Residuals

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cbarrera5428

New Member
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Hi, I have been working for my employer for almost 4 years. He is a financial advisor contracted with Allstate. There are 4 of us on his team and we can only sell products within Allstate. When I joined his team, we discussed a pay of 80% commission on policies written, then as I write more he will increase my commission. Fast forward 3 1/2 years later, I have been looking into leaving as I was made so many broken promises and am not making the money I was told I would. The more research I've done I realized he is taking a lot of my upfront commissions and all of my residuals. I was a brand new agent and didn't even know what residuals are and that part of compensation was never discussed. When I asked him about he said, he keeps them as he has a lot of overhead. I spoke with someone from corporate and they said their agreement is they just pay him for any commissions/residuals on policies his agents have written, and he pays us what we agreed upon between us. Well, residuals was never discussed and when I ask for a copy of my offer letter on what he agreed to pay me per case, he says I never signed one. I know I signed some stuff when I started but it's been so long ago, I can't find anything. Is he allowed to not pay me my residuals and keep them?
 
If your employer owns the book of business and you are only a solicitor then he can keep it all if he wants unless you have a written agreement.

Many first time agents are taken advantage this way. Many insurance agencies are not ethical but many are. without knowing all the details, you have a decision to make either continue working there or get a new written agreement. but must tell you if he was giving you 80% upfront that may be a trade-off from what he gets on the back end.
 
cbarrera5428 said:
Hi, I have been working for my employer for almost 4 years. He is a financial advisor contracted with Allstate. There are 4 of us on his team and we can only sell products within Allstate. When I joined his team, we discussed a pay of 80% commission on policies written, then as I write more he will increase my commission. Fast forward 3 1/2 years later, I have been looking into leaving as I was made so many broken promises and am not making the money I was told I would. The more research I've done I realized he is taking a lot of my upfront commissions and all of my residuals. I was a brand new agent and didn't even know what residuals are and that part of compensation was never discussed. When I asked him about he said, he keeps them as he has a lot of overhead. I spoke with someone from corporate and they said their agreement is they just pay him for any commissions/residuals on policies his agents have written, and he pays us what we agreed upon between us. Well, residuals was never discussed and when I ask for a copy of my offer letter on what he agreed to pay me per case, he says I never signed one. I know I signed some stuff when I started but it's been so long ago, I can't find anything. Is he allowed to not pay me my residuals and keep them?
Click to expand...
You need to research what is standard or usual. You aren't giving enough detail. 80% of what? Annual premium? His base commission? What? Do you get any pay or perks other than commission? Sounds like you may have office space. That is a perk if so. Do you generate your own leads? Supplied leads? Are you selling whole-life? Term? UL?

The best way to know if you are getting a good deal or a raw deal on anything is to shop and compare. Have you looked at other agencies and found out what they pay 1st year and renewals? That is the way you educate yourself.
 
80% of what?
Premium, his comp, net after expenses?

My first gig after leaving John Hancock back in the Cretaceous era was the life specialist for three All State agents. Similar story. But only one year. I made a Hawaii convention for all three plus bonuses. I got a weekend for two at some mud baths and $50 for gas.

Tuition.

Time to take your lessons learned and move on.

He doesn't owe more than you agreed to. However, you don't have a copy. It is his business, his book and his money. Probably what you signed was a non complete or disclosure.

There is no future working for an advisor. Take your lessons and build your own business or work for an insurance company.

I am greatful for my lessons. Scars and all.

Good luck to you.
 
Packerland said:
If your employer owns the book of business and you are only a solicitor then he can keep it all if he wants unless you have a written agreement.

Many first time agents are taken advantage this way. Many insurance agencies are not ethical but many are. without knowing all the details, you have a decision to make either continue working there or get a new written agreement. but must tell you if he was giving you 80% upfront that may be a trade-off from what he gets on the back end.
Click to expand...
I am not sure if he owns the book of business, that I'd have to find out. I do source my own clients as well. I feel I should at least be able to keep those renewals. I know that I signed a non compete, but as an independent contractor I should have an independent contractor agreement signed, correct? I was so green and so naive to even do any research. Everything was pretty much verbal. Had no clue about renewals and what they were. That part of the compensation was never brought up.
 
WinoBlues said:
80% of what?
Premium, his comp, net after expenses?

My first gig after leaving John Hancock back in the Cretaceous era was the life specialist for three All State agents. Similar story. But only one year. I made a Hawaii convention for all three plus bonuses. I got a weekend for two at some mud baths and $50 for gas.

Tuition.

Time to take your lessons learned and move on.

He doesn't owe more than you agreed to. However, you don't have a copy. It is his business, his book and his money. Probably what you signed was a non complete or disclosure.

There is no future working for an advisor. Take your lessons and build your own business or work for an insurance company.

I am grateful for my lessons. Scars and all.

Good luck to you.
Click to expand...
80% of the annual premium. Allstate pays my boss 63% of the AP and then he gives me 80% of that. We get no benefits, no other perks or compensation.
 
80% of $1,000AP

$1,000 x 80% = $800.
Or
$1,000 x 63% = $630 x 80% = $504.

You are not getting 80% of AP
Not saying your deal is good or bad. Just that 80% of AP does not math out.

*63% sounds pretty low.
 
cbarrera5428 said:
I am not sure if he owns the book of business, that I'd have to find out. I do source my own clients as well. I feel I should at least be able to keep those renewals. I know that I signed a non compete, but as an independent contractor I should have an independent contractor agreement signed, correct? I was so green and so naive to even do any research. Everything was pretty much verbal. Had no clue about renewals and what they were. That part of the compensation was never brought up.
Click to expand...
I still don't understand how agencies get away with calling what you described an "independent contractor".

It sure sounds like you're an employee.
 
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