This question comes up at least once a week: “Hi Alex, I am a [research economist/trader/risk manager/…] at [energy/power company] and wonder if the ERP is right for me for a career boost. I am currently also studying for an MBA at […]. What you would advise?”
It’s an important question, one that I also asked myself before I studied for the ERP. Here some pointers that may help you in your decision based on my own experience and discussions with other Energy Risk Professionals.
ERP vs. Bachelor’s
For starters, an important thing to understand is that the ERP is not a degree but a professional qualification. So unless you already possess a degree level education, you could not compare the ERP with a university degree or an MBA. Most corporate jobs nowadays necessitate a bachelor’s (BSc or BA) or a master’s (MSc or MA) degree in some form or another, so if you want to climb up the corporate level fast, you first will need at least a bachelor’s degree. This is also a prerequisite to register for the ERP but can be gotten around by means of at least four years of professional work experience.
If you already have a bachelor’s degree or are studying for one and you are working in the energy sector, I recommend you absolutely go for the ERP next to your work/studies. If you don’t have a bachelor’s but enough work experience, the ERP will still help you in your job, and a big plus is that you can do it next to your work at your own pace. It’s really more a matter of priorities, but in general, anyone working in the energy sector could profit from the Energy Risk Professional designation.
ERP vs. Energy MBA
Many business schools offer an MBA in international energy or something similar. An MBA in general is definitely more involved (and much more expensive) than the ERP, and again, the MBA is a degree, while the ERP is “only” a professional designation. An important distinction is that the ERP is geared towards risk management alone, while the MBA also includes management and an array of organizational skills such as marketing and sales.
The applications for an ERP are different from an MBA: The MBA candidate would want to work in an executive position as a director or CEO, while the ERP is geared towards risk management, and not leadership or team management. So if you know you want to work in risk management specifically, the ERP would be preferred, otherwise the MBA will give you a broader education for future career enhancement. If you can do both, that would be ideal in my opinion, but carefully weigh the cost and the benefits with what you really want to do (risk management vs. general management) first.
ERP vs. FRM/CFA/CAIA
GARP offers also the FRM (Financial Risk Manager), which often goes in line with the CFA (Chartered Financial Analyst) and the CAIA (Chartered Alternative Investment Analyst). CFA or CAIA charterholders often also have an FRM. The Energy Risk Professional is the newest of all these professional designations and the only one that really involves energy. Commodities are also part of the CFA and the CAIA curriculum, but only at the margin, while the ERP covers extensively options and financial instruments used for risk management in the energy and financial sector.
In my opinion, these designations are complimentary. So you should not sacrifice one for the other if you have already enrolled. For example, if you’re currently studying for CFA Level 2 but are interested in the ERP also, don’t give up on the CFA but try to do both! There are not many charterholders yet who have the ERP next to the CFA and/or the CAIA, so this may give you an edge. Just do a search on Linkedin for “CFA ERP”, you will be surprised!
As you can see, I would advise almost anyone working or interested in energy to go for the ERP. Why? Mostly, because while it is still relatively new the designation will definitely grow in acceptance and importance in the years to come. I wrote a separate blog post about Energy Risk Professional job prospects, feel free to check it out.
In a nutshell, getting a secondary or tertiary education is always an asset both for yourself and for your employer. If you’re constantly improving your skills you will be bound to send a positive signal to your employer when the time of promotions comes up, and you will possess important and necessary skills that have the potential to give you a career boost.