Are These Reasonable Questions & Expectations For An IMO/ FMO?

[N2TAgent]

Hi all, in an effort to make sure I'm asking the right questions of a potential IMO / FMO, are the following reasonable expectations? Please be blunt if they aren't and feel free to add any additional info:

1) Commission Split In writing and part of the signed agreement (between me and the IMO / FMO)

2) Vesting - Vesting agreement in writing and part of the signed agreement (between me and the IMO / FMO)

3) Release Policy in writing and part of the signed agreement (between me and the IMO / FMO) (basically, if nothing is owed to any carriers, I want an immediate release)

4) If I sign up with an IMO / FMO that has a focus on FE, for example, can I still sell other products of a given carrier? (For example, if I'm selling FE w/an IMO / FMO, but decide to buy some IUL or MP leads, would those products generally be available to me?)

5) Misc Questions:

5-1) Can I opt to get paid "as earned" vs "advanced"? Is there a negative to this (other than getting a smaller initial check)?

5-2) Casework - Is the best resource for help on this the Carriers themselves? Seems like it would be.

5-3) How do IMO's / FMO's make money if they offer 100%+ splits? Nothing is free in this world

As always, thank you - I also thought these questions (and hopefully answers )may serve as a resource for those in my shoes.

 

[Newby]

None of that is out of line and is just basic stuff you should be asking us prior to contracting. If you want the answers in writing and signed, no biggie.

The reason new agents start at 120% with most FE products is because companies don’t allocate 100% of the annual premium selling policies they allocate 200% (the first two years of annual premium) to sell the policies. Your IMO will usually be at 150% commission level on FE. It’s standard to give you (the agent) 120% thus giving themself a 30% over ride. For their 30% they are expected to run training, lead programs, provide underwriting and quoting software, etc.

No. You are not out of line.

 

[DonP]

None of that is out of line and is just basic stuff you should be asking us prior to contracting. If you want the answers in writing and signed, no biggie.

The reason new agents start at 120% with most FE products is because companies don’t allocate 100% of the annual premium selling policies they allocate 200% (the first two years of annual premium) to sell the policies. Your IMO will usually be at 150% commission level on FE. It’s standard to give you (the agent) 120% thus giving themself a 30% over ride. For their 30% they are expected to run training, lead programs, provide underwriting and quoting software, etc.

No. You are not out of line.

People will ask how can a company make money paying the first 2 yrs of premium as commission the first 2 yrs . I recall twilight on here quoting talking with many CO’s that by year 5 only 50% of fe policys are still on the books . So year 3 1/2 to 5 is pure profit . Now of course there’s death claims . But by year 10-15 many people’s premiums will equal the death benefit . So that’s 100 % plus profit after investment .

 

[N2TAgent]

Ah, understood - man, that really opens my eyes. I suppose I knew the insurance industry was "cash rich", but that makes complete sense. It also really opens up my eyes to the fact that the IMO's I was talking to previously (the "MLM-type" companies) really seem to be sticking it to agents. I'm glad I'm following my gut. The fact that IMO's receive an override seems completely normal & makes complete sense, but having agents make only 25% - 30% of what it actually paid out as compensation and still not providing a ton of value in terms of training, etc... seems wrong on a couple different levels (I'm "pro" companies & people making money for sure, but I'm also "pro" fairness & common sense ). I really appreciate your candor guys. It's really helping me navigate my early days.

 

[Newby]

Ah, understood - man, that really opens my eyes. I suppose I knew the insurance industry was "cash rich", but that makes complete sense. It also really opens up my eyes to the fact that the IMO's I was talking to previously (the "MLM-type" companies) really seem to be sticking it to agents. I'm glad I'm following my gut. The fact that IMO's receive an override seems completely normal & makes complete sense, but having agents make only 25% - 30% of what it actually paid out as compensation and still not providing a ton of value in terms of training, etc... seems wrong on a couple different levels (I'm "pro" companies & people making money for sure, but I'm also "pro" fairness & common sense ). I really appreciate your candor guys. It's really helping me navigate my early days.

