How should you go about choosing the right track for a career in Finance?
A question that plagues a lot of candidates who dream of an advanced career in finance is whether to pursue CFA or FRM or both. During the profile building phase, students look to take up activities that could enhance their profile and make their CV look better. However, most candidates go after quantity and not quality, without even stopping for a second to think about their career goals.
I for one, strongly believe that such decisions should be taken backward, where the career goal must first be pondered upon and the profile built depending on the skills required.
CFA and FRM are both great professional courses to catapult you into a successful career in finance. However, both differ to a great extent when it comes to the content covered and the area of specialization.
A CFA is more popular and covers a broad range of topics in Finance like Corporate Finance, Portfolio Management, Fixed Income, Derivatives, etc, whereas FRM is a specialized exam for obtaining expertise in Risk management. CFA prepares a candidate well for careers in Investment Banking, Portfolio management, Financial Research, while FRM is for those who look to take up Risk management in Banks and Insurance companies. However, someone who aspires to take up a career in Investments and other areas of Finance also has to deal with concepts of risk, and a combination of CFA and FRM serves as a potent one.
Cleaning the FRM course alone on the other hand doesn’t really offer any significant career advantages as most individuals who look to successfully take up a career in Risk management should look to Actuaries. An actuary is a business professional who deals with the measurement and management of risk and uncertainty. These risks can affect both sides of the balance sheet and require asset management, liability management, and valuation skills. Actuaries require analytical skills, business knowledge, and an understanding of human behavior and information systems to design and manage programs that control risk.
The Masters in Finance or an MBA in Finance is also a great choice for a career in financial services. The advantage of a Masters program is that you will be able to gain a deep understanding of the practical concepts on Finance in a simulated environment. Many top B-schools offer innovative teaching through platforms such as virtual trading, case studies and business games. A Masters program from a top B-School abroad also allows you to gain access to some of the best faculty and industry experts across the globe, apart from introducing you to a multicultural environment and imbibing you with all-round Business skills. Most good Masters programs in Finance such as those offered by London Business School (LBS), London School of Economics (LSE), HEC Paris and Wharton School of Business (UPenn) focus on making you job-ready and have high placement rates as well. The CFA and Masters together is also a potent combination as it showcases a strong theoretical base along with sound practical understanding, thereby giving an edge.
In the end, it comes down to the career you want to pursue. Be sure to take advise from the right people and do your research well. Internships are also a great idea to experience how a job role would feel before taking up a full time career path. Most importantly, you need to be passionate and make your choice for the right reasons.
You may contact me at firstname.lastname@example.org if you have any queries.