FRE1 is the first unit of CeMAP® 1, the Financial Services, Regulation and Ethics (FSRE) module, set by Walbrook (LIBF). It tests the UK financial services industry, the legal concepts behind advice, and how the FCA and PRA regulate firms. This guide walks through all five FRE1 learning outcomes in official order and shows how a CeMAP FRE1 mock exam tests each one. The facts are UK-wide unless we say otherwise; where Scottish law differs, we flag it. For the module as a whole, see the CeMAP 1 (FSRE) hub.
| FRE1 at a glance | Detail |
|---|---|
| Questions | 40: 25 standalone, then 3 case studies × 5 linked questions |
| Answer format | Single best answer, 1 from 4 options, 1 mark each |
| Time | 1 hour |
| Pass / merit / distinction | 28/40 (70%) / 32/40 (80%) / 36/40 (90%) |
| Delivery | On demand on Brightspace, remote invigilation, no booking |
| Study time | 50 hours Unit Study Time, 5 credits |
Source: the FSRE qualification specification, Appendix 1.
What is the CeMAP FRE1 exam?
The CeMAP FRE1 exam is the 40-question, one-hour test for FSRE: Industry, Regulation and Key Parties, the first of five mandatory CeMAP units. It covers learning outcomes LO1 to LO5: markets, consumers, legal concepts, regulatory history and the FCA and PRA.
FRE1 and its partner unit, FRE2, make up CeMAP 1. Taken on its own, FSRE is a Level 4 qualification, so FRE1 is best described as a Level 4 FSRE unit counted within the Level 3 CeMAP. The same FSRE pass also counts towards the DipFA. The Ofqual unit reference shown on the FSRE course page is Y/650/8972.
Walbrook's suggested learning path puts FRE1 first, then MRT1, FRE2, MRT2 and ASEW/ASSC, but any order is allowed. If you studied under the old structure, Walbrook maps the two old CeMAP 1 (UKFR) units, ITFS and UKFS, together to FRE1 and FRE2; our page on what changed in the new CeMAP has the full mapping.
As of October 2026, CeMAP 1 (FSRE) costs £330 on its own and the full CeMAP costs £735, according to the Walbrook CeMAP page. The first sitting of each unit is included, and each resit costs £120.
Key fact: FRE1 has 40 questions, not 50. Fifty-question figures come from the old UKFR exam, which was withdrawn on 16 July 2026.
How is the FRE1 exam structured?
The FRE1 exam is structured in two parts within one hour: Part 1 has 25 standalone multiple-choice questions, and Part 2 has 3 case studies with 5 linked questions each. Every question has 4 options, carries 1 mark, and 28 marks pass.
That averages 90 seconds a question, but the case studies take longer because you read a scenario first. Aim for about 30 minutes on each part.
The FSRE grade bands are pass 70–79%, merit 80–89% and distinction 90–100%. Grades are awarded per unit; CeMAP as a whole is pass or fail. Walbrook states same-day results for FSRE exams, and feedback comes as an analysis sheet on MyLIBF.
On the day you sit at a PC or laptop with a webcam, scan the room 360 degrees, and work without a toilet break. If you use a work laptop or VPN, your IT team may need to allow *.learnosity.com and *.atomicjoltappsie.com. Walbrook's exam and assessment information has the full rules. If you fail, you may sit up to three attempts a week and ten in any 12 months, at £120 each.
Exam tip: Our FRE1 mocks keep the real order: 25 standalone questions first, then the three case studies. Practise reaching question 26 with at least 28 minutes left.
What does FRE1 LO1 cover: the financial services industry?
FRE1 LO1 covers the UK financial services industry in its European and international context, across four assessment criteria: the purpose of money and markets, the main asset classes, the roles of government and the EU, the Bank of England, and financial crime.
The official wording is "Understand the UK financial services industry in its European and international context."
What the four criteria include
- AC1.1 Markets. Money as a medium of exchange, store of value and unit of account. How financial intermediaries pool deposits and lend them on, transforming short-term savings into long-term loans. Money markets (short-term lending) versus capital markets (shares and bonds), primary versus secondary markets, plus foreign exchange, insurance and derivatives markets.
- AC1.2 Asset classes. Cash, fixed interest (gilts and corporate bonds), equities and property, and how risk, return and liquidity differ between them.
