DipFA · 5 timed mocks
FRE2 — Skills, Principles & Ethical Behaviours
The conduct unit: how advisers must behave rather than what products do. Consumer Duty, the conduct rules, ethics, financial promotions, vulnerable customers, complaints and data protection — tested heavily through scenarios where several answers sound reasonable and only one puts the customer's interests first.
- Questions
- 40
- Minutes
- 60
- Pass (70%)
- 28/40
What FRE2 covers
- •The Consumer Duty: Principle 12, three cross-cutting rules, four outcomes
- •SM&CR: senior managers, certification staff and the conduct rules
- •Ethics, conflicts of interest and inducements
- •Financial promotions: s21 FSMA and fair, clear, not misleading
- •The FCA's four drivers of vulnerability and fair treatment
- •Complaints handling under DISP — deadlines and FOS rights
- •UK GDPR: DSARs, breach reporting, special category data
- •Fact-finding skills: open questions, soft facts, suitability
3 free FRE2 practice questions
Straight from Mock Paper 1, in the real exam style — no sign-up, no paywall.
Q1.The Consumer Duty introduced a twelfth Principle for Businesses. It requires firms to:
- AAct to deliver good outcomes for retail customers
- BGuarantee that no retail customer ever loses money
- COffer the cheapest product available in the market
- DReport all customer interactions to the FCA
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.
Q2.Which of the following is one of the three cross-cutting rules under the Consumer Duty?
- AAvoid causing foreseeable harm to retail customers
- BAchieve a minimum customer satisfaction score
- CRefer all complex cases to the FCA
- DUndercut competitors' pricing wherever possible, as the Duty is chiefly a price-competition measure
Reveal the answer
A 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.
Q3.Which of these is NOT one of the four Consumer Duty outcomes?
- AShareholder returns
- BProducts and services
- CPrice and value
- DConsumer understanding
Reveal the answer
A is correct. The four outcomes are products and services, price and value, consumer understanding, and consumer support. Shareholder returns have nothing to do with the Duty — a classic 'odd one out' exam construction.
How to pass FRE2
- ✓Memorise the threes and fours: 3 cross-cutting rules, 4 outcomes, 4 vulnerability drivers.
- ✓Deadlines win marks: 8 weeks (final response), 6 months (FOS), 72 hours (ICO), 1 month (DSAR).
- ✓In scenario questions, the right answer is the one serving the customer's interests — not the firm's.
FRE2 exam — common questions
What does the FRE2 exam cover?
FRE2 covers the consumer duty, sm&cr, ethics, conflicts of interest and inducements, financial promotions and more. In full: The Consumer Duty: Principle 12, three cross-cutting rules, four outcomes; SM&CR: senior managers, certification staff and the conduct rules; Ethics, conflicts of interest and inducements; Financial promotions: s21 FSMA and fair, clear, not misleading; The FCA's four drivers of vulnerability and fair treatment; Complaints handling under DISP — deadlines and FOS rights; UK GDPR: DSARs, breach reporting, special category data; Fact-finding skills: open questions, soft facts, suitability.
How long is the FRE2 exam?
60 minutes. Our FRE2 mock papers run to the same clock, so you practise at exam pace rather than at your own.
What is the pass mark for FRE2?
70% — 28 out of 40 marks. You have to clear 70% in each unit independently; there is no compensation between units.
How many questions are in the FRE2 exam?
40 questions — 25 standalone questions + 3 case studies × 5 linked questions, worth 40 marks in total.
Is FRE2 part of DipFA or CeMAP?
FRE2 is part of FSRE, which DipFA and CeMAP candidates both sit. On this site it is sold as the DipFA FSRE module.