To Vest or Not to Vest

[salgal5555]

I'm taking my book of business to a new Agency. In our discussions he wants to be 50/50 vested with me on only my Book after 1 year. His reasoning is he is risking his resources and taking me into his agency as an employee among other things. He had originally said after 24 months.

He said the sooner we are 50/50 vested in each other the better it will be.
It sounds like the better it will be for him!

I'm not sure what to do. It seems like the commission he is making from my Book should be good enough.

How is this a good deal for me? or is there advantages I don't know about?
It seems like if he wants 50% of my Book, he should buy it.

Do I need to see an insurance lawyer?
Please help me, I don't know much about this. Thanks.

 

[djs]

It shouldn't cost you to get a job. You could sell your book and make a tidy profit, why would you 'give it' to him for the opportunity to work there?

Now, I assume he is providing some resources for you to maintain your book, so there is some value in him getting a commission split, but I would ask him to explain why its better to be 50/50 vested at any point, much less soon. You are vesting him, he is not vesting you.

Dan

 

[goillini52]

I'm taking my book of business to a new Agency. In our discussions he wants to be 50/50 vested with me on only my Book after 1 year. His reasoning is he is risking his resources and taking me into his agency as an employee among other things. He had originally said after 24 months.

He said the sooner we are 50/50 vested in each other the better it will be.
It sounds like the better it will be for him!

I'm not sure what to do. It seems like the commission he is making from my Book should be good enough.

How is this a good deal for me? or is there advantages I don't know about?
It seems like if he wants 50% of my Book, he should buy it.

Do I need to see an insurance lawyer?
Please help me, I don't know much about this. Thanks.

Why are you doing it?

 

[salgal5555]

Thanks for the replies.
The reason I'm looking to partner with another Agency, is because I didn't want to start my own agency.
Does this sound like a good deal?
My book - split 60/40 with me servicing Yr. 1 & working renewals in year 2.
Agency leads will be split at 50/50 - with Agency staff renewing & servicing.
It would be commission only, no draw. I can choose to be W2 or 1099.
Is it better to be a W2 employee?

When I asked him why he wanted to be vested, he said.. In case you leave to start your own Agency, then his support will have some value, and I would have to buy his half out. (buy his 50% of MY BOOK????)
Something is wrong!!!

Of course any of the new Agency business, would not be Vested at all.
Please help with whatever your thoughts are, you don't know how much I appreciate your feedback.

 

[djs]

His support does have value, but that doesn't mean he needs to vest in your existing book. An override (split commission) I can understand, but ownership status is an entirely different animal.

In my opinion, he is taking advantage of the situation by wanting you to vest him at virtually no cost to him. I might be missing something here that makes it worthwhile, but I'm not seeing it.

Other option is to make it a 5 year vesting and then quit in 4 1/2 years so it doesn't vest at all.

Dan

 

[LostDollar]

I'm taking my book of business to a new Agency. In our discussions he wants to be 50/50 vested with me on only my Book after 1 year. His reasoning is he is risking his resources and taking me into his agency as an employee among other things. He had originally said after 24 months.

He said the sooner we are 50/50 vested in each other the better it will be.
It sounds like the better it will be for him!

I'm not sure what to do. It seems like the commission he is making from my Book should be good enough.

How is this a good deal for me? or is there advantages I don't know about?
It seems like if he wants 50% of my Book, he should buy it.

Do I need to see an insurance lawyer?
Please help me, I don't know much about this. Thanks.

Tell him you want to be 50% vested in his book, up to the equivalent value of your book, in exchange. A 3-5 year "trial" period in which either of you can terminate the arrangement and you each get your own books back. If he terminates the arrangement, you also get 25% of the new business you have brought in.

If you are a good producer, negotiate from the perspective of-- "would you rather have me working with you for business in this community or working on my own and taking the business away from you?"

 

[salgal5555]

Thank you all for your very informative feedback.

I like the response from Lost Dollar:
Tell him you want to be 50% vested in his book, up to the equivalent value of your book, in exchange. A 3-5 year "trial" period in which either of you can terminate the arrangement and you each get your own books back. If he terminates the arrangement, you also get 25% of the new business you have brought in.


How would I get 25% of the new business I brought in? I'm not getting it?

 

[goillini52]

Thank you all for your very informative feedback.

I like the response from Lost Dollar:
Tell him you want to be 50% vested in his book, up to the equivalent value of your book, in exchange. A 3-5 year "trial" period in which either of you can terminate the arrangement and you each get your own books back. If he terminates the arrangement, you also get 25% of the new business you have brought in.


How would I get 25% of the new business I brought in? I'm not getting it?

If you don't get it......what is it that you like about LD's response?