Commission Reductions for ACA ?

[kgmom219]

FMO's are another story... worthless as teets on a boar hog...... they need to be eliminated

You're obsessed with boar hogs....

 

[MSCFINANCIAL]

I have a great advance and high comp with UHC and Assurant both. Im located in Flroida.

Have there been Commission reductions recently for Assurant and UHC? That is what my MGA told me unless they are trying to get an extra point out of me saying that Assurant has just recently dropped their commissions by a point.

Also saying that UHC Golden Rule just came recently out with their commissions for 2015 and is paying different commissions in different states with states like PA and TX paying the worse commissions 3-4 points less than states like florida.

Just have very little trust dealing with under 65 health insurance MGAs vs FMOs in Medicare which is the business i am coming from. they are more straight up . Any commissions changes always come from the carriers not the MGA or FMO.

Is Golden Rule paying an advance?

Any thoughts

 

[YouGotMyMoney]

Cash advances after year 3 in the biz is just silly. If your book isn't there, its time to move on.

if your getting an interest free loan, your advice is not to take it?

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From what I've read, the Advance Commissions are being paid out of the Field Marketing Organization's (FMO) business account. They (the FMO) still are paid month to month by the carriers. Agents who have a lapse rate over X% are either put on Earned Commission, or terminated.
ac

How would the FMO stay afloat if they are paying out advanced but receiving as earned? Dont make sense, they are advanced .....esp on ind health, margins are so thin now, most agencies could never afford that.

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you have several of these in #1 and now new client calls in march for sep you the agent know you owe xyz carrier 2500$ in charge backs even though you know in your heart xyz is the correct choice you sell abc company to at least get paid something

I have been in the biz 22 years and have a large book and KGB mom is correct and smoraco too... you still need advances go find a new job. The cash flow comment is just crazy thinking in an ObamaCare era.....

I say any agent taking advances in an ObamaCare era... 22 years or 2 months.... your placing your neck in the chopping block

I didn't know this was a convo about the need for advances, if you need an advance, you most likely SOL, but it seems like you and Bob and some others, don't get the concept.

If your's or anybody else's book is sooo big ( not a dig at all) , then I would assume you would qualify for advances direct? I wrote 700 health apps since Feb this year, if I would of had to go as earned on all of those, I never would of hit that number .

The last month of OEP, I wrote about 160 apps x $100 COA, was about $16k in leads, now if I would of been on as earned I would of gotten an as earned check for about $5k 30-90 days later vs a check for $43k....which would you rather have?

doesn't matter how many clients you currently have, that's just bad business sense not to take a free loan on money owed to you.

 

[taterpeeler]

your boys just keep taking advances.... however mark this down, on Oct 22 at 5PM you were told.... when they blow up we will all laugh at you.....

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BTW, I wrote 87 in one week during AEP If we are comparing sizes to your 160 in a month

and in my view its just bad business to take advances on such a fickle product.

I wrote 500 during AEP and those on here know it.... I call BS on 700....unless you have help, other agents doing it for you or some other type of support

 

[kgmom219]

if your getting an interest free loan, your advice is not to take it?

I didn't know this was a convo about the need for advances, if you need an advance, you most likely SOL, but it seems like you and Bob and some others, don't get the concept.

If your's or anybody else's book is sooo big ( not a dig at all) , then I would assume you would qualify for advances direct? I wrote 700 health apps since Feb this year, if I would of had to go as earned on all of those, I never would of hit that number .

The last month of OEP, I wrote about 160 apps x $100 COA, was about $16k in leads, now if I would of been on as earned I would of gotten an as earned check for about $5k 30-90 days later vs a check for $43k....which would you rather have?

doesn't matter how many clients you currently have, that's just bad business sense not to take a free loan on money owed to you.

To each its own. 12 years later, I believe advances are the devil. If you can't go as earned after 3 years, your book isn't big enough and its time to get a boss and paycheck. After 3 years, your COA should be negligible with referrals and networking.

I hear what you are saying about starting off, but that's my 3 year point.

And you obviously haven't been hit with massive chargebacks.

I will say this, I have NEVER had an agent with more than 5 years in business disagree with me on this. Successful agents are out of the advance business by year 3.

 

[AllenChicago]

your boys just keep taking advances.... however mark this down, on Oct 22 at 5PM you were told.... when they blow up we will all laugh at you.....

My Mother-In-Law tells everyone to get their act together because God will end this world. She'll be proven right..eventually...just like you Tater.

IMO, it's smart get as much money as you can from an insurer, or anyone else who will pay you in advance. If they pay 6/9/12 months of commissions based on premiums that haven't been paid yet...TAKE IT, because the world (or your world!) may end tomorrow.

