The AICPCU ‘Associate in Risk Management’ (ARM)

A year or so ago I stumbled upon the ARM designation that is administered through the AICPCU or ‘the Institutes’ for short. What attracted me then to the designation was that it appeared to be a comprehensive approach to performing a risk assessment for scenarios that result in some form of business liability. Unfortunately, I did not start pursuing the designation until July 2012. The base designation consists of passing three tests on the topics of ‘risk assessment’, ‘risk control’ and ‘risk financing’. In addition, there are a few other tests which allows one to extend their designation to include disciplines such as ‘risk management for public entities’ and ‘enterprise risk management’.

I am about two months into my ARM journey and just passed the ARM-54 ‘Risk Assessment’ test. I wanted to share some perspective on the curriculum itself and some differentiators when compared to some other ‘risk assessment’ and ‘risk analysis / risk measurement’ frameworks.

1. Proven Approach. Insurance and risk management practices have been around for centuries. Insurance carriers especially those who write commercial insurance products are very skilled at identifying and understanding the various loss exposures businesses face. Within the information risk management and operational risk management space, many of the loss exposures we care about and look for are the same that insurance carriers may look for when they assess a business for business risk and hazard risk; so they can create a business insurance policy. In other words, the ‘so what’ associated with the bad things we and insurance carriers care about is essentially a business liability that we want to manage. Our problem space / skills and risk treatment options may be slightly different but the goal of our efforts is the same: risk management.

2. Comprehensive. The ARM-54 course alone covers an enormous amount of information. The material easily encompasses the high level learning objectives of six college undergraduate courses I have taken in the last few years:

- Insurance and Risk Management
– Commercial Insurance
– Statistics
– Business Law
– Calculus (Business / Finance Problem Analysis / Calculations)
– Business Finance

The test for ARM-54 was no walk in the park. Even though I passed on the first attempt, I short-changed myself on some of the objectives which caused a little bit of panic on my part. The questions were well written and quite a few of them forced you to understand problem context so you could choose the best answer.

3. ‘Risk Management Value Chain’. Some of the following thoughts are the largest selling points of this designation compared to other IT risk assessment frameworks, IT risk analysis frameworks and IT risk certifications / designations. The ARM curriculum connects the dots between risk assessment activities, risk management decisions and the financial implications of those decisions at various levels of abstraction. This is where existing IT-centric risk assessment / analysis frameworks fall short – they are either to narrow in focus, do not incorporate business context, are not practical to execute or in some cases, not useful at all in helping someone or a business manage risk.

4. Cost Effective. For between $300-$500 per ARM course – one can get some amazing reference material and pay for the test. Compare that to the cost of six university courses (between $6K – $9K) or the cost of one formal risk measurement course (~$1k). I am convinced that any risk management professional can begin applying learned concepts from the ARM-54 text within hours after having been introduced to the text. So just the cost of the text books alone (~$100 give or take) is justified even if you do not take the test(s).

5. Learn How To Fish. Finally, I think it is worth noting that there is nothing proprietary to the objectives and concepts presented in the ARM-54 ‘Risk Assessment’ curriculum. Any statistical probability calculations or mathematical finance problems are exactly that – good ole math and probability calculations. In addition, there is nothing proprietary about the methods or definitions presented as they relate to risk assessments or risk management proper. This is an important selling point to me because there are many information risk management practitioners that are begging for curricula or training such as ARM where they can begin applying what they are learning and not be dependent on proprietary tools, proprietary calculations or pay for the license to use a proprietary framework.

In closing, the ARM-54 curriculum is a very comprehensive risk management curriculum that establishes business context, introduces proven risk assessment methods, and reinforces sound risk management principals. In my opinion, it is very practical for the information / operational risk management professional – especially those that are new to risk management or looking for a non-IT or non-security biased approach to risk management – regardless of the industry you work in.

So there you have it. I am really psyched about this designation and the benefits I am already realizing in my job as a Sr. Risk Advisor for a Fortune 200 financial services firm. I wish I would have pursued this designation two years ago but I am optimistic that I will make for lost time and tangible business value very quickly.

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3 Responses to The AICPCU ‘Associate in Risk Management’ (ARM)

  1. Prathibha says:

    Dear Chris Hayes, Thank you for the detailed analysis of ARM Course. Since many number of professional bodies offers risk-related qualifications and certifications, I am being a Finance graduate student I have spent 5-6 hours going through different blogs and reading their experiences and finding out which Risk Management course will more suitable for my knowledge and skills. After going through your perspective on the ARM curriculum and the value it brings in for the risk professionals, I decided to stick to ARM course. Your two hours of such comprehensive review will help student like me to make informed decision on my certification. I wanted to thank you for sharing your analysis and wish you good luck with the remaining ARM-55 and ARM-56 courses. Regards Prathi

  2. Cynthia Barnes says:

    I am taking the last of the three courses. I passed the first two, failed the third–primarily because I didn’t expect all the gobbledygook in the final chapters about investment risk, didn’t have enough time to study it, and also did not even bring a calculator to the ARM III exam (fall 2012). In the meantime, I rescheduled, had a serious injury, and rescheduled again with their permission for the late fall of 2013.

    The net was that they revised the final ARM III textbook and hopefully improved that. I have some serious qualms about derivatives and the like being a form of “risk finance” and think there should be some tighter regulation. However I never took a graduate course in financial algorithms on derivative predictions and such, so can’t argue my concerns. Nevertheless I am hoping to pass the third part because the certification is useful in my line of work.

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