The following disclosures are in fulfilment of the requirements of Part 8 of the Financial Services (Investment Firms) (Prudential Requirements) Regulations 2021, which came into force on 1 July 2022.  


Risk Management objectives and policies 

Alvar Financial Services Limited (“the Firm”) has undertaken a comprehensive review of its Risk Management architecture, under the Enterprise Risk Management framework, this has included reviewing the Firm’s objectives and policies to ensure they align and reflect the ideals of the Firm, market best practice and regulatory compliance. This has involved a review of all aspects of the business, including the monitoring and risk controls with respect to capital requirements, concentration risk and liquidity risk, strategy and risk profile as part of the Enterprise Risk Management framework.  The purpose being to enhance the structure going forward to place the business on a stronger footing for organic growth benefiting our clients with improved services and risk management controls. The Firm has revised its Enterprise Risk Policy to ensure that this reflects the latest market best practices and regulatory expectations, this includes a concise risk appetite statement which confirms the Firm’s prudent attitude to risk. These initiatives are welcomed given that they support the Firm with a robust Risk Management control environment going forward and demonstrate management’s commitment to ensuring that the Firm is run with high standards of Risk Management and corporate governance, thus assuring investors of a well-run and established institution.   



As with Risk Management the Firm has reviewed its Corporate Governance arrangements. This has included a review of the structure of board committees, their terms of reference, management meetings and their terms of reference. The purpose being to align the various components of Corporate Governance to ensure that committee and management meetings, terms of reference reflect a proper oversight of the Firm and its activities to ensure that these align with policies and procedures, regulatory obligations and market best practice.   

The Firm has a dedicated Risk Management forum which reports to a Board Committee on a quarterly basis and a Management Meeting on a monthly basis. This allows for the function to be able to expose to the Board and management body any matters of concern which need to be reported and addressed.  

The number of directorships held by each member of the Board and management body in Gibraltar at 31 December 2023 was as follows: 

A T McGrath (3) , M C Leadbeater (2) , J M Wilson (2) , J C Page (2) , B S Kelly (2) 

The composition of the Board and management body reflects the Firm’s adherence to diversity. The Firm encourages diversity and recruits members to the Firm at all levels on the basis of their skills and experience and not their gender, ethnic background or any other consideration. The primary motivator being what the team member brings to the Firm to enhance the operational architecture and effectiveness of the Corporate Governance infrastructure.   


Own Funds 

The Firm continues to meet the Own Funds as set out in the regulatory standards. All the necessary deductions have been applied in determining Own Funds.  

In determining the Firm’s Own Funds, intangible assets and investments in subsidiaries have been deducted in full. The Firm’s Own Funds at 31 December 2023 were £6.5 million after deducting intangible assets (£1.0 million) and investments in subsidiaries (£7.3 million) from its audited Net Assets (£14.8 million). The Firm is in the process of absorbing the business lines of its largest subsidiary (Argon Financial Limited (“Argon”)). Upon completion of the transfer of the Argon business lines, it is anticipated that Argon will undergo an orderly wind down which will increase the Firm’s Own Funds by the value of its investment in Argon (£7.3 million as at 31 December 2023). 

Post wind-up of Argon, the Firm’s Own Funds are anticipated to be £13.8m. 

The Firm’s Own Funds is made up entirely of Common Equity Tier 1 capital. The Firm does not have any Additional Tier 1 or Tier 2 Capital. The Firm’s Common Equity Tier 1 capital is made up of fully paid up shares. 

No restrictions have been applied to the calculation of Own Funds. 


Own Funds Requirements 

The Firm’s Own Funds requirements have been comfortably met and the Firm continues to improve its financial performance. Management will continue to recommend to the Board that any surplus funds generated will continue to be added to reserves for the foreseeable future in order to continue to strengthen the Firm’s Own Funds. At all times the Firm has performed within its Own Funds requirements.   

The Firm’s approach to assessing the adequacy of its internal capital to support current and future activities is undertaken through the preparation of a budget based on appropriate estimates of costs to sustain the business and grow this against business expectations, and through the ICARA process in which Risk Management plays an integral part in the allocation of capital against potential future risks. These processes allow for the appropriate allocation of capital for continued investment in systems and controls to enhance the Firm’s operations and further mitigate risks. The Board reviews the Firm’s capital surpluses and actual results against budget on a quarterly basis. 

At 31 December 2023, the Firm’s aggregate K-factor requirements and its Fixed Overhead requirement (“FOHR”) were as follows: 

RtC £0.9 million , RtF £3.2 million , RtM £0.0 million , FOHR £2.4 million 


Remuneration policy and practices 

The Firm’s pay strategy is designed to reward competitively the achievement of long-term sustainable performance and attract and motivate the very best people, regardless of gender, ethnicity, age, disability or any other factor unrelated to performance or experience, while performing their role in the long-term interests of our stakeholders.   

To achieve this objective, the Firm believes that effective governance of its remuneration practices is a key requirement. The design and implementation of remuneration policies are overseen by the Remuneration Committee to ensure what the Firm pays its people is aligned to the Firm’s business performance and strategy. Performance is judged not only on what is achieved over the period but more importantly on how it is achieved, as the Firm believes the latter contributes to the long-term sustainability of the business. Total compensation (fixed pay and variable pay) is the key focus of the Firm’s remuneration framework, with variable pay (primarily bonus pools and annual incentives) differentiated by performance, conduct and adherence to the Firm’s values.  

The remuneration arrangements of the Firm have been designed in a manner that: 

(i) is consistent with and promote sound and effective risk management;  

(ii) does not encourage risk-taking that is inconsistent with the risk profile of the Firm; and  

(iii) does not impair compliance with the Firm’s duty to act in the best interests of the clients 


All remuneration paid to staff in 2023 was in cash (other than contributions to workplace pensions and benefits such as health insurance and life assurance). The Firm does not award any deferred remuneration.  

Remuneration for 2023 is broken down as follows and is split between material risk takers (“MRTs”) and non-MRTs:  




Number of staff



Total fixed remuneration 

£4.8 million  

£1.8 million  

Total variable remuneration (all cash) 

£0.3 million  

£0.0 million  

Proportion of total variable remuneration deferred 




No severance payments were awarded in 2023 that related to 2022. Severance payments totalling £83,885 were awarded to six individuals in 2023, of which £23,500 was paid in January 2024. The highest payment awarded to a single individual was £30,000. 


Neither Regulation 85(6) nor 85(7) apply to the Firm. 


Investment Policy 

The Firm does not hold shares directly or indirectly. The Firm’s equity is held by the beneficial owner of the entity directly.  There are no shareholder options in this regard. 


Environmental, social and governance risks 

Throughout its governance arrangements and the HR culture which the Firm promotes, is a reflection of the social diversity which it wishes to promote. The Firm encourages and rewards staff on their contribution to the Firm regardless of their background. It encourages a prudent approach to risk taking to ensure that risks are appropriately managed and mitigated to ensure that these are managed within the Firm’s prudent risk management objectives.   


The Firm has undertaken further work to review and enhance the sustainability of its services offered to clients, in particular those in the retail sector. This has been undertaken with a particular focus on Consumer Duty responsibilities to ensure that the Firm has a firm focus and commitment to these clients to ensure that their investment needs and objectives are met with the appropriate social responsibility regarding their financial well being and social wellbeing. The Firm will continue to review and enhance these arrangements as best market practice develops in this area.