New Agency that is expanding needing some advice

[elder]

Okay, so why would an agent sign up with you then? If you don't offer a guarantee salary, what do you offer the agent to come aboard to only take such a haircut on all business including no vesting interest in their production?

Many, hell most agents don't have the cash to start a full blown agency, or the gonads. It is a place to start. But they cannot expect to take the business with them unless it is offered in the contract.

 

[tkirk97]

James,
I number one the P&C contracts I have no new agent would ever be able to get. Number 2, a big haircut, not really, how much do you think it takes to staff a PC agency, do the math

Avg. Premium 1500 per household where i am from. total comp=$225, Agent gets $112.5. On PC commissions. That agent has to right alot of premium just to cover the cost to have him in the office, avg cost for me to have an agent in house is $800, that doesn't include staffing. The agent has no out of pocket expense.

Also, if that agent went captive he would recieve the same comp. and would pay all expenses out of pocket.

An agency taking a 25% overide on Life & Health business is pretty standard and that is what really helps subsidize the agency.

James, I would never hire you, your the type that never sees any value only the commissions. I've had reps like this before and they have left and come back because they couldn't make it on thier own, and they were making more money "net" at these commission levels.

 

[tkirk97]

James,.

Read previous posts. All life business is typically vested for the agent after the vesting period with life companies, The life & Health companies pay the agents direct. The commissions on life & Health are not assigned to our agency but rather to the agent. The only commissions that are not assigned to the agent are Group Health and Property & Casualty.

If the agent leaves he would take his life/health book with him and would have a no compete on the PC and Group health.

 

[djs]

Not if the sub agents are paid an advance commissions. Then they cannot touch any business that was written on advance until advance date is passed. I will sue any agent that rolls and advanced commission client.

I think that's what I said. Non compete means they cannot market to your existing clients. I don't care if it was advanced or not, they are my clients, with priviledged information given to me as an agent.

It would be almost impossible to enforce a non-compete that prevents them from marketing the same geographical area. I think the 2 county statement is an attempt to make it 'reasonable', but my guess is it wouldn't survive a serious challenge, unless it's for a very short timeframe, such as 6 months or less (even then it would be iffy).

Dan

 

[tkirk97]

Claification, non-compete is only for existing clients, meaing that the agent cannot market to any of his existing clients in that region, anyone outside of that region is fair game. The agent can also prospect new clients.