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Legal Notices

Regulatory Information

Tees Financial Ltd is authorised and regulated by the Financial Conduct Authority to conduct investment business. Tees Financial Ltd appears on the FCA register under number 211314. Tees Financial Ltd is registered in England and Wales (4342506).

Tees Financial Ltd is a wholly owned subsidiary of Trust Tees Ltd which is registered in England and Wales (07497167). Tees is a trading name of Tees Financial Limited and any reference to Tees in this document incorporates Tees Financial Limited.

Whilst care has been taken in preparing this publication it is for information only. It is not and should not be construed as advice and accordingly no reliance should be placed on the information contained therein. Any views or opinions expressed herein are not necessarily the views or opinions of Tees or any part thereof and no assurances are made as to their accuracy. Please contact Tees to discuss matters in the context of your particular circumstances.

Issued in the UK only. This document is only for your use and must not be circulated to anyone else without our consent. 


Pillar 3 Disclosure (including Remuneration Code)

Section Contents
1 Background
2 Overview of firm
3 Frequency of disclosure
4 Management of risk
5 Capital resources
6 Renumeration

1. Background

Having adequate capital resources is a key threshold condition and firms with Investment Management permissions are subject to higher capital resource requirements and more stringent rules surrounding the monitoring of this. This is because this type of firm falls within the scope of MiFID and under the full scope of the Capital Requirements Directive (CRD) which fully came into force on 1 January 2008.

The CRD approach is based around 3 ‘Pillars’ i.e. ‘Pillar 1’ / ‘Pillar 2’ and ‘Pillar 3’. These 3 Pillars collectively form the framework for the prudential supervision of banks, credit institutions and certain investment firms – including BIPRU firms. The CRD specifies the amount and nature of capital, credit institutions and investment firms must hold.

Pillar 1 Pillar 1 revises existing minimum regulatory capital standards for three major 'risks' that firms face i.e. credit, market and operational risk.
Pillar 2 Pillar 2 requires firms to assess the amount of internal capital they consider will cover all of the risks they are, or likely to be, exposed to. 
Pillar 3 Pillar 3 requires firms to publish key information about their underlying risks, models, controls and capital position, to the market forces brought to bear in these areas.

2. Overview of Firm

The firm is authorised and regulated by the Financial Conduct Authority (FCA). The firm falls into the conduct category 4 and prudential category 3. 

It is an investment management firm, which comes under the prudential category for Banks, Building Societies and Investments firms (BIPRU) in the FCA Handbook.

The firm is a BIPRU for investment business and does not have permission to deal for its own account.

Tees Financial Limited is a Financial Planning Firm which consists of providing advice regarding investment, protection, retirement, equity release, long term care and inheritance tax planning.

3. Frequency of Disclosure

The Firm will make its annual Pillar 3 disclosures on our website ( after approval of the year end financial statements and review of its ICAAP.

Except in relation to disclosures under Remuneration, we may omit information which we consider to be regarded as proprietary or confidential.

4. Management of Risk

The senior management have designed and implemented a strategy to mitigate the risks that the firm faces through the application of appropriate systems and controls.

The firm has identified the material risks to which it could be exposed and these have been assessed and quantified in the firm’s ICAAP.

5. Capital Resources

Pillar 1 – Minimum capital resource requirement

Its minimum capital resource requirement is the higher of:

  • The base capital resource of €50k, or 
  • The sum of total it’s ‘credit risk’, ‘market risk’, ‘business risk’ and ‘operational risk’ requirements, or
  • Its fixed overhead requirement (FOR).

Credit risk

‘The risk of loss due to a debtor’s non payment of monies owed at a stipulated time’.

This risk is analysed and considered as part of ICAAP and is not considered applicable.

Market risk

‘The risk of losses in on and off balance sheet positions arising from movement in market prices (BIPRU 7)’.

The board has considered this risk as part of ICAAP. In the event of a 20% downturn in world markets, income would fall to approximately £1,440,000. The board regards this a realistic assessment in the light of the exit of the UK from the EU. The firm would be able to continue trading if this were to occur.

