Hot Sports Opinion on FMO's/IMO's

[DFW]

First, let me start with a fact and not an opinion...I am an experienced agent and FMO's bring absolutely no value to my business whatsoever. It is infuriating to me that I am not able to get directly contracted with carriers to get maximum payout. Why should some jackass get an override on my business? So here is the opinion...carriers should allow any agent with 10+ years experience the ability to contract directly and start at max comp.

If you are an FMO/IMO please don't respond with the value added garbage you bring to the table...product knowledge, marketing, leads, trips...that is all BS for the experienced and knowledgable agent. You are nothing more than a commission leech and I for one am sick of your hands in my pockets.

This forum provides more value than any FMO that I have ever worked with and I don't have to pay an override to do quick and simple research. Case in point... I usually write Allianz, American Equity or Great American. I was looking for something new last week and found the Libertymark/Legendmark products here on the forums. After doing a little more research, I called Legacy to get appointed and they referred me to two FMO's in my area. I ended up contracting with an FMO that I already had unnecessary relationship with. I just dropped a ticket for $300k and it chaps my ass that the FMO will get an override on that business.

FMO's are a complete waste of money for most experienced agents. One should be able to opt out of working with them and contract directly with the carrier to receive max comp rates on your business.

What are your thoughts?

 

[The Gimp]

If you feel that your production warrants higher comp, shop around and find an outfit that will offer what you're looking for.

 

[DFW]

I want direct with the carrier from $1. I don't want to shop a bunch of whores to see who will give me the best deal.

 

[pcbinsurance]

For annuities specifically, I agree with you.

 

[The Gimp]

If we could have everything we want out of life I wouldn't be sitting on my ass in a wheelchair past 32 years. But since that's the way it is I make the best of it.

 

[WCMason]

First, let me start with a fact and not an opinion...I am an experienced agent and FMO's bring absolutely no value to my business whatsoever. It is infuriating to me that I am not able to get directly contracted with carriers to get maximum payout. Why should some jackass get an override on my business? So here is the opinion...carriers should allow any agent with 10+ years experience the ability to contract directly and start at max comp. If you are an FMO/IMO please don't respond with the value added garbage you bring to the table...product knowledge, marketing, leads, trips...that is all BS for the experienced and knowledgable agent. You are nothing more than a commission leach and I for one am sick of your hands in my pockets. This forum provides more value than any FMO that I have ever worked with and I don't have to pay an override to do quick and simple research. Case in point... I usually write Allianz, American Equity or Great American. I was looking for something new last week and found the Libertymark/Legendmark products here on the forums. After doing a little more research, I called Legacy to get appointed and they referred me to two FMO's in my area. I ended up contracting with an FMO that I already had unnecessary relationship with. I just dropped a ticket for $300k and it chaps my ass that the FMO will get an override on that business. FMO's are a complete waste of money for most experienced agents. One should be able to opt out of working with them and contract directly with the carrier to receive max comp rates on your business. What are your thoughts?

The first thought that came to mind when reading this post was from Stephen Covey's Seven Habits of Highly Effective People. He talks about the importance of focusing on one's circle of influence rather than their circle of concern. The shortened version is that spending energy on things that concern you but you have no control over is less productive than directing energy on things one can have some influence over changing. This system isn't likely to change.

This hierarchy set-up in the insurance business makes no sense to me. In addition to your good points, I don't understand why a carrier is willing to lose my business with them for six months if I change FMO and don't get released. Or why the FMO that won't release me is willing to lose the overrides on renewals when I respond by not only sitting out the six months, but move that previously written business I wrote while under them to a new carrier. The carrier loses, the FMO loses, and I just write another company with no losses. That I can influence.

Edit: I didn't notice when posting that I'm the annuities forum. I don't write annuities. I suspect moving to a new carrier is not as easily done as it is with the health products I do write.

 

[DFW]

The first thought that came to mind when reading this post was from Stephen Covey's Seven Habits of Highly Effective People. He talks about the importance of focusing on one's circle of influence rather than their circle of concern. The shortened version is that spending energy on things that concern you but you have no control over is less productive than directing energy on things one can have some influence over changing. This system isn't likely to change.

This hierarchy set-up in the insurance business makes no sense to me. In addition to your good points, I don't understand why a carrier is willing to lose my business with them for six months if I change FMO and don't get released. Or why the FMO that won't release me is willing to lose the overrides on renewals when I respond by not only sitting out the six months, but move that previously written business I wrote while under them to a new carrier. The carrier loses, the FMO loses, and I just write another company with no losses. That I can influence.

Great points and I agree. The system isn't changing but it sure makes me feel good to vent. When I write life insurance, I write Midland and Ohio National because I believe in their products and I value the way they let me contract...direct without an FMO. That I can influence.

 

[scagnt83]

Bottom line is that you need to shop IMOs and find one that will give you a cut of the overrides. But that will most likely mean consolidating the majority of your biz with that upline.

If you are selling Midland for life then why not annuities???? That does not make sense to me unless it is because of state approvals.

If you sell GA then why not go direct with AIL? Very similar products and similar income rider.


I once thought the same way you do. Still do to some extent, I like direct contracts. But what you are not realizing is that IMOs save the carrier money on overhead, payroll, admin, benefits, etc.

You see it as a cut on your comp. But in reality you would still be paid the same even with a direct contract. The cut the IMO gets would just go towards more staff and expenses at the carrier level.

