MBA vs FRM – Are you trapped in this highly confusing dilemma while mapping out your career path? Do you want to kickstart your dream career in the finance industry, but find yourself perplexed whether to pursue an MBA or go for FRM certification?
Worry not, because you are not alone! This question has been a hot topic of discussion among aspiring finance professionals for many years.
Both degrees are highly sought after and can produce excellent career mobility. However, before we jump to a conclusion to MBA vs FRM, it’s crucial to assess your career goals.
What do you prefer – a career in risk management or a managerial role in multiple domains, including Finance?
This article aims to shed light on significant differences between MBA and FRM to help you make an informed career choice.
MBA vs FRM – Major Differences
MBA is short for Master of Business Administration, and FRM stands for Financial Risk Management. An MBA degree is more holistic to management. It offers a solid foundation in non-finance subjects like marketing, sales, human resources, and international business, and is recognised worldwide, even outside the finance domain. FRM is a certification dedicated explicitly to the field of risk management.
Let’s have a look at the significant differences between MBA and FRM.
1. Organising Body
- The exams for FRM certification are controlled and managed by GARP (Global Association of Risk Professionals), USA.
- MBA exams are controlled and conducted by individual universities and institutions.
2. Course Duration and Pattern
- There are two exams in the FRM course, labelled as Level 1 and Level 2. It is mandatory to clear level 2 within four years of passing the first level.
- Usually, the duration for MBA courses is four semesters or two years. upGrad, in collaboration with most prestigious institutes, offers you the options of one-year MBA courses, and Executive MBA (EMBA).
3. Subjects Covered
- Important subjects covered in the FRM syllabus are related to Risk management like Treasury & Liquidity Risk Management, Quantitative Analysis, Financial Markets & Products, Investment Management, Risk Models, and more.
- Another difference between MBA vs FRM is that the former covers a broad spectrum of subjects like Finance, Human Resources, Business Administration, Accounting, Hospitality, Marketing, Entrepreneurship, and International Business.
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4. Eligibility Requirements
- There are no professional or educational prerequisites to register for the FRM examination. However, you will get the FRM certification only when you pass both levels and demonstrate two years of full-time professional work in any risk related domain.
- The general eligibility requirements for MBA programs are:
A relevant undergraduate degree with a minimum of 50% marks is necessary.
- It would be best if you have a good score in competition-based MBA entrance exams. You must check with the institute and opt for the test accordingly. For instance, for upGrad’s MBA in Digital Finance & Banking, CAT, XAT, and MAT scores are valid for one year. GMAT and GRE scores are valid for five years, and in case you have not taken these exams, you must take JMAT (Jindal Management Aptitude Test).
- Some institutes or universities require full-time work experience to be eligible for enrolment. For instance, upGrad’s Global MBA from Deakins Business School requires a minimum of 3 years of full-time work experience, and other requirements you can read here.
4. Program Cost
- The fees for each level of the FRM exam ranges between $500-$1000. In addition to the exam fees, there are some books that you would have to buy from the GARP or other third-party sources.
- The cost of MBA programs is comparatively higher than FRM. However, MBA programs from upGrad offer easy EMI’s and loan offers to help you move up the corporate ladder without worrying too much about the payment. For example, upGrad’s MBA in Digital Finance & Banking is priced at INR 1,75,000 and easy EMIs of INR 15,834/ month.
5. Difficulty Level
- Another difference between MBA vs FRM is the difficulty extent of examinations. The FRM exams are more complicated than the MBA, and the success rate of passing both the levels is around 42% to 55%. The questions are designed explicitly to test whether an individual is capable of handling demanding and high-risk scenarios.
- MBA programs are relatively less challenging, and their success rates are comparatively high compared to the FRM certification. The rigour level varies across institutions, and effort is needed to build the required skills and managerial aptitude.
6. Expected Salaries
- According to PayScale, the average salary of financial risk managers in India is INR 11,89,700/year, and the highest salaries can go up to INR 35,00,00 annually. The average salary for a risk professional in the USA ranges between $80,000 and $200,000.
- Many professionals pursue an MBA because it offers high earning potential. In the USA, the starting salary for an MBA graduate is approximately $100,000. In India, the average salary ranges from 7,00,00 to 30,00,000 annually. After an MBA in India, the highest annual salaries can go up to 60-80 lakhs or even more, depending on the job role, experience, and skillset. Learn more about MBA Salary in India.
7. Job Prospects
- The FRM course helps candidates bag a job in portfolio management, investment banking, risk assessment, and management.
