FRE2 Mock Paper 1 — Skills, Principles & Ethical Behaviours
The gentlest FRE2 mock: Consumer Duty, UK GDPR and vulnerable-customer questions dominate, with financial promotions and AML close behind. 40 marks, 60 min.
- Questions
- 40
- Minutes
- 60
- Pass (70%)
- 28/40
Sit it timed
The timer starts when you press the button. You can still finish after it runs out — it is there to mimic exam pressure, not to lock you out.
Free preview: the first 5 of 40 questions, with a timer to match. Unlock the full paper
Answer options are shuffled on every attempt. Your progress is saved as you go, so a refresh won't lose it.
About FRE2 Mock Paper 1
Paper 1 is the gentlest entry to FRE2, but it is also the most framework-heavy paper in the unit: Consumer Duty, SM&CR, conduct rules and fitness & propriety dominate the opening stretch before ethics, promotions, AML and data protection take over. There is almost no arithmetic — this is a recall-and-apply paper — so a weak score here is almost always a muddled framework rather than a calculation miss. The fix is learning the threes and fours cold (three cross-cutting rules, four outcomes, four vulnerability drivers) and then practising scenarios where two answers sound defensible and only one puts the customer first.
It is paper 1 of 5 in the FRE2 ramp, the Skills, Principles & Ethical Behaviours unit, sitting in the easier tier. Every question carries a written explanation.
Format, timing and pass mark
FRE2 Mock Paper 1 follows the live FRE2 format: 25 standalone questions + 3 case studies × 5 linked questions, in 60 minutes — about 90 seconds a question. Pass mark 28/40 (70%), as in the real assessment. There is no negative marking, so answer everything. 3 case studies carry linked questions: read each scenario once, carefully, before answering any part of it.
What this paper tests
The 40 questions in FRE2 Mock Paper 1 break down across 18 topic areas:
- Data protection6 questions
- Vulnerable customers6 questions
- Financial promotions5 questions
- Anti-money laundering3 questions
- Complaints3 questions
- Consumer Duty3 questions
- Conflicts & inducements2 questions
- SM&CR2 questions
- Adviser skills1 question
- Bribery & inducements1 question
- Compensation1 question
- Conduct rules1 question
- Conflicts of interest1 question
- Ethics1 question
…plus 4 further topic areas spread across the case studies.
Where candidates lose marks on FRE2 Mock Paper 1
Three traps this paper sets deliberately. Each one is a question where the wrong answer is the one most candidates would give.
Principle 12 is not a rewrite of Principles 1–11
The Consumer Duty added a twelfth Principle requiring firms to act to deliver good outcomes for retail customers. It sits alongside the existing Principles; it does not replace Treating Customers Fairly or the conduct rules. Options that treat Principle 12 as a wholesale replacement of the older regime are the classic distractors.
Cross-cutting rules are not the same as the four outcomes
The three cross-cutting rules (act in good faith, avoid foreseeable harm, enable customers to pursue their financial objectives) apply across everything a firm does. The four outcomes (products and services, price and value, consumer understanding, consumer support) are the results those rules are meant to produce. Mixing the lists — or inventing a fifth outcome — is a frequent FRE2 trap.
Most advisers are Certification staff, not Senior Managers
Under SM&CR, Senior Management Functions need prior FCA approval. A typical mortgage adviser in an authorised firm falls in the Certification Regime — fit and proper assessment by the firm, not pre-approval by the FCA. Options that put every customer-facing adviser through the Senior Manager gateway overstate the regime.
A higher procuration fee does not make a product more suitable
Where two products are equally suitable, recommending the one that pays more because it pays more is a conflict of interest, not advice. Disclose, manage, and choose on suitability — never on the fee. FRE2 rewards the answer that serves the customer, not the firm.
Deadlines win marks: 8 weeks, 6 months, 72 hours, 1 month
Complaints need a final response within eight weeks; the customer then has six months to go to FOS. A personal data breach likely to risk individuals must reach the ICO within 72 hours; a DSAR is normally answered within one month. Swapping any of those figures is an easy way to drop a mark on an otherwise straightforward question.
A worked example from FRE2 Mock Paper 1
An adviser forms a suspicion of money laundering while taking a mortgage application. What is the correct sequence?
- 1.Do not tip the customer off — tipping off is itself an offence.
- 2.Report the suspicion internally to the Money Laundering Reporting Officer (MLRO).
- 3.The MLRO decides whether to submit a Suspicious Activity Report to the NCA.
- 4.Continue the relationship only as directed — do not unilaterally confront the customer.
Answer: Report to the MLRO without tipping off; the MLRO decides on an SAR
Candidates often want to refuse the business on the spot or tell the customer why. Both tip off. The process answer — escalate to the MLRO and leave the external report to them — is the one FRE2 rewards.
Try two questions from FRE2 Mock Paper 1
These come from the free preview of this paper. Answer them, then reveal the explanation.
Consumer Duty
The Consumer Duty introduced a twelfth Principle for Businesses. It requires firms to:
- AAct to deliver good outcomes for retail customers
- BReport all customer interactions to the FCA
- COffer the cheapest product available in the market
- DGuarantee that no retail customer ever loses money
Reveal the answer
A is correct. Principle 12 is outcomes-focused: firms must act to deliver good outcomes for retail customers. It raises the bar above 'treating customers fairly' but is not a guarantee against loss or a price cap.
Consumer Duty
Which of the following is one of the three cross-cutting rules under the Consumer Duty?
- AAchieve a minimum customer satisfaction score
- BUndercut competitors' pricing wherever possible, as the Duty is chiefly a price-competition measure
- CRefer all complex cases to the FCA
- DAvoid causing foreseeable harm to retail customers
Reveal the answer
D is correct. The three cross-cutting rules are: act in good faith; avoid causing foreseeable harm; and enable and support retail customers to pursue their financial objectives. The other options are inventions.
Scored under 70%? Revise these next
A near miss is almost always a calculation you cannot do under time pressure, a definition you half-know, or a rule you have never read in the examiner's words. Start with the topic areas above where you dropped marks, then:
- →Drill the calculations on the CeMAP formula sheet — LTV, income multiples, SDLT, APRC, ERCs and rental cover, each worked through.
- →Nail the terminology in the CeMAP glossary — a surprising share of wrong answers are a term you nearly knew.
- →Re-read the syllabus coverage on the FRE2 exam guide, then sit the next paper in the ramp.
The other FRE2 mock papers
5 timed mocks for this unit, running easier → harder. Sitting the whole ramp is what moves a borderline score to a comfortable pass.