Midland is direct, and has comparable comp to non-direct companies. Why?.. because they have to have twice the staff vs. a non-direct company. AIL is direct, but has comparable comp to all the others for the same reason.

One of your main carriers, Allianz, has higher comp than both Midland and AIL... so how do you explain that?

Also, you say you write Midland and ON on the life side. But they hardly have the highest comp for life products. You could sell NA and get a good 20% more just on street.... and most any IMO will give you a cut on overrides for NA, 110 is not unheard of at all. But my point is that the direct carriers often pay less than the ones who require you go through an IMO. You see it as taking a cut of your comp, but it really is not... its just a different means to the same end.

 

[DFW]

Bottom line is that you need to shop IMOs and find one that will give you a cut of the overrides. But that will most likely mean consolidating the majority of your biz with that upline.

If you are selling Midland for life then why not annuities???? That does not make sense to me unless it is because of state approvals. I think the Midland IUL is a superior product and the annuities are inferior.

If you sell GA then why not go direct with AIL? Very similar products and similar income rider. Thanks.... I need the look into AIL. My favorite FIA is the GA American Legend III.


I once thought the same way you do. Still do to some extent, I like direct contracts. But what you are not realizing is that IMOs save the carrier money on overhead, payroll, admin, benefits, etc. No...I realize the benefit to the carrier I just don't like the arrangement...LOL. Plus I think that argument is a little overweighted in the high tech world we live in. Its much easier to deliver all the above in a more efficient manner than it was in the 80's, 90's, and 2000's but the contracts are all still the same.

You see it as a cut on your comp. But in reality you would still be paid the same even with a direct contract. The cut the IMO gets would just go towards more staff and expenses at the carrier level. As stated above, I certainly see your point here and agree somewhat...however, for experienced agents...10 plus years...and I guess in the end I can only speak for myself, I don't need any hand holding or marketing advice. So, the home office would not need to add more folks for me. I just need to able to access the carriers website and get product information and apps. Which is pretty much what I do now and some jackass FMO gets an override.

Midland is direct, and has comparable comp to non-direct companies. Why?.. because they have to have twice the staff vs. a non-direct company. AIL is direct, but has comparable comp to all the others for the same reason. This is where I am wired wrong...Thats all fine with me. In fact, I would rather take a .25bps cut in commission and go direct than an FMO get an override from MY business and My clients.

One of your main carriers, Allianz, has higher comp than both Midland and AIL... so how do you explain that? I am assuming you are talking about IUL's and I would say the reason I do Midland is because it is IMO a superior product to Allianz IUL. The reason Allianz can pay more commission on this product is because the consumer is taking it in the shorts.

Also, you say you write Midland and ON on the life side. But they hardly have the highest comp for life products. You could sell NA and get a good 20bps more just on street.... and most any IMO will give you a cut on overrides for NA, 110 is not unheard of at all. But my point is that the direct carriers often pay less than the ones who require you go through an IMO. You see it as taking a cut of your comp, but it really is not... its just a different means to the same end.

It really depends what level you are at so not sure I can agree with you on this statement. I agree you could split hairs on Life Insurance but with Annuities I think its black and white. On American Equity or Great American...I would certainly like to cut out my FMO and get FULL comp.

 

[scagnt83]

Midland has a great IUL, it is my favorite (along with NA since its basically the same product).

But I cant agree that the annuities are inferior. Over the summer they dropped rates/caps/spreads/payouts/etc. So maybe at the moment they are not as competitive.... but over the past few years no way that I can agree with that... they have had some of the highest caps and highest Rider payouts in the industry.
Currently their SPIA has the highest payout in many situations from a case I ran recently. They are one of the few carriers that has 20% free withdrawals products. They also used to have a very strong income rider that rivaled Allianz and even beat them depending on the state you were in.


I love the Legend 3. I also like the Safe Return. AIL specializes in 403Bs. But they allow their products to be sold in IRAs too. They do not have a "look alike" product for the Legend 3, but they have similar Caps. And the Rider is a 10% simple just like GALIC, but they do not offer the other two Rider options. So the products are a bit more "bare bones" vs. GA.



The problem is that you are not the only agent the carrier deals with. I have known 10 year+ agents who still needed hand holding or help on keeping up with changes in products, etc. And the newer agents certainly do.
I know some experienced agents who like the IMO setup because with the volume of cases they do it saves them money on admin staff in their office and lets them concentrate on selling. The needs and situations of agents are so diverse that you cant make sweeping generalizations unfortunately.



I agree that you are wired wrong!!! LOL (just kidding with you).
But seriously how does what you stated make sense?? If you get 25bps less going direct, and 25bps more with an IMO, then how would the IMO be taking a cut of your comp?? In that situation the carrier is taking a cut of your comp due to increased overhead.... jmo




I was not talking about IULs with the Allianz comment, Im talking about Annuities.
Allianz pay around 7% without a trail option.
Midland pays on average around 6%.
AIL pays on average around 5%ish.
Another direct carrier is ING and they pay around 5%-6% with their direct contract.

And Allianz's new IUL looks a lot better than their old products. (I still like Midland/NA better along with LFG)



You say it depends on what level you are at with LI, and it does with ONs expense reimbursement. But Midland (with IUL) pays more in long run, NA pays more upfront. Which is better often depends on the size of the case. The products are basically identical.


Annuity or Life Insurance it really doesnt matter. Non-Direct companies (generally speaking) pay a higher comp to agents. The upline structure is the reason why.