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CeMAP·FSRE · Module 1: Financial Services, Regulation and Ethics·UnitFSRE · Unit 02Access: Premium

FRE2: Skills, Principles and Ethical Behaviours

FRE2 is the second unit of CeMAP Module 1, focusing on the practical skills and ethical framework required for financial advice. Topics include the advice process, building trust with clients, consumer rights and protection, ethical principles, and the FCA Consumer Duty framework. The exam consists of 30 multiple-choice questions.

Questions
333
Topics
5
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What’s in it.

5 topics
  • Topic 01

    The Advice Process

    57 questions
  • Topic 02

    Building Trust with Clients

    54 questions
  • Topic 03

    Consumer Rights and Protection

    105 questions
  • Topic 04

    Ethical Principles and Professional Behaviour

    63 questions
  • Topic 05

    FCA Consumer Duty Framework

    54 questions

Sample questions

3 of many

A few questions from this unit, with the answer and a full explanation. The complete bank is available when you start practising.

  1. Under the Equality Act 2010, what does the duty to make 'reasonable adjustments' require of a mortgage advice firm?

    • To provide free mortgage advice to disabled clients
    • To decline to advise clients whose disability may affect their understanding
    • To offer all clients the same service regardless of disability
    • To take reasonable steps to avoid disadvantaging disabled clients when accessing their services
      Correct answer
    Explanation

    The Equality Act 2010 (sections 20–22) imposes a duty on service providers, including mortgage firms, to make reasonable adjustments where a provision, criterion or practice puts a disabled person at a substantial disadvantage. This could include providing information in accessible formats, allowing extra time for appointments, or adjusting communication methods to suit the client's needs.

  2. Which FCA sourcebook sets the overarching requirement for advisers to act honestly, fairly and professionally in all regulated conduct of business?

    • MCOB 4
    • DISP 1
    • PRIN 1
    • COBS 2
      Correct answer
    Explanation

    COBS 2 (General Matters) applies to all regulated conduct of business and requires firms and advisers to act honestly, fairly and professionally in their clients' best interests. While PRIN 6 states the same principle at a high level, COBS 2 is the specific sourcebook chapter that operationalises it. MCOB contains mortgage-specific rules, SYSC covers systems and controls, and DISP governs complaints handling.

  3. What is the Consumer Understanding outcome under Consumer Duty?

    • Ensuring products are manufactured in the UK
    • Ensuring consumers understand the products and services relevant to them
      Correct answer
    • Guaranteeing that no customer ever makes a financial loss
    • Setting the lowest possible prices for all products
    Explanation

    The Consumer Understanding outcome requires firms to ensure consumers understand products and services relevant to them. This includes explaining features in plain language, checking understanding before commitment, and providing written summaries for reference.

Frequently asked questions

2 questions
How many questions are in the FRE2 exam?

The FRE2 exam consists of 30 multiple-choice questions. You need to score 70% (21 out of 30) to pass.

What is the FCA Consumer Duty?

The Consumer Duty is an FCA regulation requiring firms to deliver good outcomes for retail customers. It is a key topic in FRE2 and covers the four outcomes: products and services, price and value, consumer understanding, and consumer support.