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Old 05-23-2017, 09:34 PM   #1
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State: sdinsure4life is an Insurance Agent from Undisclosed Location
What Would You Do in This Scenario? What Would You Do in This Scenario?
Scenario: Another health agent (A good friend for many years) asks you to make a presentation to a 50-person group that she has already initially contacted, made the first appointment and met with alone to discuss becoming their agent for all group products.

She feels that you are better-qualified with group products knowledge-wise at that time and she also wants to make sure that the group is not lost. You agree to go with her to the second appointment.

After this appointment, you make such a great impression on the HR Director and Accounting Manager that in a subsequent meeting, they request you to be the Agent of Record on all future business.

When you tell the originating agent about the group's request, she is reluctant to go along since she has never given up control of a group she has originated. But she finally gives her consent as long as she will be paid commission regardless of not being the AOR. You assure her that this will happen. She relents only because she trusts you implicitly.

Since she owes you some money from a previous loan to her, you suggest that a 60/40 split be enacted until the loan is repaid, then the split will go to 50/50. The loan is repaid in full within 6 months, but the change to 50/50 never occurs.

Through your joint work, the case moves forward to generate a very good living in commissions earned, which you receive and then cut a monthly commission check for her portion to your friend. You handle the day-to-day management of the group and you request that she (The originating agent) help you from time to time upon demand, which she does without fail.

There is a rather odd caveat which you have insisted on from the beginning - that is, the agent is required to work a number of hours every month to EARN her commission.

At the end of the first year, you feel that you are doing more work on the case, but then again, you are still getting an additional 10% commission for your troubles. And the commission will be increasing because premiums rise on the anniversary date of every year. The agent has followed through with every request you have made to help you without reservation. You have never shown any dissatisfaction (Either in writing or verbally) to the originating agent.

Keep in mind that even most ancillary carriers (AFLAC, Colonial, Combined, etc.) pay 50% commission indefinitely to the independent agent/agency for allowing them access to their groups - and the ancillary agent does ALL of the work! In addition, you would have never made one penny of the nice commission income you now enjoy if this agent had not captured the case in the beginning.

Q. What would you do?
A. Stop paying the agent any commission in the future because you want the entire commission for yourself;
B. Lower the agent's commission to 25% from 40%;
C. Pay a ridiculously low amount of say, $125.00 per month, for the next two years and then stop paying commissions altogether, or
D. Continue to pay the agent the 60/40 agreement and ask her to continue helping as necessary, thereby retaining a friend.

Thank you for your input - I'm sure that it will be interesting.
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Old 05-24-2017, 07:22 AM   #2
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What Would You Do in This Scenario? Re: What Would You Do in This Scenario?
Interesting Thread.
  • How many hours are required to keep this group?
  • What exactly do you do to keep the group?
  • What exactly is she supposed to do on her end?

How much do you value this friendship?
Are you willing to burn bridges?

.
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Old 05-24-2017, 07:58 AM   #3
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rousemark on What Would You Do in This Scenario?
 
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What Would You Do in This Scenario? Re: What Would You Do in This Scenario?
Originally Posted by sdinsure4life View Post
Scenario: Another health agent (A good friend for many years) asks you to make a presentation to a 50-person group that she has already initially contacted, made the first appointment and met with alone to discuss becoming their agent for all group products.

She feels that you are better-qualified with group products knowledge-wise at that time and she also wants to make sure that the group is not lost. You agree to go with her to the second appointment.

After this appointment, you make such a great impression on the HR Director and Accounting Manager that in a subsequent meeting, they request you to be the Agent of Record on all future business.

When you tell the originating agent about the group's request, she is reluctant to go along since she has never given up control of a group she has originated. But she finally gives her consent as long as she will be paid commission regardless of not being the AOR. You assure her that this will happen. She relents only because she trusts you implicitly.

Since she owes you some money from a previous loan to her, you suggest that a 60/40 split be enacted until the loan is repaid, then the split will go to 50/50. The loan is repaid in full within 6 months, but the change to 50/50 never occurs.

Through your joint work, the case moves forward to generate a very good living in commissions earned, which you receive and then cut a monthly commission check for her portion to your friend. You handle the day-to-day management of the group and you request that she (The originating agent) help you from time to time upon demand, which she does without fail.

There is a rather odd caveat which you have insisted on from the beginning - that is, the agent is required to work a number of hours every month to EARN her commission.

At the end of the first year, you feel that you are doing more work on the case, but then again, you are still getting an additional 10% commission for your troubles. And the commission will be increasing because premiums rise on the anniversary date of every year. The agent has followed through with every request you have made to help you without reservation. You have never shown any dissatisfaction (Either in writing or verbally) to the originating agent.

Keep in mind that even most ancillary carriers (AFLAC, Colonial, Combined, etc.) pay 50% commission indefinitely to the independent agent/agency for allowing them access to their groups - and the ancillary agent does ALL of the work! In addition, you would have never made one penny of the nice commission income you now enjoy if this agent had not captured the case in the beginning.