 

[YouGotMyMoney]

I will say this, I have NEVER had an agent with more than 5 years in business disagree with me on this. Successful agents are out of the advance business by year 3.

I think this is down to we have different kinds of agents as associates/colleagues (large volume vs small volume), my friends who sell insurance are all health agents, with over 8 years experience and $60 million + in issued health insurance premium, from about 6 guys or so, the only guys I know who fail and are taking advances are the ones who stop investing back into their career, like buying a new bmw/whateva lease instead of putting that back into leads or hiring an assistant or sub-agents. Then the next year they can buy whatever car they could dream of.

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BTW, I wrote 87 in one week during AEP If we are comparing sizes to your 160 in a month

and in my view its just bad business to take advances on such a fickle product.

I wrote 500 during AEP and those on here know it.... I call BS on 700....unless you have help, other agents doing it for you or some other type of support

just so u know i didnt bring the # of apps up to compare d)#%$ size, if anyone think awesome - great ,or crappy - thats ok too, your only competition is yourself anyway. I only bring it up to illustrate large volume (for a single agent) takes cash flow.

 

[somarco]

If your selling correctly there wont be any charge-backs especially if your selling on exchange and target people who are getting basically free health insurance because of the subsidy

What color is the sky in your world?

smoraco

s o m a r c o

so-mar-co

You're obsessed with boar hogs....

No, he's obsessed with teets

 

[Yagents]

I can vouch for YGMM's production. Advances have their place in this biz. Either needed to start off in biz, or to replenish the large COA accompanied with large production. Anybody could do 700 apps if doing live lead transfers all day long at $500 a day. I prefer my model of doing 400 with $0 COA and no advances. I like a steady monthly check.

 

[Ann H]

I don't like advances. Most people who take them don't understand them and/or don't understand money management.

There are rare cases, where the commission rate is the same for advanced as it is for as-earned, and where the person understands how to set aside the advance into an account from which they draw their own "as-earned" commission to live off of. However, those cases are few and far between.

Normally, you get a deal like this:
8% commission as earned
6% commission advanced for 6 months or so

So, the person says that's a 2% loan. It's not. It's a 25% loan. Here's the math: 8 x .25 = 2. So, when you let them cut your commission down 2 points from 8 to 6, you lost 25%.

Worse yet, it's not really 25%, it's 50% when you look it as a "loan", and think of it as APR (Annual Percentage Rate). Why? You got the advance for only 6 months, but you got 2 points less commission for the whole year. That would be like taking out a loan for 6 months but paying interest for a year.

And the longer your client keeps the policy, the more that lower commission really hurts.

Those are the games being played by firms offering advances. Usually the new agent takes it, having no understanding of the real loss of money, nor understanding of chargebacks. That new agent is being burned for their natural market anyway, and when they quit, they owe a lot of money back.

But there are some times when an agent can get a contract with the same commission rate for advanced as they do for as-earned, and they also understand chargebacks and money management. In that case, advances may be okay, but I am like KGMom & TaterPeeler in saying it's not really necessary if you have a book of business, with persistency and referrals.

The last pitfall is the "churn and burn" scenario. You take advances, and then you must plug them back into buying more leads, from which you get more advances, and need more leads..... That is because the persistency rate is low on a call-center model of business, and there are not many natural referrals.

Some people love the call center model of business. That's fine. It fits their personality and their goals. But you can't stop. Because if you don't buy more leads and make more sales, the low persistency will drop a hole in the bottom of the revenue stream, and you can't handle the chargebacks or keep operating.

Another model (the one I have chosen for 34 years) is the agency model with long-term relationships. Persistency is very high. Advertising? Zilch. This model is rich with referrals and doesn't depend on leads or "churn and burn". Also, you can stop anytime you want, cease new-business sales for a while and just renew & service, and then start-up new sales again.

My model isn't better than the other guy's model. It's just a choice of one model or the other. But with this choice you don't need constant leads, and don't need advances.

Often, if advances are even offered, I look critically at the product and the marketer. That is because marketers who offer advances usually are looking for newbie agents who will write their own natural market, then fail, and leave the book of business with the upline. Those marketers are also well known for creating products that wouldn't be sold by experienced agents anyway. Not always, but often.

Again, I must reiterate, that sometimes you can find a contract with the same commission for advanced as for as-earned, with a sound product. If that is accepted by an agent who knows how to manage the money in expectation of chargebacks, and doesn't need to sow it back into more leads to keep the hamster running on the wheel, then it's fine. But 90% of advance commission situations are the opposite, and new agents as well as the uninformed get burned often by it.