PracticeVideosBlogFlashcardsEspañol
All Practice Exams

100+ Free CISI Investment Advice Diploma Practice Questions

Pass your CISI Level 4 Investment Advice Diploma (IAD) exam on the first try — instant access, no signup required.

✓ No registration✓ No credit card✓ No hidden fees✓ Start practicing immediately
Not published Pass Rate
100+ Questions
100% Free
1 / 100
Question 1
Score: 0/0

An equity (ordinary share) represents which of the following for the holder?

A
B
C
D
to track
Same family resources

Explore More CISI Qualifications

Continue into nearby exams from the same family. Each card keeps practice questions, study guides, flashcards, videos, and articles in one place.

CISI Certificate in Investment Management (Investment Management Certificate / IMC)

Practice Questions

CISI Chartered Wealth Manager Qualification (CWM)

Practice Questions

CISI Derivatives (Investment Operations Certificate unit)

Practice Questions

CISI Global Financial Compliance (Investment Operations Certificate unit)

Practice Questions

CISI Global Securities Operations (Investment Operations Certificate unit)

Practice Questions

CISI International Introduction to Securities and Investment

Practice Questions
2026 Statistics

Key Facts: CISI Investment Advice Diploma Exam

80

MCQ per Objective Unit

CISI IAD Factsheet

2 hours

Per MCQ Unit

CISI IAD Factsheet

70%

Pass Mark

CISI / Accredited Training Partners

Level 4

Ofqual RQF Level

CISI IAD Factsheet

140 hrs

Study Time per Unit

CISI IAD Factsheet

426 hrs

Total Qualification Time

CISI IAD Factsheet

The CISI Investment Advice Diploma (IAD) is an Ofqual-regulated Level 4 diploma and an FCA appropriate qualification for retail investment advice. It is achieved by passing two core units, UK Regulation & Professional Integrity and Investment, Risk & Taxation, plus one specialist unit (Securities, Derivatives or Financial Planning & Advice). Four of the five available units are 2-hour computer-based assessments of 80 multiple-choice questions, while the Private Client Advice option is a 3-hour paper-based narrative exam held in June and December. The pass mark for each MCQ unit is 70%, typically 56 of 80 marks. CISI recommends around 140 study hours per unit (426 total qualification hours). Exams can be sat by remote invigilation or at CISI CBT centres.