- MBA degrees offer a great return on investment by providing ample and diverse job opportunities to help you move up the corporate ladder. upGrad’s MBA programs open doors to multiple employment opportunities aligning with your skillset and career goals. Learn more about career options after MBA.
Advantages of MBA over FRM
If you want to pursue your career only in a specialised risk management domain, FRM can be useful. Alternatively, if you want to develop advanced management and leadership skills or need the flexibility to work in multiple disciplines, the MBA is a safe bet for you.
Though expensive, compared to the FRM certification, the MBA degree offers better growth prospects in an organisation for a candidate.
- MBA equips you with financial and technical know-how, along with managerial aptitude.
- Understanding the hierarchy in an organisation and the decision-making skills gained during the MBA course helps the candidate climb the ladder in an organisation faster.
- The pass percentage of the FRM certification exams is less than 50%, and drop- out rates are sky-high, whereas most candidates who opt for an MBA degree can pass easily.
- Most Tier-1 MBA colleges provide lucrative summer internships for their students at the end of the first year. Not to forget, they also make sure all their students are placed by the end of the course.
- MBA programs offer some of the highest salaries and job security in the job market. The average MBA annual salary is different in different countries, for example, $102,100/year in the US, 123,500$/year in Switzerland, 92,400$/year in the UK.
Benefits of upGrad’s Online MBA
With education being taken to online platforms, the market for online MBA courses has seen an exponential surge in previous years. Nowadays, an increased number of professionals choose this non-traditional way, i.e., pursuing online courses to advance their careers and unlock their true potential.
Online classes provide the flexibility to juggle between work and academics. With the classes being held online, there are no physical boundaries, enabling you to learn continually and create invaluable contacts.
upGrad offers excellent and unparalleled online MBA courses with added advantages.
- upGrad offers immersive learning with industry-relevant MBA programs in collaboration with reputed universities and institutions. For example, upGrad offers an MBA Degree from Liverpool Business School, a leading B-School in the UK.
- upGrad’s MBA programs attract faculty from globally renowned universities and are accredited by top institutes ensuring the pedagogy meets global professional and academic standards.
- These online programs come with easy EMI options so that you can focus on learning instead of pricing. For example, upGrad’s 18-month Executive MBA (Specialisation in Business Analytics) in collaboration with NMIMS Global Access is priced at INR 13,375/ month.
- upGrad offers unique career preparations & mentoring services to help you attract potential recruiters, for example, a dedicated career mentor, company-specific interview preparations, resume review, and LinkedIn profile building.
Despite many differences between MBA and FRM, both these courses have distinct advantages. MBA prepares you for any organisation’s managerial and business aspects, while FRM certification can supplement your MBA enhancing your analytical skills and risk management abilities.
If you are looking to open new employment opportunities, satisfy your entrepreneurial ambitions, or change careers, you can opt for upGrad’s online MBA programs. upGrad breaks the myth that you cannot attain high-quality education online with its tech-savvy and immersive learning environment.
Is an MBA better than an FRM degree?
Both MBA and FRM degrees have their advantages. An MBA is a Masters in Business Administration, which gives students a holistic view of the various aspects of managing a business. On the other hand, an FRM is a certification in Financial Risk Management, which is extremely valuable and is recognised worldwide for roles specific to risk management and finance. Thus, an MBA is a better option for those who wish to keep their options open, or who wish to pursue roles in functions like marketing, business analytics, and so on. An FRM is a better choice for those who are already working in the financial risk department, and wish to get better roles within the same.
Is it advisable to do an FRM course after an MBA degree?
If you love the world of finance, and wish to pursue a career specific to managing financial risk, then an FRM would be an excellent choice. The certification is accepted globally, and candidates holding this certification can expect to get excellent jobs in financial risk. On the other hand, if you are not sure about which role would suit you best and need some time to decide, it would be better to work for a while after getting an MBA degree so that you can make up your mind and then select a specialization course which would be better suited to the career of your choice.
Is MBA an easier course compared to FRM?
Not necessarily. An MBA is an intense course, involving at least 48-50 different subjects, all to be covered within a period of 1-2 years. It is also pretty challenging to get into an MBA course in the first place considering the difficulty level of the entrance exams and the heavy competition for seats in reputed institutes. On the other hand, an FRM certification is also very challenging, especially for those who have no background in finance or risk management. That being said, an MBA would be an easier choice for someone who has absolutely no knowledge or experience related to managing financial risk (or any other aspect of business management).