- AC1.3 Government and the EU. Economic and industrial policy, regulation, taxation and social welfare. Much of today's UK conduct regulation began as EU law, such as the Mortgage Credit Directive, implemented on 21 March 2016.
- AC1.4 The Bank of England and financial crime. The Bank's Monetary Policy Committee sets Bank Rate, which stands at 3.75% after the cut of 18 December 2025. The Financial Policy Committee watches financial stability, and the PRA, part of the Bank, supervises banks and insurers. Financial crime covers money laundering, terrorist financing, fraud and market abuse; our anti-money laundering guide covers the offences in depth.
What LO1 questions tend to test (our reading)
Most LO1 questions are definitions in disguise: which market trades a three-month instrument, or which committee sets interest rates. The usual trap is mixing up bodies: the MPC sets Bank Rate, the FPC deals with system-wide risk, and the PRA supervises individual firms. The FCA is not part of the Bank of England. Drill this outcome with the LO1 topic practice.
Exam tip: When two options both sound right, ask which body has the legal power named in the question. Monetary policy, financial stability and prudential supervision each sit with a different committee or authority.
What does FRE1 LO2 cover: serving the retail consumer?
FRE1 LO2 covers how the industry serves retail consumers, through AC2.1 and AC2.2: a firm's obligations to consumers, how consumers perceive financial services, how their financial needs are identified and prioritised, and which product types meet those needs.
The official wording is "Identify how the retail consumer is served by the financial services industry."
Obligations and perceptions (AC2.1)
Consumers often find financial products complex and put off decisions. Firms answer for that through communications that are clear, fair and not misleading, fair treatment, and, since 31 July 2023, the FCA's Consumer Duty. The Duty is taught in more depth in FRE2; in FRE1 you need to know that obligations exist and why.
Needs, priorities and products (AC2.2)
Questions here give you a customer and ask what comes first. Usually that is protecting income and dependants, then emergency savings and clearing expensive debt, and only then longer-term saving, investing and retirement.
| Need | Product types | 2026/27 figure worth knowing |
|---|---|---|
| Protect family and income | Life cover, critical illness cover, income protection | — |
| Short-term savings | Deposit accounts, cash ISAs | ISA allowance £20,000 a year |
| First home | Lifetime ISA (age 18–39 to open) | £4,000 a year, 25% bonus, homes up to £450,000 |
| Long-term growth | Stocks and shares ISAs, collective investments | Within the same £20,000 |
| Retirement | Personal and workplace pensions | Annual allowance £60,000 |
| Borrowing | Mortgages, loans, credit cards | — |
Figures are for 2026/27. Walbrook does not say which tax year each exam window uses, so rely on the tax table in its study materials.
What LO2 questions tend to test (our reading)
Expect short scenarios, such as a young couple with a baby and no life cover. The right answer usually meets the most urgent need, not the most profitable one. Practise with the LO2 topic drill.
Exam tip: If a client has dependants and no protection, protection almost always comes before investment in the answer.
What does FRE1 LO3 cover: legal concepts?
FRE1 LO3 covers the legal concepts behind financial advice in two criteria: AC3.1 (legal entities, powers of attorney, contract and agency, property ownership, insolvency and bankruptcy) and AC3.2 (wills, intestacy and trusts), taught mainly under the law of England and Wales.
The official wording is "Apply the legal concepts and considerations relevant to financial advice."
AC3.1 Entities, attorneys, contracts, property and insolvency
- Legal entities. Individuals, sole traders, partnerships (partners share unlimited liability, unlike members of an LLP) and limited companies, which are separate legal persons from their shareholders. Capacity matters: a minor (under 18) cannot hold a legal estate in land in England and Wales.
- Powers of attorney. An ordinary power of attorney ends if the donor loses mental capacity. A lasting power of attorney under the Mental Capacity Act 2005 survives it. There are two types, property and financial affairs, and health and welfare, and an LPA must be registered with the Office of the Public Guardian before it can be used. Scotland uses continuing and welfare powers of attorney instead.
- Contract and agency. A valid contract needs offer, acceptance, consideration, an intention to create legal relations and capacity. An agent binds the principal when acting within their authority.
- Property ownership. Freehold, leasehold and commonhold. Joint tenants own the whole together, and the survivor takes it automatically; tenants in common own shares that pass under each owner's will or intestacy.
