How to pass FRE2: Consumer Duty, conduct and ethics technique

FRE2 — Skills, Principles & Ethical Behaviours — is the conduct unit. It uses the same format as FRE1 (25 standalone questions plus three case studies of five linked questions, 40 marks, 60 minutes, 70% to pass), but the questions feel different. FRE1 asks who regulates what. FRE2 asks what you should do when two answers both sound reasonable.

Memorise the frameworks before you practise scenarios

• Consumer Duty: Principle 12, three cross-cutting rules, four outcomes.
• SM&CR: Senior Managers (pre-approved), Certification staff (firm-assessed), conduct rules for almost everyone.
• Fit and proper: honesty/integrity/reputation, competence/capability, financial soundness.
• Vulnerability: the FCA's four drivers — health, life events, resilience, capability.
• Deadlines: 8 weeks (final complaint response), 6 months (FOS), 72 hours (ICO breach), 1 month (DSAR).

If those lists are shaky, scenario practice just trains you to guess confidently. Learn the lists cold, then sit timed papers.

The single biggest FRE2 mistake

Picking the answer that protects the firm instead of the customer. In Consumer Duty and ethics questions, several options are often technically lawful; the correct one is the one that acts in good faith, avoids foreseeable harm, or enables the customer to pursue their objectives. When a higher procuration fee collides with an equally suitable cheaper product, suitability wins — every time.

Case-study timing

• Budget roughly 90 seconds per standalone question, leaving about half the paper for the three case studies.
• Read each scenario once properly before the linked questions — the trap is usually a single detail (age, vulnerability driver, who holds the data).
• Answer on first pass; flag doubts and return. Blank answers are free marks gifted to the examiner.

Traps the examiners love

• Mixing cross-cutting rules with the four outcomes.
• Putting ordinary advisers through Senior Manager approval.
• Tipping off a customer you suspect of money laundering instead of reporting to the MLRO.
• Treating a financial promotion on a personal social account as outside s21 FSMA.
• Confusing ethics (doing the right thing) with regulation (the minimum legal standard) — both matter, and they are not identical.

The reliable preparation is full timed FRE2 mocks with explanations. We have five FRE2 papers in the real format, ranked easier to harder — start with FRE2 Paper 1 (free five-question preview) and unlock the rest when you're ready. Lifetime access to every unit is £29.99 once, or £9.99 for FRE2 alone.

Read next: if you're still mapping old module names to the new units, see CeMAP 1 vs 2 vs 3: what the modules mean after the 2025 changes.