The people who are the easiest to find when you are new are the pyramid recruiters. They find you actually. They try to take advantage of you just like their upline took advantage of them. They are offering you low commissions because they signed up on low commissions and they actually believe that the only way to get to the 120% is to recruit, recruit, recruit. You can jump several commission tiers past what they have themselves just by contracting direct to the IMO/agency. Don't get caught up in that stuff.

 

[CALTCAgent]

Hi all, in an effort to make sure I'm asking the right questions of a potential IMO / FMO, are the following reasonable expectations? Please be blunt if they aren't and feel free to add any additional info:

1) Commission Split In writing and part of the signed agreement (between me and the IMO / FMO)

2) Vesting - Vesting agreement in writing and part of the signed agreement (between me and the IMO / FMO)

3) Release Policy in writing and part of the signed agreement (between me and the IMO / FMO) (basically, if nothing is owed to any carriers, I want an immediate release)

These are completely reasonable in my opinion. In reality you will have to fight hard to get these things which are just asking for full disclosure. Just getting the full commission schedule is one hurdle. Getting the release policy in writing is very challenging. If an IMO/FMO advertises right up front that they have an open release policy thats a good start. Still get it in writing. I have been told so many times that was the policy when speaking with a marketing rep but when I asked for it in writing, either I could not get it or what was in writing was not a true open release policy.

4) If I sign up with an IMO / FMO that has a focus on FE, for example, can I still sell other products of a given carrier? (For example, if I'm selling FE w/an IMO / FMO, but decide to buy some IUL or MP leads, would those products generally be available to me?)

Get the full commission schedule of the carrier. Don't let them just show you one type of life insurance in case they have others. Thats where they slide in a different schedule for the "other" products they sell. The IMO/FMO's that don't play games like this are the ones that are good to deal with!

 

[N2TAgent]

Thank you for the confirmation CALTCAgent - I appreciate the confirmation that I'm not crazy It really seems that, long term, it would be in the best interest of all parties (agent, IMO, & carriers) to just have everything up front & geared a little more "fairly". I can't help but wonder if the ambiguity, seemingly ridiculous comp structure, etc...contributes to the high attrition rate.

 

[CALTCAgent]

Thank you for the confirmation CALTCAgent - I appreciate the confirmation that I'm not crazy It really seems that, long term, it would be in the best interest of all parties (agent, IMO, & carriers) to just have everything up front & geared a little more "fairly". I can't help but wonder if the ambiguity, seemingly ridiculous comp structure, etc...contributes to the high attrition rate.

I have always felt the IMO/FMO structure would be better with open releases. Why would anybody leave a good situation. As it is now, it is in the favor of bad FMO's because they can misrepresent what they offer and we are locked in after we get appointed. I know the carrier argument is that there will be too much switching and administrative issues for the carrier.

 

[Todd King]

Hi all, in an effort to make sure I'm asking the right questions of a potential IMO / FMO, are the following reasonable expectations? Please be blunt if they aren't and feel free to add any additional info:

1) Commission Split In writing and part of the signed agreement (between me and the IMO / FMO)

2) Vesting - Vesting agreement in writing and part of the signed agreement (between me and the IMO / FMO)

3) Release Policy in writing and part of the signed agreement (between me and the IMO / FMO) (basically, if nothing is owed to any carriers, I want an immediate release)

4) If I sign up with an IMO / FMO that has a focus on FE, for example, can I still sell other products of a given carrier? (For example, if I'm selling FE w/an IMO / FMO, but decide to buy some IUL or MP leads, would those products generally be available to me?)

5) Misc Questions:

5-1) Can I opt to get paid "as earned" vs "advanced"? Is there a negative to this (other than getting a smaller initial check)?

5-2) Casework - Is the best resource for help on this the Carriers themselves? Seems like it would be.

5-3) How do IMO's / FMO's make money if they offer 100%+ splits? Nothing is free in this world

As always, thank you - I also thought these questions (and hopefully answers )may serve as a resource for those in my shoes.

These are great questions. If you want to see other questions to ask, go to https://www.trkingim.com/frequently-asked-questions/ and take a look at the list we've put together.

 

[titeye]

[QUOTE="Todd King, post: 1442709, member: 3501" If you want to see other questions to ask, go to https://www.trkingim.com/frequently-asked-questions/ and take a look at the list we've put together.[/QUOTE]
Well damn, TRKing!!!