R01 Cheat Sheet 2025/2026 — Free

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10 exam-style R01 questions. See your score instantly, then use the cheat sheet below to fill the gaps.

Question 1 of 10

LO1UK financial services industry in its European & global context6 standard Qs

Markets & participants

Money markets

Short-term borrowing/lending (under 1 year). Instruments: Treasury bills, CDs, commercial paper.

Capital markets

Primary = new issues.
Secondary = existing securities traded (e.g. LSE).

Gilt market

New gilts issued by Debt Management Office (DMO). Subsequent trading on the London Stock Exchange.

Portfolio management

A bank with its own portfolio management team provides a discretionary management service.

Monetary policy — Bank of England

Sets Bank Rate (base rate)
Controls money supply & inflation
Financial Policy Committee (FPC) = macroprudential stability

Fiscal policy — HM Treasury / Government

Controls taxation & government spending
Bank Rate change = monetary; Income Tax change = fiscal

Balance of payments surplus = more goods/services exported than imported.

Public companies raise long-term capital by issuing bonds AND shares.

LO2How the retail consumer is served by the financial services industry12 standard Qs

Priority order of financial needs

1. Manage debt→ 2. Budget & borrow→ 3. Protection→ 4. Save & invest→ 5. Retirement→ 6. Estate & tax planning

Key product knowledge — exam favourites

Scenario	Correct product / answer	Key reason
Income if unable to work	Income protection insurance	Max benefit ~65% of pre-incapacity earnings. Upper limit = moral hazard.
Reducing life cover need tailing off by age 40	Family income benefit	Pays a regular income stream, better matching the reducing need.
Critical illness — prohibitively expensive premium	Reviewable premium basis	Immediately reduces premium while maintaining same cover level.
Pension commencement lump sum despite cash deposits	Tax efficient to do so	PCLS is tax-free.
Loan consolidation may NOT help	Consistent history of overspending	Consolidation doesn't fix the underlying behavioural cause.
Adviser won't advise if client won't disclose income	Record on fact-find that client refused	Record refusal and continue — do NOT refuse all advice.

ISA rules — exam-tested figures

ISA limits 2025/26

Adult ISA limit: £20,000
Junior ISA: £9,000
Child aged 16–17 can open adult cash ISA AND JISA

ISA family calculation

2 adults × £20,000 = £40,000
+ child aged 18 × £20,000 = £20,000
+ child aged 16 × £9,000 JISA only
Total = £69,000

State benefits

Statutory Paternity Pay: up to 2 weeks
Maternity Allowance (self-employed): max 39 weeks

Exam trap: Family of 4 (2 adults, children aged 16 & 18), stocks & shares ISAs only. 16-yr-old cannot open S&S ISA — JISA only. 18-yr-old counts as adult. So: 3 × £20,000 = £60,000.

LO3Legal concepts and considerations relevant to financial advice9 standard Qs

Law of contract — essential elements

Offer→Acceptance→Consideration→Capacity→Legality→Binding contract

Counter offer: Insurer changes terms (e.g. increased premium) = counter offer. Original offer rejected, new one made.

Minors (under 18): Do NOT have legal capacity to contract.

Non-disclosure: Claim can be rejected even for inadvertent non-disclosure — does not have to be deliberate.

Business structures & liability

Structure	Personally liable?	Key point
Sole trader / self-employed	Yes — unlimited liability	All personal assets at risk
Partnership (general)	Yes — joint & several liability	Partners personally liable
Limited Liability Partnership (LLP)	No — limited to investment	Must be registered at Companies House
Limited company (Ltd / PLC)	No — separate legal entity	Shareholders' liability limited to share value

Tom personally liable = self-employed. Bobby not = company director.

Insolvency — order of priority

Order of priority in bankruptcy

1. Secured creditors
2. Preferential creditors (employees)
3. Ordinary unsecured — pro rata
4. Shareholders (last)

Intestacy — England & Wales

Spouse survives → entire estate if no children
Children exist → statutory legacy to spouse, remainder split

Trusts

Trust type	Beneficiaries known?	Trustee discretion?	Key feature
Absolute (bare) trust	Yes — fixed & named	No	Beneficiary can demand assets at 18
Discretionary trust	Not necessarily	Yes — full discretion	Used when beneficiaries not yet certain
Interest in possession trust	Yes	Limited	Beneficiary entitled to income; capital goes elsewhere

George doesn't know beneficiaries → discretionary trust. William knows exactly → absolute trust.

Fiduciary duty exists between trustee and beneficiary — NOT between trustee and beneficiary's spouse.

