Friday, May 3, 2013

Is it time for risk certification?

The question above might cause you to respond, "we already have certification programs for risk," and you would, of course, be correct. However, they're for a much broader view of risk than I have in mind. For example, the "FRM" covers much more than risk that those involved in investment management typically see.

During last month's Performance Measurement Forum meeting in Boston, I asked our members if having a certification for risk would be a good idea, and got very good response. The certification would cover:
  • risk measures (e.g., standard deviation, beta, downside deviation, tracking error)
  • risk-adjusted measures (e.g., Sharpe ratio, Treynor ratio, Information ratio, and Modigliani-Modigliani)
  • risk-attribution (e.g., the work that Jose Menchero and Philippe Gregoire have done).
While the CIPM program includes risk, it doesn't to the extent that I'm suggesting.

Two names for the program have already been suggested: CRP (Certified Risk Professional) and CIRP (Certified Investment Risk Professional); others, perhaps more worthy, can be considered.

At this point we're merely floating the idea, to see what folks think.

There's no doubt that risk measurement's role has increased significantly. Many questions continue to surface as to what measures to use, how to calculate them, and how the risk team should be "married to" or "integrated with" the performance folks (or, for that matter, if they should BE the same folks).

Feel free to offer your thoughts.


  1. Interestingly, I received an email earlier this week from a former student in our CIPM prep classes asking what risk measures are now part of the CIPM curriculum. I posted a list on my blog at


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