May 2011 FRM exam pass rates

W

Wendy

New member
Joined
Jun 18, 2026
Messages
0
Reaction score
0
.
How do you feel about the recent May 2011 FRM exam pass rates?
Too high? Too low? Just right?
Part I - 53.1% . . (Nov 2010 rate was 39.3%)
Part II - 61.6% . . (Nov 2010 rate was 54.9%)
Are you in favor of higher pass rates, to draw more candidates into the program, grow the number of FRM holders, and make the designation better known ?
Or, do you think the pass rates should be kept low, to try to increase the perceived exclusivity of the designation ?
There is some freaking out on other ‘boards about the May 2011 exam pass rates. For example, below…
—-
[email protected] Posted: 06 July 2011 10:23 PM
GARP HAS FAILED MISERABLY AGAIN .. HOW CAN THEY EVEN THINK OF PASSING SO MANY PEOPLE. CAN YOU PLEASE PASS MY MESSAGE TO GARP FRM DIRECTOR. WHAT ARE THEY TRYING TO ACHIEVE BY PASSING CANDIDATES WHO MUST HAVE BARELY ATTEMPTED COMPLETING THE PAPER. GARP IS NOT DOING ITSELF ANY GOOD BY CHURNING OUT MEDICORE CANDIDATES WHO WILL THEN GET ABSORBED IN THE FINANCIAL SYSTEM AS RISK MANAGERS. I HAVE JUST SEEN FROM POSTS AT GARP FACEBOOK PAGE WHERE COUPLE OF CANDIDATES HAVE PASSED FRM LEVEL 2 EXAM WITH 3RD QUARTILE IN ALL SECTIONS WHICH MEANS THERE PERFORMANCE WAS GREATER THAN 25% AND LESS THAT 50%. CAN YOU PLEASE EVEN IMAGINE THE QUALITY OF THESE CANDIDATES. HOW MUCH PAPER WILL THEY HAVE ATTEMPTED AND ACTUALLY GOT CORRECT? THIS IS TOTALLY ABSURD …
 
In my view the most “natural” way would be passing rates going down slowly over time.
Take for example also the CFA passing rates (in the first year >90% passed, now its about 30-40% per level).
At first a small group of highly motivated people do the exams and passing rates should be high, years later there will be a lot of momentum and everybody is giving it a try resulting in lower passing rates. They can also become a bit more selective since they already have the momentum.
The most important thing for GARP to do would be to keep the level equal over time (or only slightly more difficult). If you make it much harder over time people will discount charter holders who passed further in the past and if you make it easier then it will be perceived all having less value.
People who have passed in the past might feel like the passing rates should go down so they have a competitive advantage. But i don’t think that passing FRM gives you that much of an advantage since it is just a step into ones career. It would only show your interest in risk management and your ability to keep studying after college.
What would be interesting is that GARP can make an “add-on” in the future where you can go more into depth of market risk, operational risk, credit risk, etc. This way you can better specialize in one field and the “general FRM designation” would be just the introduction into risk management (covering a bit of everything which is laying the foundations).
They are already doing this with the “ERP” programme. So maybe there will also be an “CRP” (credit risk), “ORP” (operational risk) addition to FRM in the future.
 
I was quite pleased when I saw that the Nov 2010 FRM1 pass rate was below 40%; I figured that the folks at GARP were getting serious about making the FRM a challenging (and thus prestigious) designation – like the CFA.
And so I was disappointed to see the May 2011 pass rates rise well above 50%. I hope this is a temporary situation.
To me, ideal pass rates would be
I suppose that the advantage of high pass rates for GARP is that it leads to more growth in the number of FRM candidates/holders, and then more revenue from membership fees.
 
Wendy Wrote:
——————————————————-
> I suppose that the advantage of high pass rates
> for GARP is that it leads to more growth in the
> number of FRM candidates/holders, and then more
> revenue from membership fees.
That works for CFA, but in the FRM case you dont need to pay fees to keep using the designation. But more candidates will lead to more income, that is correct.
Maybe its just a peak, and pass rates will be much lower again next year.
 
I was also a bit surprised with the jump in the pass rates especially since the curriculum didn’t have a significant turnover. However, given that the FRM has not been around for too long, it is reasonable to expect some volatility in the pass rates. It is true that the CFA has had a downward trend on the pass rate, but it has been around since the 1960’s.
My feeling is that pass rates on the 40’s and 50’s are reasonable. There are a lot of folks taking the FRM after the CFA program just to have another designation. We have all seen the intentions and questions of these folks here in the forum. As a result, 50% to 60% of these guys will fail due to poor preparation. For Level 2, folks have a vested interest in finishing so they prepare well for it. As a result, a pass rate on the 50’s is reasonable.
GARP needs members and holders as a marketing tool in addition to the revenue generation, which I support. Given the momentum in the risk industry, they will be in the sweet spot in the next 5 years or so. It is up to GARP and its members and holders to ensure that the program continues to be relevant, better organized, and expand. These are all things that the CFA Institute has done successfully.
Take care.
 
Lets not forget that the FRM recently switch to 2 levels, as opposed to 1 exam.
The last full exam in November 2009 had a pass rate of 44.1%. The first level 1 exam had a pass rate of 55%, with the first level 2 exam having a pass rate of 54%.
55%*54%= 29.7% pass rate( for L1 and L2 combined).
Despite higher pass rates there are less candidates receiving the designation on the first attempt then there was prior to having multiple levels. It’s more difficult.
 
You must log in or register to reply here.
Back
Top