CeMAP Module 1 (FRE): Everything You Need to Know

What Is CeMAP Module 1?

CeMAP Module 1, officially titled Financial Services, Regulation and Ethics (FRE), is the first module you will tackle on your journey to becoming a qualified mortgage adviser. It lays the groundwork for everything that follows by giving you a thorough understanding of how the UK financial services industry is structured, regulated, and held to account.

Module 1 is divided into two distinct units: FRE1 (Industry, Regulation and Key Parties) and FRE2 (Skills, Principles and Ethical Behaviours). Together they cover 13 topics that span the full breadth of UK financial regulation and professional conduct.

The Exam at a Glance

Before diving into the content, here is what to expect on exam day:

• Number of questions: 100 multiple-choice questions
• Pass mark: 70% (you need at least 70 correct answers)
• Time limit: The exam is taken under timed conditions at an approved centre
• Format: Each question has four possible answers (A-D); only one is correct

The 70% threshold is the same across all three CeMAP modules, but Module 1 often catches people off guard. The regulatory content can feel dense and unfamiliar, especially if you do not have a background in financial services. The good news is that with the right preparation, it is entirely manageable.

Unit FRE1: Industry, Regulation and Key Parties

FRE1 is the larger of the two units, covering eight topics that build your knowledge of the UK financial landscape from the ground up.

1. Structure of UK Financial Markets

This topic introduces the key markets — money markets, capital markets, and foreign exchange — and explains how they interact. You will learn about the main participants, from retail banks and building societies to investment firms and insurance companies.

2. Role of Government and Taxation

Expect questions on how government policy affects financial services, including the role of HM Treasury and the Bank of England. You will also need to understand the basics of income tax, capital gains tax, inheritance tax, and stamp duty as they relate to property and financial products.

3. Legal Principles Underpinning Financial Advice

This covers the legal foundations that regulate how financial advice is given, including contract law basics, the law of agency, data protection obligations (GDPR), and the difference between regulated and unregulated activities.

4. Development of UK Financial Regulation

A historical overview of how financial regulation has evolved in the UK, from self-regulation through to the establishment of the Financial Services Authority (FSA) and its eventual replacement by the current twin-peaks model.

5. Responsibilities of the PRA

The Prudential Regulation Authority (PRA), part of the Bank of England, is responsible for the prudential regulation of banks, building societies, and insurers. You will need to understand its objectives, how it supervises firms, and the difference between prudential and conduct regulation.

6. Role and Powers of the FCA

The Financial Conduct Authority (FCA) is central to the CeMAP syllabus. This topic covers the FCA's statutory objectives, its regulatory powers (including authorisation, supervision, and enforcement), the Financial Services Register, and how it protects consumers.

7. Overview of Key Financial Products

A broad survey of the products you will encounter in practice: savings accounts, ISAs, pensions, investments, insurance, and of course mortgages. The exam tests your ability to distinguish between product types and understand their basic features.

8. The Role of Financial Institutions

This topic examines the different types of institutions that operate in the UK market — retail banks, building societies, specialist lenders, insurance companies, and intermediaries — and explains how they are regulated.

FRE1 is available as a free practice unit on GoCeMAP, so you can start testing your knowledge of these eight topics straight away without any commitment.

Unit FRE2: Skills, Principles and Ethical Behaviours

FRE2 is smaller with five topics, but do not underestimate it. The questions tend to be more scenario-based, testing your understanding of professional conduct rather than pure factual recall.

9. The Advice Process

This covers the end-to-end process of giving financial advice: establishing a client's needs, researching suitable products, making a recommendation, and ongoing review. You will need to understand the difference between independent and restricted advice.

10. Building Trust with Clients

Expect questions on how advisers establish and maintain trust, including clear communication, managing expectations, and acting in the client's best interests. This topic often overlaps with the FCA's Treating Customers Fairly outcomes.

11. Consumer Rights and Protection

This covers the key consumer protection mechanisms: the Financial Ombudsman Service (FOS), the Financial Services Compensation Scheme (FSCS), complaints handling procedures, and the rights consumers have when things go wrong.

12. Ethical Principles and Professional Behaviour

You will be tested on the ethical framework that governs professional conduct in financial services, including conflicts of interest, confidentiality, continuing professional development (CPD), and the standards set by professional bodies like the London Institute of Banking & Finance (LIBF).

13. FCA Consumer Duty Framework

The Consumer Duty, introduced in 2023, is the FCA's flagship initiative for raising standards across financial services. This topic covers the four outcomes — products and services, price and value, consumer understanding, and consumer support — and how they apply in practice. Given its importance, expect several exam questions on this area.

Study Tips for Module 1

Module 1 has a reputation for being the module that students underestimate most. The regulatory content can feel dry compared to the more practical mortgage topics in Modules 2 and 3. Here is how to stay on track:

Use Practice Questions Early and Often

Regulatory content is difficult to absorb through reading alone. Practice questions force you to apply what you have learned and highlight gaps in your knowledge before exam day. Active recall — testing yourself rather than re-reading notes — is one of the most effective study techniques backed by research.

Focus on the FCA and PRA

These two regulators come up repeatedly throughout the exam. Make sure you can clearly distinguish between them: the PRA focuses on the financial stability of firms, while the FCA focuses on how firms treat their customers. If you can confidently answer questions about their respective roles and powers, you are well on your way.

Do Not Skip the Consumer Duty

The FCA Consumer Duty is a relatively new addition to the syllabus and is heavily tested. Understand the four outcomes and be prepared to apply them to short scenarios in the exam.

Break It Down by Topic

With 13 topics across two units, it helps to work through them systematically. Spend a few days on each topic, complete the relevant practice questions, then move on. Coming back to revise weaker areas in the final week before your exam is far more effective than trying to cram everything at once.

Give Yourself Enough Time

Most students need two to three weeks of focused study for Module 1, assuming around 10-15 hours per week. If you are studying alongside full-time work, allow a little more time to avoid rushing through the material.

Start Practising for Free

The best way to prepare for Module 1 is to start answering questions as soon as possible. GoCeMAP offers the entire FRE1 unit as a free practice resource, covering all eight topics from the Industry, Regulation and Key Parties unit.

Start free FRE1 practice and see how you measure up against the exam standard — no sign-up required for your first session.

Whether you are just beginning your CeMAP journey or revising for a retake, building a strong Module 1 foundation will pay dividends when you move on to the mortgage-specific content in Modules 2 and 3.