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Your Journey to Becoming A Financial Advisor
Welcome To Solo R04
One of the larger modules towards Diploma completion. The aim of the R02 exam is to build knowledge and understanding of asset classes, investment products and the investment advice process.
Main topics covered:
- Introduction to the main asset classes, their behaviours and risks.
- The impact of the macro-economy on different asset classes.
- Main types of risk to investment performance.
- Exploration of investment products available to UK investors, their risks, taxation and suitability.
- Introduction to the main asset classes, their behaviours and risks.
- The impact of the macro-economy on different asset classes.
- Introduction to investment theory.
- The investment advice process. Measuring the performance of investments.
- Take calculator into your exam
- You will be given the most recent tax tables – familiarise yourself with them beforehand!
- RO2 is a computer based exam
- 65 % is the nominal pass mark
- You will have 2 hours to complete your exam
- After submitting, you will notified of a pass or fail immediately. A breakdown of your results will be sent within 15 working days…
- The exam will consist of 100 questions
- 72 in standard format (one answer from four available options)
- 28 in multiple response format (more than one answer from four-six available options).
Course Overview
- 22.5 hours (1.5 weeks)
Cash Investments
- Risk of cash based investments
- Types of cash account
- NS&I products
- Money Market Instruments
Fixed interest
- General characteristics of fixed interest securities
- Bond Yields
- Bond Risks
- Gilts
- Corporate Bonds
Equities
- Dealing in shares
- Types of shares
- Equity risks
- Private equity
- Market indices
Investment ratios
- Earning per share
- Dividend Yield
- Divdend cover
- Price/Earnings (P/E) Ratio
- Net Asset Value (NAV)
- Limitations of Investment Ratios
Property Investments
- Selecting property & the risks
- Rental Yield
- Stamp duty land tax
- Rent-a-room relief
- Collectables
- Commodities
Alternative Investments
- Collectables
- Commodities
Solo 1 Tests
- Solo 1 1
- Solo 1 2
- Solo 1 3
- 22.5 hours (1.5 weeks)
OEICs & Unit Trusts
- General characteristics of OEICs & Unit Trusts
- Passive vs Active Funds
- Diversification Rules
- Unit Trusts People Involved
- Income vs. Accumulation Units
- Taxation of OEICs and Unit Trusts
- Multi-Manager Funds
Offshore Funds
- Offshore Funds Taxation
Investment Trusts
- Investment Trusts - Introduction
- Investment Trusts - Share Classes
- Investment Trusts - Warrants
Life Assuarnce Based Investments
- Intro to life assurance based investments
- With profits policies - market value reduction
- Unitised vs. Conventional With Profits Policies
- Pound Cost Averaging
- Early Encashment of Life Assurance Policies
- Taxation of Life Assurance Policies
- Second Hand Life Assurance Policies
Onshore & Offshore Bonds
- What are Onshore and Offshore Bonds
- Onshore vs. Offshore Bonds
ETFs
- Exchange Traded Funds
Property Based Investments
- Types of Property Based Investments
EIS, SEIS & VCT
- EIS
- SEIS
- VCT
ISAs
- What is an ISA
- CTF vs. JISA
Derivatives
- What is a Derivative
- Futures
- Options
Hedge Funds
- Hedge Fund Strategies
- Hedge Fund Strategies
- What is a Structured Product
Solo 2 Tests
- Solo 2 1
- Solo 2 2
- Solo 3 3
- 15 hours (1 week. Solo 3 and 4)
Trends in Investment Markets
Economic Cycles
- The Business Cycle
- PSNCR
- Business Cycle Impact on Asset Classes
Fiscal & Monetary Policy
- Fiscal Policy
- Monetary Policy
Money Supply
Inflation
- Types of Inflation
- Impact on Asset Classes
Interest Rates
- Impact on Asset Classes
Balance of Payments
Solo 3 Tests
- Test 1
- Test 2
- Test 3
- 15 hours (1 week. Solo 3 and 4)
Time Value of Money Definitions
Calculating Compound Interest
APR/AER/EAR
Calculating Present Investment Needed
Accumulation of Regular Savings
Real vs. Nominal Returns
Solo 4 Tests
- Test 1
- Test 2
- Test 3
- 15 hours (1 week. Solo 5, 6 and 7)
Standard Deviation
Correlation
Efficient Frontier
Systematic vs. Non-Systematic Risk
Beta
CAPM
Multi-Factor Models
Efficient Market Hypothesis
Behavioural Finance
Solo 5 Tests
- Test 1
- Test 2
- Test 3
- 15 hours (1 week. Solo 5, 6 and 7)
Main Types of Risk
Diversification
Gearing
Solo 6 Tests
- Test 1
- Test 2
- Test 3
- 15 hours (1 week. Solo 5, 6 and 7)
Money-Weighted Rate of Return
Time-Weighted Rate of Return
Sharpe Ratio
Alpha
Information Ratio
Solo 7 Tests
- Test 1
- 15 hours (1 week. Solo 8 and 9)
The Investment Advice Process
Positive vs. Negative Screening
Investor Risk Tolerance
Investor Return Objectives
Constraints on Investment Advice
Risk Profiling Clients
Capacity for Loss vs. Tolerance of Risk
Solo 8 Tests
- Test 1
- Test 2
- Test 3
- 15 hours (1 week. Solo 8 and 9)
Theorectical vs. Pragmatic Approaches to Asset Allocation
Strategic vs. Tactical Asset Allocation
Portfolio Construction - Top Down vs. Bottom Up
Fund Management Styles
Fund Selection Criteria
Selecting a Tax Wrapper
Rebalancing a Client Portfolio
Solo 9 Tests
- Test 1
- Test 2
- Test 3
- Test 1
- Test 2
- Test 3