- Insolvency and bankruptcy. Bankruptcy for individuals, individual voluntary arrangements, and administration or liquidation for companies. In Scotland, bankruptcy is called sequestration.
AC3.2 Wills, intestacy and trusts
A valid will in England and Wales must be in writing and signed by a testator aged 18 or over in front of two witnesses, under section 9 of the Wills Act 1837. Without a will, the intestacy rules apply: a surviving spouse or civil partner takes the personal chattels, the first £322,000 and half of the rest, and an unmarried partner takes nothing.
A trust separates legal ownership (the trustees) from the benefit (the beneficiaries), as set up by the settlor. You need the main types: bare (absolute), interest in possession and discretionary. A life policy written in trust pays the trustees directly, outside the estate. Our wills and trusts guide has worked intestacy examples.
What LO3 questions tend to test (our reading)
LO3 rewards precise rules. Common traps: thinking an ordinary power of attorney still works after loss of capacity; giving an unmarried partner a share on intestacy; treating a joint tenant's share as passing under their will. Our mocks give LO3 the second-largest share of FRE1 standalone questions. Practise with the LO3 topic drill.
Key fact: Joint tenancy means survivorship. A will cannot pass a joint tenant's share unless the joint tenancy was severed first.
What does FRE1 LO4 cover: how regulation developed?
FRE1 LO4 covers how UK financial services regulation developed from 1986 to 2021, through one criterion, AC4.1: the history since the Financial Services Act 1986, today's regulatory framework, the other regulators, and oversight by senior managers, auditors, trustees and compliance support.
The official wording is "Understand the development of financial services regulation."
| Date | Event |
|---|---|
| 1986 | Financial Services Act 1986: self-regulation under statute (now repealed) |
| 1 Dec 2001 | FSMA 2000 fully in force; the FSA becomes the single regulator |
| 31 Oct 2004 | Regulation of mortgage advice and lending begins (MCOB) |
| 31 Dec 2012 | Retail Distribution Review: adviser charging for investment advice |
| 1 Apr 2013 | Financial Services Act 2012 replaces the FSA with the FCA and the PRA |
| 26 Apr 2014 | Mortgage Market Review rules on affordability and advice |
| 21 Mar 2016 | Mortgage Credit Directive: the ESIS replaces the KFI; second charge mortgages move into MCOB |
| 9 Dec 2019 | SM&CR extends to solo-regulated firms |
The Consumer Duty (31 July 2023) falls after the syllabus's 2021 end point, but it now shapes every FRE2 topic. Other regulators include the Payment Systems Regulator, the Information Commissioner's Office and The Pensions Regulator. Oversight inside firms comes from senior management, internal and external auditors, trustees (for example of pension schemes) and external compliance consultants.
What LO4 questions tend to test (our reading)
Dates and sequence: which body replaced the FSA, and when mortgage advice became regulated. A frequent trap is confusing Royal Assent with commencement: FSMA was passed in 2000 but came fully into force on 1 December 2001. Practise with the LO4 topic drill, and read our FCA and PRA guide for the background.
Exam tip: Learn the timeline as a story: self-regulation (1986), one regulator (2001), mortgages added (2004), twin peaks (2013), tougher mortgage rules (2014 and 2016).
What does FRE1 LO5 cover: the FCA, the PRA and the Handbook?
FRE1 LO5 covers the FCA's and PRA's responsibilities and approach, in two criteria: AC5.1 (statutory objectives, principles-based regulation, enforcement) and AC5.2 (the FCA Handbook, including T&C, COBS, CASS, SM&CR and authorisation). LO5 has the most sub-bullets in FRE1.
The official wording is "Evaluate the FCA's and PRA's responsibilities and approach to regulation."
AC5.1 Objectives and powers
The FCA's strategic objective is to make sure the relevant markets function well. Its three operational objectives are consumer protection, market integrity and effective competition. The PRA's general objective is the safety and soundness of the firms it regulates, with an extra objective of protecting policyholders for insurers. Principles-based regulation means firms must meet high-level outcomes, not just follow detailed rules. Enforcement tools include fines, public censure, prohibition orders, varying or cancelling permissions, restitution and, for some offences, criminal prosecution.