Sample CISI Investment Advice Diploma Practice Questions

Try these sample questions to test your CISI Investment Advice Diploma exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1Under the UK regulatory architecture introduced by the Financial Services Act 2012, which body is the conduct regulator responsible for the regulation of retail investment advice firms?
A.The Financial Conduct Authority (FCA)
B.The Prudential Regulation Authority (PRA)
C.The Financial Policy Committee (FPC)
D.The Bank of England
Explanation: The Financial Conduct Authority (FCA) is the conduct regulator for around 50,000 firms and the prudential regulator for those not supervised by the PRA. Retail investment advice firms are conduct-regulated by the FCA.
2An adviser recommends a structured product to a retail client without considering whether the client could bear the potential capital loss. Which FCA Conduct of Business Sourcebook (COBS) requirement has most clearly been breached?
A.The financial promotions rule in COBS 4
B.The suitability requirement in COBS 9
C.The aggregation rule in COBS 11
D.The client categorisation rule in COBS 3
Explanation: COBS 9 requires a firm giving a personal recommendation to ensure it is suitable, taking account of the client's knowledge and experience, financial situation (including ability to bear loss) and investment objectives. Ignoring capacity for loss breaches suitability.
3The FCA's Consumer Duty introduces a new Principle 12 requiring firms to deliver good outcomes for retail customers. Which of the following is NOT one of the four outcomes the Duty focuses on?
A.Products and services
B.Price and value
C.Maximising shareholder returns
D.Consumer support
Explanation: The Consumer Duty's four outcomes are products and services, price and value, consumer understanding, and consumer support. Maximising shareholder returns is a commercial goal, not a Consumer Duty outcome and may conflict with delivering good consumer outcomes.
4A retail client is unhappy with the service from an authorised firm and the firm's final response does not resolve the complaint. To which body can the client refer the complaint for free, independent adjudication?
A.The Financial Services Compensation Scheme (FSCS)
B.The Prudential Regulation Authority (PRA)
C.The Competition and Markets Authority (CMA)
D.The Financial Ombudsman Service (FOS)
Explanation: The Financial Ombudsman Service resolves disputes between consumers and financial firms once the firm's internal complaints process is exhausted. Its service is free to consumers and its decisions are binding on the firm if the consumer accepts them.
5Which statement best describes the maximum protection currently available under the Financial Services Compensation Scheme (FSCS) for an eligible claim relating to investment business?
A.GBP 85,000 per eligible person per firm
B.GBP 50,000 per eligible person per firm
C.100% of the claim with no upper limit
D.GBP 170,000 per eligible person per firm
Explanation: For protected investment business, the FSCS covers 100% of an eligible claim up to a maximum of GBP 85,000 per person per firm. This limit aligns with the deposit protection limit and applies to bad advice and failed investment firms.
6Under the Money Laundering Regulations and the FCA's financial crime rules, what is the primary purpose of conducting Customer Due Diligence (CDD)?
A.To assess the client's appetite for investment risk
B.To verify the customer's identity and understand the nature of the business relationship
C.To calculate the client's income tax liability
D.To determine the suitability of a personal recommendation
Explanation: CDD requires firms to identify and verify the customer (and any beneficial owner) and to understand the purpose and intended nature of the relationship. This underpins the anti-money-laundering framework by deterring and detecting illicit funds.
7Under the UK Market Abuse Regulation (UK MAR), an individual deals in a company's shares while in possession of non-public, price-sensitive information about an imminent takeover. This is an example of which civil offence?
A.Unlawful disclosure
B.Market manipulation
C.Insider dealing
D.Misleading statements
Explanation: Insider dealing under UK MAR occurs when a person uses inside information by acquiring or disposing of financial instruments to which that information relates. Dealing ahead of an undisclosed takeover on inside information is the classic example.
8Within the FCA's Senior Managers and Certification Regime (SM&CR), what is the main purpose of the 'Statement of Responsibilities' that accompanies each Senior Management Function?
A.It records the firm's regulatory capital position
B.It lists the firm's approved investment products
C.It documents the client's investment objectives
D.It sets out clearly the aspects of the firm's affairs for which the senior manager is responsible
Explanation: Each senior manager must have a single Statement of Responsibilities clearly describing the areas of the business for which they are responsible and accountable. This supports individual accountability, a core aim of the SM&CR.
9An adviser discovers that recommending a particular fund would earn the firm a higher payment than an equally suitable alternative. Acting with integrity, what is the most appropriate course of action?
A.Manage the conflict of interest and recommend the option that best serves the client's interests
B.Recommend the higher-paying fund to maximise firm revenue
C.Recommend neither fund and decline to advise
D.Disclose the conflict only if the client specifically asks
Explanation: Professional integrity and the FCA's Principles require firms to manage conflicts of interest fairly and to act in the client's best interests. Where two options are equally suitable, the client's interests must take priority over the firm's remuneration.
10A firm classifies a sophisticated investment business as a 'professional client' rather than a 'retail client'. What is the main consequence of this categorisation under COBS?
A.The client receives a higher level of regulatory protection
B.The client receives a lower level of regulatory protection and certain rules do not apply
C.The client must pay a higher FSCS levy
D.The client automatically loses access to the Financial Ombudsman Service
Explanation: Retail clients receive the highest level of protection. A professional client is assumed to have greater knowledge and experience, so some protections (such as certain disclosure and suitability presumptions) are reduced or do not apply.

About the CISI Investment Advice Diploma Exam

The CISI Investment Advice Diploma is a Level 4 (RQF) FCA appropriate qualification for retail investment advisers. It comprises two core multiple-choice units (UK Regulation & Professional Integrity and Investment, Risk & Taxation) plus one specialist unit chosen from Securities, Derivatives or Financial Planning & Advice.

Questions

80 scored questions

Time Limit

2 hours per multiple-choice unit

Passing Score

70% (typically 56 of 80 marks) per multiple-choice unit

Exam Fee

Per-unit CISI exam entry fee plus workbook; see cisi.org/prices for current prices (Chartered Institute for Securities & Investment (CISI))

CISI Investment Advice Diploma Exam Content Outline

Core unit

Unit 1: UK Regulation & Professional Integrity

UK financial services industry, FCA and PRA framework, FSMA, authorisation, financial crime and market abuse, conduct of business, Consumer Duty, complaints, FSCS, integrity and ethics.

