Streamlining Success: Incentives Automation in Financial Services


Incentive programs in India's financial services industry are complex due to diverse regulatory requirements from bodies like SEBI and RBI, a wide range of financial products with varying sales cycles, multiple performance metrics (both qualitative and quantitative), diverse roles within firms, and the need for customization across different client segments. Balancing these elements while ensuring compliance and fairness adds to the overall complexity. This blog delves into these nuances and the considerations a financial services organization must take into account while compensating their salesforce

Typical Incentive Components
in a Financial Services Organization

Cash Margins

Broking Revenue


Cash Margins

Cash margin refers to the amount of money a client must deposit with their financial services broker before they can buy or sell equities. Sales advisors are paid incentives on cash margins their clients set aside for trading as higher the margin higher the appetite of the client to trade which yields more revenue for the financial services broker

Given the direct access to consumer, financial services brokers can go beyond making revenue through trading. They can sell third-party products like insurance, mutual funds etc for which the sales advisor may be eligible to earn an incentive

It is the number of active clients against the total no of clients assigned to a sales advisor. Higher activity refers to better client servicing on the seller’s behalf and can serve as a qualifier for an incentive or can be an incentive component by itself

Revenue credits define how much revenue from specifics sources, channels, products etc should be considered towards incentive calculation for the seller. As an example, there may be a 110% credit towards revenue generated by client sourced by the seller himself. Meaning broking revenue of 1,00,000 will be considered as 1,10,000. On the other hand, to avoid offline transactions, the credit may be 50%. In such case the amount to be considered now will be 50,000. Revenue credits are a way of pushing the appropriate product, channel combination that the business prefers


Vintage is the most common way of applying incentive plans to sellers based on their experience within the organization. Usually, the incentive plans do not change much; however, based on the vintage, i.e. the experience; the targets or payout slabs change

As an ever-evolving industry, financial services organizations keep on introducing new products. Additionally, mature products usually don’t need selling efforts. Eligibility is organizations considering only a set of products from an incentivization standpoint

Sales contests provide a structured and competitive environment that provides insurance agents and brokers to an opportunity to win prizes and garner recognition. This energizes sales teams, boost morale, and inspire them to put in extra effort to achieve their goals.

It is the total revenue managed by advisors for the clients assigned to him/her. AUM is a metric of the quality and the size of the business and higher the AUM, higher is the potential for the organization to earn broking revenue through the clients.

Broking Revenue

Broking Revenue is the primary source of income from financial service broking firms. It is primarily the income coming from trading commissions, advisory fees, interest income, asset management fees etc. Incentive earned by sellers is usually a portion of this amount paid to them by the financial services broking organizations


In summary, the financial services industry’s complexity necessitates effective incentive management strategies to align incentives with diverse roles and org goals. Incentivate helps you simplify processes, foster transparency, improve campaign roll out speed and empower salespeople with tools they need to succeed.