AC5.2 The Handbook
| Handbook block | Examples you need |
|---|---|
| High Level Standards | PRIN (Principles for Businesses), SYSC, COCON, FIT |
| Prudential Standards | Capital and liquidity rules for firms |
| Business Standards | COBS, MCOB, ICOBS, CASS |
| Regulatory Processes | SUP (supervision), DEPP (enforcement decisions) |
| Redress | DISP (complaints), COMP (compensation) |
Each provision carries a letter: R for a rule, E for an evidential provision and G for guidance. Beyond the blocks, know the purpose of the Training and Competence sourcebook (appropriate qualifications, competence and supervision), CASS (keeping client money separate from the firm's own) and SM&CR (Senior Managers, the Certification Regime and the Conduct Rules). The authorisation topic rests on the general prohibition: carrying on a regulated activity without permission or exemption is a criminal offence.
What LO5 questions tend to test (our reading)
Matching: objective to regulator, rule to sourcebook, power to purpose. Traps include giving the PRA a competition objective in place of the FCA, or calling guidance (G) binding. Our mocks give LO5 the largest share of FRE1 standalone questions. Practise with the LO5 topic drill.
Key fact: Passing CeMAP meets the FCA's education standard, but it does not on its own let you advise unsupervised. Your firm must assess you as competent under TC.
How do the three FRE1 case studies work?
The three FRE1 case studies form Part 2 of the paper: each gives a short client or firm scenario followed by 5 linked questions, so 15 of the 40 marks depend on reading a case carefully and applying LO1 to LO5 to it.
A typical case might describe a widowed client, her son who wants to help with her finances and a jointly owned house, with questions on powers of attorney, joint ownership, intestacy and vulnerability.
A method that works:
- Read the questions before the scenario, so you know which facts to look for.
- Underline names, ages, relationships, ownership and dates as you read.
- Answer each question from the scenario's facts, not from what usually happens.
- Watch for facts that change the rule, such as a client who has lost capacity or a couple who are not married.
- Move on after 90 seconds on any one question and come back if time allows.
Our case study guide works through a full scenario step by step. The FRE1 mocks put whole case studies in Part 2, in the format the unit specification sets.
Exam tip: In a case study, the deciding fact is often one word in the scenario: "partner" rather than "wife", or "ordinary" rather than "lasting" power of attorney.
Your four-week FRE1 study plan
Your four-week FRE1 study plan spreads the 50 hours of Unit Study Time over 28 days: one diagnostic, two weeks on the five learning outcomes, then a week of timed mocks, finishing when you pass 3 mocks in a row at 85%.
| Week | Focus | Practice |
|---|---|---|
| 1 | Take the free diagnostic, then study LO1 and LO2 | Topic drills for LO1 and LO2; one free quick practice |
| 2 | LO3 legal concepts, the largest technical outcome | LO3 drill daily; write out the intestacy and attorney rules from memory |
| 3 | LO4 timeline and LO5 FCA, PRA and Handbook | LO4 and LO5 drills; first full mock under time |
| 4 | Mocks and weak spots | Two or three full mocks; re-drill any topic under 80% |
Start with the free FRE1 diagnostic: 20 questions in 30 minutes, spread across the outcomes, so you know where to begin. Use the free 20-question quick practice for short sessions, and take the free FRE1 mock 1 in week 3 under real timing. A printable FRE1 worksheet with an answer key works well for revision away from a screen. For the plan day by day, with what to memorise and how to pace the paper, read how to pass CeMAP FRE1.
Our mocks allocate FRE1's standalone questions by our own weighting, since Walbrook publishes none: the FCA and PRA (LO5) 130, legal concepts (LO3) 100, markets (LO1) 70, retail consumers (LO2) 50 and regulatory history (LO4) 50, out of 400. Mocks 2 to 10 and the topic drills are part of Pro, which covers all five units for £6.99 a week, £11.99 a month or £22.99 for three months. Our readiness rule matches the app: three mocks in a row at 85% or more, with every topic at 80% or more. That is a guide to readiness; there is no pass guarantee.
When FRE1 is done, carry on with FRE2, which builds on LO5. If you came looking for past papers, our past papers page explains what exists.
20 free FRE1 practice questions with answers
Try each one, then open the answer. For a timed experience use the free mock exam.
1. Funds already in the banking system are moved quickly through a chain of overseas accounts and shell companies to hide where they came from. Which stage of money laundering is this?
