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CeMAP Module 1 Financial Services, Regulation and Ethics

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1 Introduction

1.1 About the CeMAP Module 1 (FSRE) Exam 1.2 How to Use This Study Guide

2 UK Financial Services Industry and the Wider Economy

2.1 Purpose and Role of Money and Financial Markets 2.2 Structure of UK and International Financial Markets 2.3 Types of Main Markets and Market Participants 2.4 Asset Classes and Their Characteristics 2.5 The UK Government, EU Influence and International Standards 2.6 Bank of England, Financial Institutions and Financial Crime

3 Serving the Retail Consumer

3.1 Consumer Perceptions and Firm Obligations 3.2 Consumer Financial Needs and How They Are Met 3.3 Product Types and Their Functions

4 Legal Concepts for Financial Advice

4.1 Legal Entities and Powers of Attorney 4.2 Law of Contract and Agency 4.3 Property Ownership, Insolvency and Bankruptcy 4.4 Wills and Intestacy 4.5 Trusts: Structure, Purpose and Types

5 Development of UK Financial Services Regulation

5.1 History of UK Regulation 1986–2021 5.2 The UK Regulatory Framework and Other Regulators 5.3 Additional Oversight: Senior Management, Auditors, Trustees and External Compliance

6 The FCA and PRA and Their Handbook

6.1 FCA and PRA: Statutory and Operational Objectives 6.2 Principles-Based Regulation, Duties and Enforcement Powers 6.3 Purpose and Structure of the FCA Handbook 6.4 High-Level Standards and the Training and Competence (T&C) Regime 6.5 Prudential Standards, CASS and the SMCR 6.6 Conduct of Business (COBS) Rules 6.7 Regulatory Processes, Regulated Activities and Authorisation

7 Advising Clients: Skills and Process

7.1 Communication Skills for Advisers 7.2 Gathering Information and the Fact-Find 7.3 Assessment, Analysis and Identifying Appropriate Solutions 7.4 Recommendations, Conclusions and Insistent Clients

8 Principles for Businesses and Conduct Rules

8.1 Principles for Businesses and Conduct of Business Rules 8.2 Preventing Harm, the Market Conduct Code (MAR) and Conduct Risk 8.3 Corporate Culture, Leadership and Senior Management Responsibilities 8.4 Consumer Rights and Unfair Contract Terms

9 Regulatory Framework Rules and Consumer Protection

9.1 Record Keeping, Reporting and Notification Requirements 9.2 Anti-Money Laundering and Proceeds of Crime 9.3 Data Protection and Data Security 9.4 Complaint Handling and the Financial Ombudsman Service 9.5 FSCS, Treating Customers Fairly and Conduct Risk

10 The Regulatory Advice Framework

10.1 Client Relationships, Adviser Responsibilities and Types of Clients 10.2 Fiduciary Relationships and Types of Service Provision 10.3 Disclosure Requirements and Adviser Charging 10.4 Limitations to Authority, Cancellation Rights and Vulnerable Clients 10.5 Regulated Advice Standards and Due Diligence on Products 10.6 Monitoring and Reviewing Client Circumstances

11 Ethics and Professional Behaviour

11.1 Core Ethical Theories, Principles and Values 11.2 Impact of Ethical Principles and Professional Codes of Conduct 11.3 The Code of Ethics and Resolving Ethical Dilemmas 11.4 Business Ethics, Whistleblowing and Ethical Culture 11.5 Professionalism, CPD and Ethical vs Compliance-Driven Behaviour

1.2 How to Use This Study Guide

Key Takeaways Explain This Topic AI

This guide is organised around the official FSRE learning outcomes. Its 26 FRE1 and 24 FRE2 sections are our editorial organisation, including introductory material; each exam unit contains 40 questions.

Plan around 100 hours of Total Qualification Time spread over roughly 6 to 8 weeks of part-time study, splitting time evenly between FRE1 and FRE2.

Use the in-section quizzes to confirm understanding as you go, then move to the full practice bank at /practice/cemap-module1 for timed, exam-style drills.

Memorise the current UK figures that appear in the exam: £20,000 ISA allowance, £12,570 personal allowance, £3,000 CGT exemption, £120,000 FSCS deposit limit from 1 December 2025, and £455,000 FOS compulsory money-award limit for referrals from 1 April 2026 to 31 March 2027 about acts from 1 April 2019 (excluding separately awarded interest and costs).

Use the current CeMAP and FSRE specifications. Retired UKFR content is historical; the labels Unit 1 and Unit 2 remain valid for current FRE1 and FRE2.

Last updated: September 2026

How to Use This Study Guide

Quick Answer: This free ExamFinch guide is organised around the official FSRE learning outcomes. Its chapter and section divisions are editorial; FRE1 and FRE2 each contain 40 exam questions and must be passed separately. Plan around 100 hours of Total Qualification Time over 6 to 8 weeks of part-time study, split evenly between the two units. Use the in-section quizzes to confirm understanding as you go, then move to the full practice bank at /practice/cemap-module1 for timed, exam-style drills. Use the figures below with their dates and scope, alongside the current CeMAP and July 2026 FSRE specifications. Check official assessment materials for the examinable version of time-sensitive rules.

Mapping This Guide to the FSRE Syllabus

The guide is organised into 11 chapters totalling 50 sections . The sections teach the official learning outcomes and include editorial orientation and revision guidance. They are not a one-to-one list of official syllabus subtopics; compare your progress with the learning outcomes and assessment criteria in the specification.

FRE1 (26 sections, ~50% weight) covers Chapters 1 to 6: the UK financial services industry, retail consumers, legal concepts for advice, the development of UK regulation, and the FCA, PRA and their Handbook.

