Description

Remuneration Policy Pack for FSP Incentive Governance

The Remuneration Policy Pack is an editable downloadable template pack designed for authorised Financial Services Providers that need a structured remuneration policy, commission framework, incentive governance process and conflict of interest control record.

This Remuneration Policy Pack helps an FSP document how remuneration arrangements are designed, approved, monitored, reviewed and controlled so that they support fair client outcomes, ethical conduct, regulatory compliance and sustainable business performance.

For related FAIS compliance tools, you may also view our Representative Appointment Compliance Pack, CPD Policy Template for FSPs and Supervision Compliance Pack.

For official regulatory information, you can also visit the FSCA FAIS regulated entities page.

What Is Included In This Remuneration Policy Pack?

This pack is designed to help FSPs manage remuneration and incentive risks in a practical, auditable way. It includes policy wording, governance principles, monitoring controls and annexures that can be customised for the FSP’s actual remuneration model.

The policy section includes:

• Document control and version history
• Definitions and abbreviations
• Introduction and purpose of the remuneration policy
• Scope of application
• Legal and regulatory alignment
• Remuneration philosophy
• Governance and accountability
• Remuneration principles
• Remuneration structure
• Fixed remuneration controls
• Variable remuneration and incentive rules
• Commission and sales-based remuneration controls
• Balanced scorecard requirements
• Prohibited or restricted remuneration practices
• Conflict of interest controls
• Clawbacks, reversals and deductions
• Remuneration for control functions
• Representatives under supervision
• Non-cash rewards, gifts and recognition
• Disclosure to clients
• Monitoring, reporting and management information
• Exceptions and deviations
• Consequences of non-compliance
• Recordkeeping requirements
• Policy review and approval

Remuneration Policy Pack Annexures Included

The Remuneration Policy Pack includes practical annexures that help the FSP move from policy wording to implementation evidence.

The annexures include:

• Annexure A: Remuneration Structure Schedule
• Annexure B: Commission and Incentive Schedule
• Annexure C: Balanced Scorecard Template
• Annexure D: Incentive Approval Form
• Annexure E: Remuneration Conflict of Interest Assessment
• Annexure F: Clawback and Reversal Register
• Annexure G: Annual Remuneration Policy Review Checklist
• Annexure H: Staff / Representative Acknowledgement

Why FSPs Need a Remuneration Policy Pack

Remuneration can influence behaviour. Commission structures, incentives, bonuses, referral fees, non-cash rewards and sales targets may affect advice quality, product selection, replacement behaviour, disclosure, client service and complaint outcomes.

This Remuneration Policy Pack helps an FSP document how remuneration will be controlled so that sales performance does not override fair treatment of clients, suitability of advice, compliance quality or proper recordkeeping.

This pack helps address common weaknesses such as:

• No written remuneration policy
• No approved commission or incentive schedule
• Incentives based only on sales or production volume
• No link between incentives and advice quality
• No process to review complaints, cancellations, lapses or replacements before incentive approval
• No clawback or reversal register
• No remuneration conflict of interest assessment
• No annual remuneration policy review checklist
• No acknowledgement by staff or representatives
• No clear record showing how remuneration decisions were approved

Commission, Incentive and Balanced Scorecard Controls

The pack includes wording and templates to help the FSP assess commission, incentives and variable remuneration using balanced measures. This includes financial performance, client outcomes, compliance quality, operational discipline and professional conduct.

This allows the FSP to avoid a remuneration model that rewards production without considering conduct, advice quality, complaints, recordkeeping, compliance breaches or client outcome risks.

Conflict of Interest and Clawback Controls

The Remuneration Policy Pack includes a remuneration conflict of interest assessment to help the FSP check whether a remuneration arrangement may favour one product supplier, encourage replacement abuse, reward volume without quality controls, or create a risk that a less suitable product may be recommended.

The clawback and reversal register helps the FSP keep a record of commission reversals, policy cancellations, lapses, errors, misconduct-related recoveries and other remuneration adjustments.

Who Should Use This Remuneration Policy Pack?

• Authorised Financial Services Providers
• FSPs that pay commission or incentives
• FSPs with appointed representatives
• FSPs using referral agents or contractors
• Key Individuals responsible for oversight
• Compliance officers reviewing conduct risk
• Managers responsible for sales, incentives, quality assurance or payroll approvals

Editable and Customisable FSP Template

This Remuneration Policy Pack is editable and must be customised before use. The FSP must insert its name, FSP number, policy owner, approval authority, remuneration structures, commission rules, incentive measures, clawback rules, approval process, conflict controls and review frequency.

The pack includes client notes to guide customisation. These notes should be removed before the final policy is approved and implemented by the FSP.

Important Compliance Note

This Remuneration Policy Pack is a compliance support document and does not replace legal advice, labour advice, tax advice or a full remuneration governance review. Each FSP remains responsible for ensuring that its final remuneration policy is accurate, lawful, implemented, reviewed and aligned with its actual business model, representative structure, contracts and current regulatory requirements.