CeMAP FRE2 The Advice Framework: Clients, Disclosure, Charging & Vulnerability question: Imran's broker works from a panel of lenders

CeMAP FRE2The Advice Framework: Clients, Disclosure, Charging & Vulnerability

Imran's broker works from a panel of lenders. After a full assessment, none of the panel's products is suitable for Imran. What must the broker do?

A Recommend the panel product that comes closest to his needs and record the gaps
B Tell Imran it cannot recommend a product, rather than recommend the nearest fit
C Switch to an execution-only sale, so that the suitability rules no longer apply
D Recommend a lender outside the panel without telling the network

Show the answer and explanation

Answer: B. Tell Imran it cannot recommend a product, rather than recommend the nearest fit

MCOB 4.7A.5R defines suitability by reference to the customer's needs and circumstances, and where no contract in the firm's range is suitable the firm must not make a recommendation (handbook.fca.org.uk, checked 11 Oct 2026). 'Closest fit' is still unsuitable. Switching to execution-only to avoid the suitability duty would not treat Imran fairly (Principle 6 and PRIN 2A), and going outside the panel breaches the firm's own scope and disclosure.

Common mistake

Believing a 'least bad' recommendation is acceptable when nothing suits.

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Original practice material mapped to the published CeMAP FRE2 learning outcomes. Independent, not endorsed by Walbrook (formerly LIBF). Verify figures and rules against current guidance before relying on them.