- A. Layering
- B. Placement
- C. Integration
- D. Structuring
Show answer
A. Layering
Layering is the second stage, in which a series of complex transactions separates criminal proceeds from their source and makes the audit trail hard to follow. Shell companies and transfers across borders are common techniques. Placement has already happened because the funds are in the system.
2. Under an interest in possession trust, what is the income beneficiary entitled to?
- A. To take the trust capital whenever she chooses
- B. To whatever income the trustees decide to pay
- C. To nothing until the trust ends
- D. To all trust income as it arises, less expenses
Show answer
D. To all trust income as it arises, less expenses
The trustee must pass all trust income to the interest in possession beneficiary as it arises, less expenses. That beneficiary has no right to the capital itself.
3. Which section of FSMA gives the FCA its general power to make the rules found in its Handbook?
- A. Section 19
- B. Section 137A
- C. Section 166
- D. Section 56
Show answer
B. Section 137A
FSMA s137A gives the FCA power to make general rules that apply to authorised persons, where necessary or expedient to advance its operational objectives. Other sections give specific rule-making powers.
4. Why does a 90-day notice savings account usually pay a higher rate than an instant-access account from the same provider?
- A. It is covered by a higher FSCS limit
- B. Its interest is always tax-free
- C. The saver gives up immediate access to the money
- D. Its capital can grow with the stock market
Show answer
C. The saver gives up immediate access to the money
Notice accounts require the saver to give notice, often between 30 and 120 days, before withdrawing, or to pay a penalty. In return for this loss of access, providers usually pay a higher rate than on instant-access accounts. MoneyHelper sets out this trade-off.
5. A grandmother puts £20,000 into a bare trust for her 10-year-old granddaughter in England. When can the granddaughter demand the assets?
- A. At 16
- B. When the trustees decide
- C. At 18
- D. At 25
Show answer
C. At 18
Under a bare trust the beneficiary has an absolute right to the capital and income. In England and Wales they can take the assets at 18 (16 in Scotland). The trustees have no discretion over who benefits.
6. Under COBS 3, into which three categories are clients classified?
- A. Retail client, professional client, eligible counterparty
- B. Private client, business client, corporate client
- C. Consumer, small business, wholesale customer
- D. Basic client, advised client, discretionary client
Show answer
A. Retail client, professional client, eligible counterparty
COBS 3 classifies clients as retail clients, professional clients or eligible counterparties. The level of protection, such as disclosure and suitability rules, depends on the category.
7. In 2004 Margaret signed an enduring power of attorney appointing her son. She is now showing signs of dementia and losing capacity. What must her son do?
- A. Nothing, as EPAs became invalid in 2007
- B. Apply to the Court of Protection to be made her deputy
- C. Apply to register the EPA with the Office of the Public Guardian
- D. Ask her to sign a new LPA to replace it
Show answer
C. Apply to register the EPA with the Office of the Public Guardian
An attorney under an EPA must apply to register it with the Office of the Public Guardian when the donor is losing, or has lost, mental capacity. Before applying, the attorney must notify the donor and certain relatives, who can object.
8. What does private medical insurance pay for?
- A. A replacement income during illness
- B. A lump sum on diagnosis of a serious illness
- C. The cost of private treatment for eligible conditions
- D. Long-term residential care fees
Show answer
C. The cost of private treatment for eligible conditions
Private medical insurance covers the cost of private medical treatment for eligible conditions, giving the policyholder more choice over when and where they are treated. It does not replace income. MoneyHelper notes it may not be a priority for people with debts and no savings.
9. What is the main aim of a liquidity requirement for a firm?
- A. To ensure it makes a profit each year
- B. To ensure its staff are competent
- C. To ensure its advice is suitable for customers
- D. To ensure it can meet its obligations as they fall due
Show answer
D. To ensure it can meet its obligations as they fall due
Liquidity rules require firms to hold enough liquid assets and stable funding to meet payments as they fall due, including under stress. A firm can be solvent but still fail if it runs out of cash.
10. Under barter, a farmer who wants shoes must find a shoemaker who happens to want his vegetables. Which function of money removes this problem?
