R02 Exam | Investment Principles and Risk

R02 Exam | Investment Principles and Risk
R02 Exam

R02 Investment principles and risk

Investment principles and risk is one of the six core units that make up the CII Diploma in Regulated Financial Planning. It accounts for 20 of the 100 credits that are needed. That makes it one of the ‘meatiest’ units in the diploma suite.

The CII describe R02 as a subject that “develops your knowledge and understanding of investment products and the application of the investment advice process.” This recognises the fact that a robust knowledge of the various investment products available in the marketplace is key when advising clients.

The investment principles covered in R02, spill over into R03, 4, 5 and 6, so can be considered part of the base knowledge needed in order for the subjects covered in the other R0s to make sense.

Many candidates find the R02 a tough exam to crack because it covers a wide range of investment topics that they might never have studied before. 

The R02 exam is two hours long and there are 100 questions to answer; 72 standard multiple-choice questions and 28 multi-response questions.

Exam format: 2-hour multiple choice exam

ExamRecommended study hoursCreditsPass markNational pass rate (2021)

What are the challenges with the R02 exam?

The first thing to say is that many of the questions in R02 may be asking you about a particular subject, for example OEICs, but the answer options often include elements that relate to other investments, such as Investment Bonds.

So, in order to answer the question on the OEIC you have to be clear that features such as ‘the 5% rule’ or ‘top-slicing’ apply to Bonds, not OEICS.

This means that each question could actually be testing application of knowledge from more than one learning outcome.

Add to this the fact that many candidates find the CII question wording tricky to decipher, and the result is often that it feels like more than one of the answer choices could be right! That’s because subjects such as ‘risk’ and ‘most appropriate solution’ are not black and white. Investing is full of grey areas.

You also need to be ready for the fact that the R02 exam questions will feel wordier than you expect. They are notoriously full of extra text that may not be relevant to the question being asked or are fundamental in being able to identify the right answer!

As we mentioned, R02 has a wide syllabus, so candidates need to make sure that they don’t spend too much of their study effort on one subject at the expense of others. You can pass R02 if you forget a few of the more detailed facts around a particular subject, but your base knowledge must be solid as a rock. The national pass rate for R02 in 2021 was 65%.

BTS R02 Study Toolkit

To help you to build your R02 study plan and pass first time, we have put together a range of study and training options in our BTS R02 Study Toolkit. Toolkits contain several options to suit different candidate needs and preferences. These include printed and digital resources, e-Learning modules, workshops, and practice question banks.

BTS Toolkits for R01 to R05 all follow the same approach: the STEP model. BTS have found over the years that this leads to the best exam results for candidates. This approach and the options within our BTS Toolkits are tried and tested on tens of thousands of learners over our long record of regulated exam support. As a result, BTS have a first-class market reputation for R0 support.


This approach has helped thousands of trainee financial advisers, paraplanners, administrators and managers pass the R0 exams on their first attempt.

Our mission is clear

To maximise your chances of success in regulated exams, we follow a simple model based on our proven STEP approach:

Investment Principle and Risk

The R02 syllabus is wide, and the BTS R02 study guide doesn’t cut any corners. It is a complete replacement for the examining body textbook but is written in a different way.

You will find that the guide is crammed with graphics and examples, so that you can build your knowledge step-by-step. BTS study guides always keep an eye on how we can bring the subject matter to life as much as is humanly possible! You’ll also get exam relevant content and questions, with a thread of BTS humour thrown in for good measure; anything that can help you remember the subject.

R02 Investment principles and risk – Printed Study Guide

R02 Investment principles and risk – Digital Study Guide

BTS R02 training receives fantastic feedback, as you can see from the testimonials below.

BTS Associate facilitators are skilled at bringing key subjects to life through examples, visuals and exam style practice questions. They will paint pictures to help unravel the technical details of the various investments so that you understand them and can then apply that understanding to exam questions.

R02 revision workshops are added to the events calendar throughout the year. If you can't see a date that works for you, get in touch to ask about other options.

BTS e-Learning is ideal for individuals who learn best using visual, online and interactive tools. It allows you to work through your R02 studies at your own pace, with the BTS team behind you all the way. The BTS R02 e-Learning module covers the most heavily weighted R02 learning outcomes, including…

L01 which is all about the different asset classes and some alternative investments.  L06 which examines the various collectives and investment products. L07 covering the advice process, and L08 focussing in the investment planning principles.

You can dip in and out of the eLearning as and when you have some study time.

R02 Investment principles and risk – e-Learning Module

The BTS R0 Study Buddy app replicates the CII exam standard as closely as possible. There are two volumes of R02 questions available for purchase – each giving you 400 questions to practice on. BTS designers sit the R02 exam every year, and train tens of thousands of students. All this experience is packed into our App questions.

The exam itself will still feel a bit harder, after all you are in an exam with all those associated nerves, but the App will make sure you have experience is applying your knowledge to different styles of exam questions.

R0 Study Buddy App - Exam Standard Question Volumes for R01 - R05

What sort of feedback do BTS receive from the R02 candidates we have supported?

BTS R02 Learner Journeys

Click on the profiles below to find out how recent BTS candidates achieved their R02 success: