An adviser requires a thorough knowledge of the various investment products available in the marketplace when providing advice. The circumstances of every individual are unique, and it is essential that an adviser considers which investment products are appropriate to meet the varying needs of a client before making any recommendations. The adviser must be able to explain fully to the client, in a way that they will understand, how each product that is recommended meets the identified financial goals and objectives of the client. Options need to be fully described and the relative advantages and disadvantages of alternatives pointed out.
We start by looking at the characteristics, inherent risks, behaviour and correlation of asset classes before considering the macro-economic environment and its impact on asset classes. We then look at the merits and limitations of the main investment theories and the principles of the time value of money.
The unit looks at the characteristics, risks, behaviours and tax considerations of investment products before looking at the investment advice process, the principles of investment planning and the analysis of performance of investments.
Building a successful career in personal finance
Investment Principles and Risk (R02) is a core unit for the Diploma in Regulated Financial Planning which meets the FCA’s qualification requirements for retail investment advisers. This unit is relevant for paraplanners, technical consultants and those in financial planning support roles. It is also relevant for those seeking additional CII credits towards completion of the Diploma in Financial Planning. those who do not hold additional CII credits counting towards completion of the Diploma in Financial Planning.
Purpose
At the end of this unit, candidates will have investigated the:
- characteristics, inherent risks, behaviour and correlation of asset classes, and investment products;
- macro-economic environment and its impact on asset classes;
- merits and limitations of the main investment theories;
- nature and impact of the main types of risk on investment performance;
- performance of investments.
Assessment
- 2 hour exam
- 100 multiple choice questions
- The nominal pass mark is 65% (for more information on nominal pass marks please see here)
- The 2023 pass rate for this unit was 63.8%
Units treated as equivalent
Due to the extent of syllabus overlap, certain combinations of current and withdrawn units will result in only one award of credits.
If a withdrawn equivalent is held you may not need to complete a current unit in order to satisfy a qualification's completion rules. Clarification should always be sought from CII Customer Service.
Find out more about credit awards for equivalent units
Course delivery
Instructions on accessing your course on RevisionMate will be sent to your registered email address. This is typically within two working days of your order being placed, but may be longer, particularly if payment is made by bank transfer or the unit is available as a pre-order.
Revision aids available ** Please check individual shop pages for availability dates **
The revision aids available for this unit are listed below. Find out more details.
- Key Facts Booklet
- Audio Revision
- Knowledge Checker
- E-learn
Note for purchasing revision aids: please make sure you do not already have the revision aid(s) as part of any Enrolment plus purchase.
Study material - editions available
2024-25 edition (applicable to exams sat 01 Sep 2024 to 31 Aug 2025)