- A. Unit of account
- B. Standard of deferred payment
- C. Medium of exchange
- D. Store of value
Show answer
C. Medium of exchange
Barter needs a 'double coincidence of wants': each party must want what the other offers. Money solves this by acting as a medium of exchange that everyone accepts, so the farmer can sell to anyone and buy shoes from anyone. This is one of the three functions of money described by the Bank of England.
11. How is the FCA mainly funded?
- A. Keeping the fines it imposes on firms
- B. An annual grant from HM Treasury
- C. Fees and levies paid by the firms it regulates
- D. A share of the Bank of England's profits
Show answer
C. Fees and levies paid by the firms it regulates
The FCA is funded mainly by fees charged to regulated firms, set out in the FEES sourcebook. Financial penalties, after deducting certain enforcement costs, are paid to HM Treasury rather than funding the FCA's general budget.
12. Sara is a director of a limited company. She keeps trading for months after it should have been clear that insolvent liquidation could not be avoided. On liquidation, what is her main personal risk?
- A. A court order to contribute to the company's assets
- B. None, because a company's debts are never a director's
- C. Automatic liability for every unpaid company debt
- D. Losing only the value of her own shareholding
Show answer
A. A court order to contribute to the company's assets
Directors are normally shielded by the company's separate personality. Under the Insolvency Act 1986 s214 (wrongful trading), a court can order a director to contribute to the company's assets if she knew or ought to have concluded that there was no reasonable prospect of avoiding insolvent liquidation and did not take every step to minimise creditors' losses.
13. Under the MPC's remit, what must happen if CPI inflation moves more than one percentage point either side of the target?
- A. Bank Rate rises automatically by 0.25%
- B. The PRA reviews all bank capital levels
- C. The Governor writes an open letter to the Chancellor
- D. Parliament votes on a new inflation target
Show answer
C. The Governor writes an open letter to the Chancellor
The remit requires the Governor to write an open letter to the Chancellor if inflation is more than one percentage point above or below the 2% target. The letter explains why, what the MPC plans to do and how long inflation is expected to take to return to target. This supports accountability for an independent central bank.
14. After several transfers, laundered funds are used to buy a business whose profits then appear to be normal trading income. Which stage of money laundering is this?
- A. Smurfing
- B. Layering
- C. Integration
- D. Placement
Show answer
C. Integration
Integration is the final stage, when laundered funds re-enter the legitimate economy, for example through business or property purchases, so that the criminal can use them openly. The money now appears to have a legitimate source. Earlier stages are placement and layering.
15. Kenny and Lou own a house as beneficial joint tenants. Kenny is made bankrupt. What happens to his interest in the house?
- A. It is cancelled and Lou becomes sole owner
- B. His share vests in the trustee in bankruptcy
- C. It passes to Lou by survivorship
- D. It stays with Kenny until he is discharged
Show answer
B. His share vests in the trustee in bankruptcy
When a co-owner is made bankrupt, his share of jointly owned property passes to the trustee in bankruptcy after secured debts. This severs the joint tenancy, so Lou does not take Kenny's share by survivorship.
16. In a contested FCA disciplinary case, in what order are the statutory notices normally issued?
- A. Decision notice, warning notice, final notice
- B. Final notice, warning notice, decision notice
- C. Warning notice, final notice, decision notice
- D. Warning notice, decision notice, final notice
Show answer
D. Warning notice, decision notice, final notice
The FCA first gives a warning notice setting out the proposed action, and the person can make representations. It then issues a decision notice. Once the matter is concluded, including any Tribunal reference, it issues a final notice, which is usually published.
17. Pinewood Ltd runs a defined benefit occupational pension scheme for its staff. Which regulator oversees the scheme's governance and funding?
- A. The Financial Conduct Authority
- B. The Pensions Regulator
- C. The Prudential Regulation Authority
- D. The Payment Systems Regulator
Show answer
B. The Pensions Regulator
The Pensions Regulator (TPR), created by the Pensions Act 2004, regulates work-based pension schemes. This includes the governance and funding of occupational defined benefit schemes and the conduct of their trustees.
18. Since FSMA 2023, both the FCA and the PRA have a secondary objective relating to which matter?
- A. The promotion of financial inclusion for all households
- B. The protection of jobs in financial services
- C. The reduction of public sector borrowing
- D. The UK economy's international competitiveness and growth
Show answer
D. The UK economy's international competitiveness and growth
FSMA 2023 gave the FCA (s1EB) and the PRA a secondary objective to facilitate the international competitiveness of the UK economy and its growth in the medium to long term. A secondary objective is subject to the regulators' primary objectives.
