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It won't work unless the "FMO/IMO" pays the agents. Why you ask? Because some person has to be the top person. Meaning, you can't go and get a 26% contract and put everyone at 26%. First off, all those agents would have to qualify for those levels (which isn't going to happen), so the only way around that is to have all of the contracts/commissions assigned to the top person. Yes, there has to be a person that is the principle of the agency. That top person would have to be responsible for paying the agents.
On top of all of this, who's business would it be? The writing agent? Nope. It's the top person. If the top person ever wanted to be nasty about it they could just cancel your contracts and take all of your business away and there would be nothing you could do about it.
Keep in mind though, you have to qualify (proof of production) to get the levels above street anyway. If your contracts were through us for instance, you would be on the highest level you could qualify for and still be paid direct from the company. What more could you possibly ask for?
Thank you Todd, Newby & others who have responded. Yeah, I guess this info that you provided does make it seem like it would be a difficult task.
You ask, what more could you ask for? Well, for one, and I mean no disrespect to you as an FMO, but personally I have never asked for or received any added value from my FMOs other than a quote engine...which obviously can be obtained independently.
Now I know there are agents, and probably plenty that you and Newby have under your umbrella, where there is training and hand holding involved where you rightfully earn your override. But personally, it irks me that I'm giving up a piece of my pie, for no perceived value. But again, I don't want or need anything from my FMO. I would of course prefer to be able to go direct and get the top contract available.
The second thing that doesn't sit well would be the inability for agents to get a straight answer as to the production requirements to get commission bumps. I have two FMOs and when questioned about this, the answers I received were differing as to the requirements when I was asking about the same insurance carriers.
But, alas, it is what it is and I appreciate the response.
How many med supp carriers to you have Todd? Isn't your ability to offer top contracts to agents contingent on you as an FMO having enough total production with a particular carrier to even be able to make it profitable for yourself?
Put another way, lets say Aetna had a top FMO payout of 27% and "ABC HUMONGOUS FMO" hap a trillion reps contracting with them and writing Aetna business. They could give their top agents 25% and still make a profit.
Whereas if "XYZ tiny FMO" has many fewer reps writing Aetna, maybe their FMO contract pays them 25% making their top agents cap out at a smaller percentage, say 23/24%, so the FMO can still make money. Is this be accurate and wouldn't it then behoove agents to make sure their FMO has the scale to be able to offer the largest upside upon their success?