LO4Regulation of financial services6 standard Qs

FCA — Financial Conduct Authority

Conduct regulation of ALL financial services firms
Consumer protection, market integrity, competition
Directly accountable to HM Treasury

PRA — Prudential Regulation Authority

Part of Bank of England
Prudential regulation of banks, insurers, large investment firms

Bank of England / FPC

Financial Policy Committee = macroprudential stability
Monetary Policy Committee = Bank Rate

Body	Role
Competition and Markets Authority (CMA)	Competition & markets investigation. Reports go to HM Treasury.
The Pensions Regulator (TPR)	Regulates workplace pension schemes
Information Commissioner's Office (ICO)	Data protection enforcement
Payment Systems Regulator (PSR)	Regulates payment systems

LO5Financial regulators' responsibilities and approach to regulation29 standard Qs — largest section!

FCA structure & internal bodies

Body	Role
Regulatory Decisions Committee (RDC)	Keeps investigation and recommendation functions separate from decisions/statutory notices. Set up by FSMA 2000.
Upper Tribunal	Independent — appeals against FCA enforcement go here.
Practitioner Panel	Represents industry. FCA must consider recommendations but has NO obligation to amend rules.
Consumer Panel	Represents consumer interests.

Senior Managers & Certification Regime (SM&CR)

Senior management functions — FCA pre-approval required

Compliance manager
Money Laundering Reporting Officer (MLRO)
Chief Executive, Finance Director
NOT: financial adviser, IT manager, HR manager

Fit & Proper — conviction

FCA considers conviction only if relates to ability to carry out the role
Bankruptcy → firm must notify FCA immediately

Record keeping

Pension transfer records: Indefinitely
Most investment records: 5 years
Life assurance/pension: duration + 3 years

Market abuse & penalties

Criminal offence penalties

Market abuse / insider dealing: unlimited fine OR up to 10 years imprisonment
Max prison = 10 years (increased from 7 years on 1 November 2021)

Civil penalties

FCA civil fines = unlimited
Market abuse fine → may affect future employment but does NOT automatically prohibit

Under Consumer Duty, the Consumer Principle = firm must act to deliver good outcomes for retail clients (NOT all clients, NOT eligible counterparties).

Client money: annual client money audit AND annual report required. Must be paid in promptly.

LO6Apply the principles and rules as set out in the regulatory framework4 standard + 5 multiple response Qs

Client categorisation

Category	Who qualifies?	Key rules
Retail clients	All clients who are neither professional nor eligible counterparties	Highest protection. Consumer Duty applies fully.
Professional clients (per se)	Banks, investment firms, insurers, large corporates	Reduced protections. Can elect to be retail.
Eligible counterparties (per se)	EU/UK governments, central banks, credit institutions	Minimal protection. UK pension fund = NOT per se ECP.

Complaint handling — key timings

Complaint timelines

Acknowledge within 5 business days
Hold response within 4 weeks
Final response: within 8 weeks of receipt

Worked example

Received: 4 March
8 weeks from 4 March = 29 April

After final response

Client can refer to Financial Ombudsman Service
Must be told of this right in final response

Maximum FOS award: £430,000 for complaints referred before 1 April 2026 (exam figure until 1 July 2026).

Financial Services Compensation Scheme (FSCS)

Product type	FSCS limit
Deposits (savings/cash) — from 1 Dec 2025	£120,000
Joint deposit accounts	£120,000 each (£240,000 jointly)
Investments (S&S ISA, investment bonds)	£85,000
Insurance policies	90% of claim (no upper limit on long-term)
Temporary high balances (e.g. property sale)	£1,400,000 for up to 6 months

Key distinction: Deposit protection = £120,000. Investment protection = £85,000. These are separate limits.

Marketing opt-out breach = data protection legislation (NOT Conduct of Business rules). Data protection = ICO / GDPR.

LO7Apply the regulatory advice framework to ensure fair outcomes for the consumer5 standard + 8 multiple response Qs

Independent financial adviser (IFA)

Considers ALL products from ALL providers
Unbiased, unrestricted whole-of-market advice

Restricted adviser

Limited to specific providers or products
Must disclose restriction clearly

Execution-only client

Client initiates, no advice given
No suitability assessment required

Suitability reports — when required?

