Posted By: Kaplan Schweser
Updated January 28, 2021
GARP is an abbreviation of Global Association of Risk Professionals, the preeminent globally recognized non-profit membership association for risk managers. As part of its mission, GARP is dedicated to advancing the risk profession globally. In this article, you’ll learn about the history of GARP, its structure and activities, and how it relates to the FRM® certification and you.
According to a finance publication that was popular in the 1990s, GARP was founded in 1996 by Marc Lore and Lev Borodovsky, two risk managers. They had been meeting once a week at a New York pub to talk about their chosen field with other risk colleagues and decided that a more formal organization would benefit other risk professionals. About six months later, they had 250 members from 23 countries. Before long, local chapters from around the world had been established by regional directors, offering programs for local members.
In 1997, a year after they founded GARP, Lore and Borodovsky introduced the Financial Risk Manager (FRM) certification, which could be earned by paying a fee and passing an exam. Since the FRM designation was introduced, financial risk management has become entrenched in most firms. An estimated 50,000 people have earned the certification.
Fast forward to today. Based on the information on their LinkedIn page, GARP has 150,000 members from 195 countries. Lore and Borodovsky have left the organization, and it is now headed up by a Board of Trustees. The current chairman is Bradford Hu, Chief Risk Officer at CitiGroup. Twenty-eight Chapter Directors represent 20 chapters in more than 12 countries around the world, giving risk professionals the opportunity to meet and learn from one another.
GARP members have a voice in industry research, numerous opportunities to network, and access to risk intelligence. They also participate in local, national, and global events. They have access to risk-related content, discounts on GARP products and the annual GARP convention, and special offers from GARP partners. Interestingly, you do not have to be a member of GARP to maintain either of their risk certifications.
GARP primarily sees its mission as providing research, offering education, and promoting risk best practices. In addition to the FRM certification, which is now considered the globally recognized standard for those who manage financial risk, GARP also offers the Energy Risk Professional (ERP®) certification, a designation for energy professionals.
Beyond the designations, the organization also leads the GARP Benchmarking Initiative and the GARP Risk Institute. The non-partisan GARP Benchmarking Initiative analyzes regulatory quantitative impact studies. The GARP Risk Institute offers risk thought leadership and research, uncovering trends and challenges in risk management and its industries. Aiming for unbiased analysis of critical issues, the institute also publishes articles and reports on financial and environmental risk topics.
GARP administers the FRM certification and provides the content for Part I and Part II of the FRM exam, which has traditionally been offered in May and November of each year, but in 2021, Part I will be offered in May, July, and November, and Part II will be offered in May and December. (This FRM exam FAQ has all the details.) Holding the FRM certification demonstrates proficiency in managing exposure to operational, credit, market, foreign exchange, volatility, liquidity, inflation, business, legal, reputational, and sector risk. You can find FRM professionals in many different companies and businesses.
To earn your FRM certification, you need to take and pass both parts of the FRM exam. There are no degree or work requirements for taking the exams. However, you must work full-time in a financial risk role for two years and demonstrate your experience to GARP within five years of passing Part II of the exam. To do this, you describe your professional role in financial risk management and submit it to GARP. The cost to take the exam ranges from $550 to $750 for each part, based on when you register with GARP. There is an additional $400 enrollment fee for the exam.
If a career in financial risk is your goal, a GARP membership can help you achieve it. You’ll have access to a career center and networking opportunities. Plus, earning the FRM will definitely give your career a boost. If you’re interested, you can explore FRM study packages that can increase your odds of passing the FRM exam the first time and earning your certification.