Business Risk

The firm’s Pillar 2 business risk assessment principally takes the form of a fall in assets under management following a market downturn that leads to lower advice fees, although other risks such as loss of advisers and systems failures are also considered. To mitigate our business risk, we regularly analyse various different economic scenarios to model the impact of economic downturns on our financial position.

Operational risk

‘The risks of poor investment performance of funds under management, legal and reputational risks’.

Investment performance is covered in the section above and there is an established disaster recovery/ business continuity plan in place.

It is considered that there are adequate staff to deal with the loss of experienced personnel.

Fixed Overheads Requirement (FOR)

The FOR is an amount equal to one quarter of the firm’s relevant fixed expenditure.

The FOR as set out in our annual audited accounts as at 31 March 2020 is £408,239.

Pillar 2

A firm must, amongst other things, assess regularly the amount of internal capital it considers adequate to cover all of the risks to which it is exposed within the context of its overall risk management framework. The process is known as the Internal Capital Adequacy Assessment Process (ICAAP).

The firm has considered and assessed the following areas of potential risks to its business and summarises its approach to each one:

Liquidity risk 

‘The risks of a firm not maintaining sufficient liquid resources to cover any potential imbalances and fluctuations in fees receivable and expenditure which is unknown and unplanned’.

There are adequate cash balances and in the event of a sustained and prolonged downturn, actions would be taken to reduce the cost base.

Securitisation risk

‘The effect on a firm’s financial position of a securitisation arrangement failing or of the values and risks transferred not emerging as expected’.

The board has considered this as part of its ICAAP analysis and has concluded that it does not constitute a risk.

Interest rate risk

‘The effect on a firm’s financial position as a result of interest rate changes and the effect of this on the balance sheet’.

The firm has no direct borrowings and would not be vulnerable to any interest rate rise even if such is considered unlikely in the current economic environment. Inter company liabilities carry no interest obligation.

Insurance risk

‘The effect of having inadequate insurance cover to cover a claim or the effect on a firm’s cash flow after payment of an excess on the policy’.

The firm has insurance cover of £1.85 million per claim and an excess of £5,000 for all classes of claims except defined benefit pension transfer cases, for which the excess is £30,000. This is within our ability to meet it, should a claim arise. 


The firm’s Pillar 1 capital is the higher of €50k or the Fixed Overhead Requirement (FOR) which is £408,239.

The Firm’s Pillar 2 capital is calculated as any additional capital that the firm considers it should hold against any risks that are not adequately covered under the Pillar 1 requirement. The firm has calculated this to be £577,239 (based on audited accounts as at 31.3.20).

The firm’s regulatory capital resource requirement is £577,239, which is the unadjusted Pillar 2 capital.

The Firm holds Tier 1 capital of £5,279,123. This comprises of cash and current assets, less liabilities and produces a surplus over the capital requirement of £4,701,884.

6. Remuneration 

Remuneration currently consists of basic salary for all employees.

The FCA rules require certain firms to disclose aggregate information on remuneration in respect of its BIPRU Remuneration Code Staff broken down by business area, senior management and other Code Staff, including “risk takers”.  

The firm only has one business area - investment management. 

The firm has 3 Directors and 1 Non-Executive Director, but no “risk takers”. 

The link between performance and pay is inevitable in a small firm, but the firm’s risk adverse strategy and robust risk management systems mitigate any risks.

Compiled by

Name: James Appleby

Position: Managing Director

These disclosures have been based on the firm’s position as at 31 March 2020.

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Tees coronavirus update

We’re open and here to help you. We’re running as normal with our employees all working from home.

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You can call us as normal on 0800 013 1165 or email us:

You can also find contact details for all our advisers here. 

As a flexible and technologically-adept firm, we already had many home-working systems in place. We have now rolled this technology out to all our employees working for clients, so they can continue to work normally - and from home.

If you are a client, please be assured you can get in touch with Tees and we are still working on your case. To replace face-to-face meetings, we have the facilities to do video-conferencing, conference calls or just speak on the phone, as you need.

Due to the circumstances, please call us if you would have wanted a home visit, and we can organise the best and safest way of being in touch.

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