Situation	Suitability report required?
Recommended products (unit trust, investment bond)	Yes — must include disadvantages
Execution-only personal pension	No
Pension transfers	Yes, always
Regulated mortgage contract	Not required
Friendly society policy	Always required

Cancellation rights

Product	Cancellation period
Life assurance / Personal pension plan	30 days
Cash ISA / Stocks & shares ISA / unit trust / OEIC	14 days
Enterprise Investment Scheme / Junior ISA	No statutory right

Worked example: Arranged 1 June, check 25 June (24 days later). Cash ISA (14 days) = expired. Term assurance (30 days) = still in period. EIS = no right. PPP (30 days) = still in period.

LO8Range of skills required when advising clients4 standard Qs

Open-ended questions

Primary purpose: to obtain the client's views and opinions. NOT to quantify assets, secure trust, or create commitment.

Diversification

Socially responsible investment approach = more limited diversification opportunities — restricts the investment universe.

Reduction in yield

Helps client understand impact of charges on the fund. NOT financial strength of provider, inflation, or volatility.

Suitability should be the consequence of proper adherence to the know your customer rule. The fact-find drives suitability.

LO9Financial regulators' use of principles and outcomes-based regulation7 standard Qs

FCA's Principles for Businesses

#	Principle	Exam relevance
1	Integrity	Act with integrity
2	Skill, care and diligence	Competence requirement
3	Management and control	Systems & controls
4	Financial prudence	Have adequate financial resources — NOT about client debt or excessive risk marketing
5	Market conduct	Proper standards of market conduct
6	Customers' interests	Act in best interests of customers
7	Communications with clients	Fair, clear, not misleading
8	Conflicts of interest	Manage conflicts fairly
9	Customers: relationships of trust	Take reasonable care to ensure suitability
10	Clients' assets	Adequate protection of client assets
11	Relations with regulators	Deal openly with regulators
12	Consumer Duty	Act to deliver good outcomes for retail clients

Adherence to Principles is MANDATORY. Firms must adhere but have discretion as to HOW they comply.

Financial prudence (P4) = firm must have adequate financial resources. NOT about clients' debt levels.

LO10Apply the Code of Ethics and professional standards2 standard Qs

Income protection — earnings reduced

Emily's earnings fell to £25,000 but policy covers £30,000. Considering only FCA Statements of Principle:

✓ Inform Emily she may be paying for cover on which she cannot claim.
✗ Do NOT cancel/replace.

Pension contributions — no earnings

Harriet (homemaker) paying £500/month, no earnings for 3 years.

✓ Recommend she reduces contributions (only £2,880/yr relief available with no earnings).
✗ Do NOT report to HMRC.

Consequentialism / Utilitarianism

Right action = best outcomes for the greatest number.

Deontology (Kant)

Duty-based ethics. Some actions are inherently right or wrong regardless of outcome.

Virtue ethics

Focuses on character of the person — honesty, courage, fairness.

LO11Critically evaluate outcomes: ethical vs compliance-driven behaviours3 standard Qs

Ethical behaviour indicators

High persistency levels = ethical
Client referrals increasing
Low complaint rates
Acting with integrity, not just following rules

Unethical / compliance-only indicators

Churning: High cancellation rates after commission period ends
Over-committing clients' budgets
Creating unrealistic expectations

Pure protection policies cancelled immediately after commission period = unethical churning.

High persistency levels = clients keeping policies = good outcomes = sign of ethical behaviour.

FIGURESKey figures & tax tables 2025/2026Provided in exam

Income tax

£12,570

Personal Allowance

20%

Basic rate (£0–£37,700)

40%

Higher rate (£37,701–£125,140)

45%

Additional rate (£125,141+)

£100,000

PA taper starts

£1,260

Marriage Allowance

FSCS & FOS limits

£120,000

FSCS deposit limit (from 1 Dec 2025)

£85,000

FSCS investment limit (unchanged)

£1,400,000

Temporary high balance (from 1 Dec 2025)

£430,000

Max FOS award (exam figure until 1 Jul 2026)

Pensions 2025/2026

£60,000

Annual Allowance

£10,000

Money Purchase Annual Allowance

£268,275

Lump Sum Allowance (LSA)

£1,073,100

Lump Sum & Death Benefit Allowance

CGT & IHT 2025/2026

Tax	Rate / Amount
CGT — basic rate (non-residential)	18%
CGT — higher/additional rate (all assets)	24%
CGT annual exemption — individuals	£3,000
IHT nil rate band	£325,000
IHT residence nil rate band	£175,000
IHT death rate	40%
IHT annual exemption per donor	£3,000

ISA limits & other key allowances

£20,000

Adult ISA (all types)

£9,000

Junior ISA

£500

Dividend Allowance

£1,000

PSA — basic rate