This is a letter from American Equity showing how they are going to "weather the storm".
May 6, 2009
Dear Producers,
The financial experts are trying to predict whether the current financial market has reached bottom. Whether it has or not, the effects of this economic event will certainly be long-lasting. American Equity's senior management team has been together a minimum of 20 years and has weathered many storms already-this one is no different. It is important that we take this opportunity to examine our operating and pricing efficiency for continued long term growth and stability.
We feel very strongly that we need to position ourselves so that we can continue to accept your business without reducing commissions, reducing policyholder benefits, pulling popular products or implementing production caps. American Equity has mechanisms available to safely accept increased sales volume without jeopardizing our financial strength and ratings. One approach that offers significant benefits is to pay first year commissions over multiple years; something the health and life insurance industry have done for a long time. This gives American Equity additional sales capacity; and our producers an income stream over several years. With these benefits in mind, we are pleased to introduce American Equity's new commission structure effective June 1, 2009, as follows:
Most of our producers will receive 75% of the current commissions upon policy issue. Considering the time value of money, we will pay one-half of the remaining balance plus 5% interest in the 13th month; and the final balance plus 15% interest in the 25th month. Ultimately, you will receive more commissions over 25 months than the current schedule. We understand this program will mean adjustments for our producers; but felt the alternatives were unacceptable. We want to be your home for fixed annuities for a long time to come. A commission schedule with your exact commission percentages and other requirements and conditions will be mailed to you next week.
The current commission structure is applicable for all original applications received in our Home Office by the close of business on May 29, 2009. No faxes, please. Those of you who are participating in the Commission Increase Program via On-line Training will continue to receive your increase through June 30, 2009. The increase will be added to your commissions outlined under the new structure.
Fixed annuities and Lifetime Income Benefit Riders are striking a chord with consumers looking to safe money alternatives. The opportunity for our business has never been better.American Equity is prepared. Thank you very much for your business and support.
------------------------------------ Direct 1-866.417.9580 X 109 mail@ngfgllc.com
I'm not sure how I like this idea but it doesn't matter what I think as it's going to happen anyways besides they're my go to company? I love AE may Aviva burn in hell!!!!
It is my understanding that all producers will fall under the comp cut.
The marketing organization's will still get their money; which makes sense. AE realizes that the Marketing companies are going to be the driving force behind any business being channeled to AE, as it will lose its popularity to agents.
I think that AE has a good product; but another player here recently has stepped up to fill the void.
I expect more companies will adopt this in the near future. I suspect they have been getting too much premium because of all the agents that were kicked by Aviva. This probably put strain on them resulting in these changes. Equitust is also doing the same thing.
Like the recruiter said above there are still other options at least for now like RBC, Legacy, Allianz, Lincoln, OM... I am sure some of them will be announcing more changes soon though as they are probably all feeling some strain on getting too much business in this environment.
I expect more companies will adopt this in the near future. I suspect they have been getting too much premium because of all the agents that were kicked by Aviva. This probably put strain on them resulting in these changes. Equitust is also doing the same thing.
Like the recruiter said above there are still other options at least for now like RBC, Legacy, Allianz, Lincoln, OM... I am sure some of them will be announcing more changes soon though as they are probably all feeling some strain on getting too much business in this environment.
I apologize for sounding like a recruiter..........LOL.
I am actually one of the owners; if that makes a difference.
I apologize for sounding like a recruiter..........LOL.
I am actually one of the owners; if that makes a difference.
No problem at all. I am not saying it is good or bad or your job to be a recruiter theer are several on the forums who seek to recruit and it makes sense to do so.
It is just the nature of your comment seemed to be to recruit to RBC again not that, that is good or bad.
No problem at all. I am not saying it is good or bad or your job to be a recruiter theer are several on the forums who seek to recruit and it makes sense to do so.
It is just the nature of your comment seemed to be to recruit to RBC again not that, that is good or bad.
Well with that being said; if you would like an increase in your contracts let me know.
I haven't written with AE for some time but don't you love the way the wrap up this cutting of your commission. Great American/Annuity Investors have been lowering comp but instead of the delayed payment they have been adding a 10 basis point trail to the annuity which compares nicely to 12b-1 trails. I would still prefer my comp up front so I can do what I wish with it.
American Equity Comp
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