Policy
- Self-Funded Health Insurance Plan
- Basket Retention Policy
- Commercial Blanket Bond
- Alternative Risk Transfer Market Definition
- Commercial Property Casualty Market Index Survey
- What are the primary obligations of the insurer?
- Earned Premium
- Reservation of Rights Letter
- Collateral Source Rule
- What are the primary obligations of the insured?
- Insurance Premium
- Affidavit of Loss
- What is the general structure of an insurance contract?
- Ambiguity Principle
- Accommodation Line
- What are the common disputed provisions in an insurance contract?
- Absolute Exclusion
- All Risks Clause
- What is required for the termination of an insurance contract?
- Risk Management
- Professional Risk Manager
- Associate in Management (AIM)
- Financial Risk Manager
- Forecasting (Business)
- Objective Probability
- Unconditional Probability
- Enterprise Risk Management (ERM)
- Operational Risk
- Business Recovery Risk
- Political Risk
- Asset Protection
- Performance Bond
- Barra Risk Factor Analysis Definition
- Above Ground Risk (Mining Industry)
- Bumbershoot Policy (Maritime)
- Abandonment Clause (Boat or Vessel)
- Bobtail Liability Insurance (Trucking Industry)
- Anti-Indemnity Statute (Construction)