The Financial Risk Manager (FRM) certification is awarded by the Global Association of Risk Professionals (GARP) and is widely regarded as the gold standard for professionals in financial risk management. It's made up of two exams: Part I builds the foundations, and Part II goes deeper into specific areas like market, credit and operational risk. To become a certified FRM, you need to pass both and complete two years of relevant work experience.
It's been about five months since I sat Part I, so here's a look back at how I got here and what the experience was like.
How it started
I never considered Financial Risk Management as a career until I finished my undergraduate degree at Christ University in 2025. Honestly, after despising some of the finance courses I had to take there, I didn't think I would pursue finance at all. Most of my closest mates had known they wanted to work in finance since they were 16 and had been working toward it ever since; by graduation, they were either working at renowned banks and investment firms or pursuing a master's in finance and the CFA in Singapore, London, or Frankfurt.
After graduating, I started taking a range of Coursera courses, from Business Strategy to Logic for Economists. I don't normally care much about online certificates, but the teaching in these courses was top-class. The one that challenged me and that I enjoyed the most was Investment and Portfolio Management by Rice University. That’s when I decided to pursue a proper finance certification, which boiled down to either the CFA or the FRM.
Why FRM
I leaned towards the FRM because of how specialised it is. More importantly, the timing felt right. With geopolitical tensions, the rise of prediction markets and a general sense of uncertainty about how fast AI is developing, understanding risk felt more relevant than ever. The FRM also seemed like the perfect complement to my Masters in Business Analytics & FinTech at the University of Auckland.
What Part I covers
Part I is made up of four books and close to 62 readings. Each one builds a different piece of the risk toolkit, and together they give you a solid base before Part II goes deeper into specific risk types.
1. Foundations of Risk Management
This book sets the tone for the whole exam. It covers the basics of risk and the idea that risk is simply uncertainty, not the purely negative thing most people think of it as. Risk can be measured, managed and even taken on deliberately when the reward justifies it. It also covers Beta, the Efficient Market Hypothesis, CAPM and Arbitrage Pricing Theory, which explain how markets price risk and what return investors should expect for taking it on. Alongside the theory, it looks at governance, risk appetite and lessons from past financial failures.
Why it matters: Every risk decision in a firm comes back to these ideas. Understanding how much risk an organisation is willing to take, and how that risk gets priced, is what separates managing risk from just avoiding it.
2. Quantitative Analysis
Probability, statistics, regression, time series and machine learning in finance. This tied in really well with my masters and gave me a much stronger quantitative understanding of how risk is actually measured.
Why it matters: Modern risk management runs on data. Whether it's estimating the chance of a loss, testing whether a model holds up, or using machine learning to spot patterns, these are the tools behind almost every risk number a firm reports. With AI changing how finance works, this is where my analytics background and the FRM overlap the most.
3. Financial Markets & Products
The banking system, insurance, hedge funds, how derivatives like forwards, futures and options work, how they're priced, and how interest rates move through all of it.
Why it matters: You can't manage risk in products you don't understand. This book covers the instruments firms use both to take on risk and to hedge it, and how the institutions that trade them are connected. Those connections are exactly what turn one firm's problem into a market-wide one.
4. Valuation and Risk
The standout topics for me were the Black-Scholes-Merton model, binomial trees and the Greeks. These show how options are valued and how sensitive their value is to changes in price, volatility, time and interest rates. The book also covers bond valuation, Value at Risk, credit ratings and stress testing.
Why it matters: This is where theory turns into numbers a risk team works with day to day. The Greeks tell you how a position will react when markets move, and measures like VaR and stress tests answer the question every board asks: how much could we lose, and what happens if things go badly?
The exam
I started preparing in January 2026 for the May 2026 sitting, and flew down to Wellington to write it. It was easily the hardest exam I've ever prepared for, tougher than anything I'd faced in my studies so far. I made a study plan and kept revising it right up until the last day.
On the day, the exam was less about recalling individual topics and more about pulling in concepts from across all four books and applying them to unfamiliar scenarios. That's where the logical reasoning practice I've been doing since I was a kid came in clutch, and I'm genuinely thankful for it.
After two months of waiting for results, clearing it (see my digital badge) felt like a weight lifted off my shoulders, at least for a moment, before the FRM Part II weight landed right back on them.
Tags: FRM Risk Management Exam Prep