Core unit

Unit 2: Investment, Risk & Taxation

Asset classes, macroeconomic environment, principles of investment risk and return, taxation of investors and investments, investment products, planning, advice and portfolio performance review.

Specialist option

Specialist: Securities

Equities, bonds and gilts, markets and indices, trading and market makers, settlement and custody (CREST), corporate actions and securities administration (FCA activities 2 and 12).

Specialist option

Specialist: Derivatives

Futures, options and swaps, underlying markets, trading, clearing and margin, and the regulation and use of financial and commodity derivatives (FCA activities 3 and 13).

Specialist option

Specialist: Financial Planning & Advice

Advising on retail investment products and friendly society tax-exempt policies, protection, pensions and retirement planning (FCA activities 4 and 6).

Specialist option

Specialist: Private Client Advice (paper-based)

Narrative, scenario-based application of advice skills assessed in a 3-hour paper-based examination held in June and December each year.

How to Pass the CISI Investment Advice Diploma Exam

What You Need to Know

  • Passing score: 70% (typically 56 of 80 marks) per multiple-choice unit
  • Exam length: 80 questions
  • Time limit: 2 hours per multiple-choice unit
  • Exam fee: Per-unit CISI exam entry fee plus workbook; see cisi.org/prices for current prices

Keys to Passing

  • Complete 500+ practice questions
  • Score 80%+ consistently before scheduling
  • Focus on highest-weighted sections
  • Use our AI tutor for tough concepts

CISI Investment Advice Diploma Study Tips from Top Performers

1Study UK Regulation & Professional Integrity first, as its regulatory framework underpins suitability and conduct questions in the other units.
2Use the current CISI workbook, since UK regulation, tax allowances and the Consumer Duty are updated and the exam tests the latest edition.
3Practise applying the 70% pass mark by completing timed 80-question mocks until you consistently score above 56 marks.
4For Investment, Risk & Taxation, drill the tax rules (ISA, CGT, dividend, IHT and pension reliefs) because numbers change between tax years.
5Build an error log tagging mistakes by unit and topic, such as conduct of business, asset classes, risk measures and taxation.
6Rehearse two-hour, single-best-answer pacing so you average under 90 seconds per multiple-choice question with time to review.

Frequently Asked Questions

How many questions and units are in the CISI Investment Advice Diploma?

The IAD is achieved by passing three units. Each objective unit (UK Regulation & Professional Integrity, Investment, Risk & Taxation, and the Securities, Derivatives or Financial Planning & Advice specialist) is a 2-hour computer-based exam of 80 multiple-choice questions. The Private Client Advice option is a 3-hour paper-based narrative exam.

What is the CISI IAD pass mark?

The pass mark for each multiple-choice IAD unit is 70%, which typically equates to 56 of the 80 marks available in a 2-hour exam. Candidates must pass both core units plus one specialist unit to earn the diploma.

Is the CISI IAD an FCA appropriate qualification?

Yes. The Investment Advice Diploma is RDR-compliant and appears on the FCA's Appropriate Qualification tables for advising on and/or dealing in securities or derivatives and advising on retail investment products and friendly society tax-exempt policies.

What level is the CISI Investment Advice Diploma?

The IAD is regulated by Ofqual as a Level 4 (RQF) Diploma in Investment Advice, equivalent to a Level 5 on the European Qualifications Framework. The Total Qualification Time is 426 hours.

How much study time does the CISI IAD require?

CISI recommends about 140 hours of study per unit. With two core units and one specialist unit, candidates should plan a substantial study commitment across the diploma.

Can I sit the CISI IAD exams remotely?

Yes. CISI multiple-choice exams can be taken by remote invigilation or at CISI Computer Based Testing centres. The paper-based Private Client Advice option is offered in June and December.

Are there exemptions for the CISI IAD?

CISI grants an exemption from one of the two core units (UK Regulation & Professional Integrity or Investment, Risk & Taxation) to applicants holding appropriate CFA UK, LIBF or CII qualifications, subject to CISI's current exemption policy.

What can I do after passing the CISI IAD?

On completion you can use the Associate (ACSI) designation and progress to higher CISI qualifications such as the Certificate in Private Client Investment Advice & Management, the Chartered Wealth Manager Qualification, or pursue Certified Financial Planner certification.