FRE2 (24 sections, ~50% weight) covers Chapters 7 to 11: adviser skills and process, Principles for Businesses and Conduct Rules, the regulatory advice framework, consumer protection (AML, data protection, complaints, FSCS), and ethics and professional behaviour.

Because both units carry equal weight, the guide splits study time evenly between them. Do not over-invest in FRE1 at the expense of FRE2 — many candidates underestimate the applied ethics and advice-process content in FRE2.

Recommended Study Order: FRE1 Then FRE2

Although you can sit FRE1 and FRE2 in either order, we recommend studying FRE1 first . FRE1 establishes the regulatory landscape — the FCA, PRA, Bank of England, FOS, FSCS, the legal concepts and the structure of UK financial services — that FRE2 then builds on when discussing the Principles for Businesses, conduct rules, the advice process and ethics.

A practical sequence is:

Read Chapter 1 (this chapter) end to end.

Work through Chapters 2 to 6 (FRE1) in order, taking the section quizzes.

Sit a timed FRE1 mock from the practice bank at /practice/cemap-module1.

Move to Chapters 7 to 11 (FRE2) in order, taking the section quizzes.

Sit timed FRE2 mocks until you score consistently above 70%.

Sit FRE1, then FRE2, within the registration window for your chosen route.

A 100-Hour, 6 to 8 Week Part-Time Plan

Walbrook specifies 100 hours of Total Qualification Time for FSRE. Spread across 6 to 8 weeks of part-time study (about 12 to 16 hours per week), a workable allocation is:

  • Week Focus Hours
  • 1 Chapter 1 (this chapter) + Chapter 2 (industry and markets) 12
  • 2 Chapter 3 (retail consumer) + Chapter 4 (legal concepts) 14
  • 3 Chapter 5 (regulation history) + Chapter 6 (FCA/PRA Handbook) 14
  • 4 FRE1 revision + timed FRE1 mocks 10
  • 5 Chapter 7 (advice skills) + Chapter 8 (Principles & Conduct Rules) 14
  • 6 Chapter 9 (regulatory framework & consumer protection) + Chapter 10 (advice framework) 14
  • 7 Chapter 11 (ethics) + FRE2 revision 12
  • 8 Timed FRE2 mocks + targeted weak-area review 10

Adjust the plan to your prior experience — if you already work in a mortgage or financial services firm, you may compress FRE1; if you have not studied ethics before, allow extra time for Chapter 11.

Using the In-Section Quizzes

Every section in this guide contains short multiple-choice quizzes. They are designed to:

Confirm understanding immediately after you read a section.

Highlight the style of FSRE questions — standalone MCQs plus linked case-study style MCQs.

Expose common traps — for example, confusing the FCA's conduct role with the PRA's prudential role, or mixing up the FSCS deposit limit with the FOS award limit.

Treat each quiz as a learning tool, not just a test: read the explanation even when you get the question right, because the explanation reinforces the exact wording the exam expects.

Using the Practice Question Bank

Once you have worked through the section quizzes, use the bank at /practice/cemap-module1 for standalone questions and self-contained applied scenarios across FRE1 and FRE2. These drills do not reproduce the real exam’s three shared case studies with five questions each. Use official materials to practise that linked-case format as well.

Recommended approach:

After finishing Chapter 6, sit a timed FRE1 mock (40 questions in 60 minutes). Aim for 70%+ before sitting the real FRE1.

After finishing Chapter 11, sit a timed FRE2 mock in the same format.

In the final week before each unit, run two or three timed mocks back to back and review every question you got wrong or guessed.

As a suggested readiness check, start the real unit once you score consistently above 70% in mocks across two or three consecutive sittings. Current on-demand remote assessment does not require advance booking.

Key Current UK Figures to Memorise

Financial rules and limits depend on dates, jurisdiction and product type. The following figures support revision; use the applicable official assessment materials to establish which version is examinable:

  • Figure Value Source
  • ISA allowance (2026/27) £20,000 (frozen until April 2031) HMRC
  • Income tax personal allowance £12,570 HMRC
  • CGT annual exemption £3,000 HMRC
  • CGT rates (non-residential) 18% basic / 24% higher HMRC

FSCS deposit protection limit £120,000 per eligible depositor per authorised firm, from 1 December 2025 PRA PS24/25

FOS maximum award £455,000 compulsory money award , excluding separately awarded interest and costs, for referrals from 1 April 2026 to 31 March 2027 about acts/omissions on/after 1 April 2019 Financial Ombudsman Service

  • FSRE pass mark 70% per unit (merit 80%, distinction 90%) Walbrook
  • FSRE registration / resit £330 / £120 per unit Walbrook

Apply each limit to the right protection category and date. The standard FSCS deposit limit rose to £120,000 from 1 December 2025; that does not make £85,000 wrong for every other FSCS category. FOS limits depend on both the referral date and the date of the act or omission, so an older limit may still be correct for a historical scenario.

Use September 2025 or Later Materials Only

FSRE is a recent rebuild. Materials written for the old UKFR (Level 3) unit — including many popular revision notes, YouTube summaries and third-party flashcards — do not reflect the current Level 4 content, the FRE1/FRE2 split, or the updated conduct and ethics syllabus. Before you buy or borrow any study resource, check that it is aligned to the April 2026 CeMAP specification and July 2026 FSRE specification . Materials describing the retired UKFR syllabus or two 50-question Module 1 papers are historical. The current FSRE specification still uses Unit 1 and Unit 2 for FRE1 and FRE2, so those labels alone do not indicate obsolete content.

This guide is maintained against the current specification and is reviewed when Walbrook issues updates. Use it alongside the official Walbrook study materials and the current FCA Handbook for the most reliable preparation.