19. Sana's net pay is £2,600 a month. Her essential outgoings are £1,500 a month and her discretionary spending is £600. Using a three-month guideline, how large should her emergency fund be?
- A. £6,300
- B. £4,500
- C. £7,800
- D. £1,500
Show answer
B. £4,500
The emergency fund guideline is based on essential outgoings, not income or total spending. Three months x £1,500 = £4,500. Discretionary spending can be cut in an emergency, so it is left out.
20. In a defined contribution pension scheme, who mainly bears the investment risk?
- A. The member
- B. The scheme trustees
- C. The employer
- D. The government
Show answer
A. The member
In a defined contribution scheme, the pension depends on contributions, investment growth and charges, so the member bears the risk that the fund performs poorly. In a defined benefit scheme, by contrast, the employer must fund a promised income based on salary and service. MoneyHelper explains the difference.
Frequently asked questions
+How many questions are in the FRE1 exam?
FRE1 has 40 multiple-choice questions in one hour. The first 25 are standalone questions and the last 15 come from 3 case studies with 5 questions each. Each question has 4 options and is worth 1 mark.
+What is the pass mark for FRE1?
The FRE1 pass mark is 28 out of 40, which is 70%. A merit starts at 80% (32 marks) and a distinction at 90% (36 marks). Merit and distinction are shown at unit level; the CeMAP qualification itself is pass or fail.
+Is FRE1 harder than FRE2?
Walbrook does not publish pass rates, so nobody can say for certain. In our reading FRE1 leans more on recall of facts such as dates, objectives and legal rules, while FRE2 leans more on applying rules and ethics to client situations. Which one feels harder depends on whether you prefer memorising or reasoning.
+Is FRE1 the same as the old CeMAP Unit 1?
Not exactly. Walbrook maps the two old CeMAP 1 (UKFR) units, ITFS and UKFS, to the pair FRE1 and FRE2 together, not one unit to one unit. FRE1 also has a new format, with 40 questions including 3 case studies.
+Can I use a calculator in the FRE1 exam?
Walbrook's public exam pages that we checked do not state a calculator rule for FRE1. FRE1 is mostly non-numerical, so it rarely matters. Check the exam instructions in Brightspace before you start.
+Are there FRE1 past papers?
No. Walbrook does not publish CeMAP past papers. It gives one free specimen paper per unit with the study materials, and our FRE1 mocks are original exam-style papers written for this site, not past papers.
+How long should I study for FRE1?
Walbrook sets 50 hours of Unit Study Time for FRE1. Spread over four weeks, that is about 12 to 13 hours a week. Candidates with a financial services background often need less.
Keep reading
- CeMAP 1: The FSRE Module and Its Two Unit Exams, FRE1 and FRE2CeMAP 1 is the FSRE module: two 40-question unit exams, FRE1 and FRE2, each 1 hour, pass 28/40. Syllabus, costs, old UKFR mapping and free mocks.
- CeMAP FRE2: Skills, Principles and Ethical BehavioursCeMAP FRE2 mock exam guide: the 40-question format, LO6 to LO8 in official order, the Consumer Duty link, common traps and a four-week plan.
- The FCA, the PRA and UK Financial Regulation for CeMAP FRE1The FCA and PRA for CeMAP FRE1: the 1986–2021 timeline, statutory objectives, the Handbook, Principles for Businesses, SM&CR and enforcement powers.
- Wills, Intestacy and Trusts: The CeMAP FRE1 Legal ConceptsWills and trusts for CeMAP FRE1: valid wills, intestacy in England, Wales and Scotland, joint ownership, trust types and powers of attorney, with examples.
- CeMAP Case Studies: A Worked Example and a Method That WorksCeMAP 3 case studies: a worked first-time buyer case with 5 answered questions, a reading method, timings for 6 cases in 2 hours and the FRE1/FRE2 format.
- CeMAP Mock Papers Explained: Formats, Question Types and How to Use ThemCeMAP practice papers explained: how each mock mirrors FRE1, FRE2, MRT1, MRT2 and ASEW, two worked questions, the 85% readiness rule and what is free.