Q. What would you do?
A. Stop paying the agent any commission in the future because you want the entire commission for yourself;
B. Lower the agent's commission to 25% from 40%;
C. Pay a ridiculously low amount of say, $125.00 per month, for the next two years and then stop paying commissions altogether, or
D. Continue to pay the agent the 60/40 agreement and ask her to continue helping as necessary, thereby retaining a friend.

Thank you for your input - I'm sure that it will be interesting.
None pf the above... If the loan has been repaid, I would change the split to 50/50 as agreed. I would keep by word and let the other agent worry about keeping theirs which it sounds like they are willing to do when called upon. You will sleep much better that way.

----------

Originally Posted by sdinsure4life View Post
Scenario: Another health agent (A good friend for many years) asks you to make a presentation to a 50-person group that she has already initially contacted, made the first appointment and met with alone to discuss becoming their agent for all group products.

She feels that you are better-qualified with group products knowledge-wise at that time and she also wants to make sure that the group is not lost. You agree to go with her to the second appointment.

After this appointment, you make such a great impression on the HR Director and Accounting Manager that in a subsequent meeting, they request you to be the Agent of Record on all future business.

When you tell the originating agent about the group's request, she is reluctant to go along since she has never given up control of a group she has originated. But she finally gives her consent as long as she will be paid commission regardless of not being the AOR. You assure her that this will happen. She relents only because she trusts you implicitly.

Since she owes you some money from a previous loan to her, you suggest that a 60/40 split be enacted until the loan is repaid, then the split will go to 50/50. The loan is repaid in full within 6 months, but the change to 50/50 never occurs.

Through your joint work, the case moves forward to generate a very good living in commissions earned, which you receive and then cut a monthly commission check for her portion to your friend. You handle the day-to-day management of the group and you request that she (The originating agent) help you from time to time upon demand, which she does without fail.

There is a rather odd caveat which you have insisted on from the beginning - that is, the agent is required to work a number of hours every month to EARN her commission.

At the end of the first year, you feel that you are doing more work on the case, but then again, you are still getting an additional 10% commission for your troubles. And the commission will be increasing because premiums rise on the anniversary date of every year. The agent has followed through with every request you have made to help you without reservation. You have never shown any dissatisfaction (Either in writing or verbally) to the originating agent.

Keep in mind that even most ancillary carriers (AFLAC, Colonial, Combined, etc.) pay 50% commission indefinitely to the independent agent/agency for allowing them access to their groups - and the ancillary agent does ALL of the work! In addition, you would have never made one penny of the nice commission income you now enjoy if this agent had not captured the case in the beginning.

Q. What would you do?
A. Stop paying the agent any commission in the future because you want the entire commission for yourself;
B. Lower the agent's commission to 25% from 40%;
C. Pay a ridiculously low amount of say, $125.00 per month, for the next two years and then stop paying commissions altogether, or
D. Continue to pay the agent the 60/40 agreement and ask her to continue helping as necessary, thereby retaining a friend.

Thank you for your input - I'm sure that it will be interesting.
None pf the above... If the loan has been repaid, I would change the split to 50/50 as agreed. I would keep by word and let the other agent worry about keeping theirs which it sounds like she is willing to do when called upon. You will sleep much better that way.

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Old 05-24-2017, 08:00 AM   #4
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What Would You Do in This Scenario? Re: What Would You Do in This Scenario?
They deserve at least a 20% cut no matter what.

Prospecting is the hardest part. How many hours of cold calling would it take to land another group this size? It could take over 12 months to actually get a prospect to the table for a quote after initial contact.


MDRT breaks down commission splits as:
20% Prospecting
20% Data Gathering
20% Case Design
20% Closing the Sale
20% Post-Sale Service Work

But that is focused more towards life insurance. I would say that on a group plan, service work should get 40%, if not 50%.

If you are not satisfied with their work, then say something to them. Address the issue and give them a chance to correct the situation. If they are not well versed in groups, then it is likely they might not know what to do or how to do it. Perhaps you need to guide them a bit and take the lead in giving them tasks to complete.


- Taking away their comp without warning is just wrong. Address the issue and show them what needs to be done. Then give them a chance to correct the issue.

- This is a very messy situation. I never mix personal finance with business. If someone owes you money, let them pay you out of their personal funds. Adjusting comp gets messy real quick.

- They have put a lot of trust in you!! I wouldnt assign my comp to my own mother, much less a friend. "Reasoning" such as this is exactly why I would never do it. This person deserves more than a measly $100 per month. If they were being paid direct and had their agent number on for a % of comp, this would not be an issue and the temptation would not be the same.

- The monthly hours stipulation is ridiculous. Some months there can be a good bit of service work, other months there can be zero service work. That is not the way this industry operates normally. You get a %, no matter how much or how little service work is required that month. Anyone setting it up differently is just taking advantage of someones lack of knowledge.
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Last edited by scagnt83; 05-24-2017 at 08:24 AM.
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Old 05-24-2017, 08:15 AM   #5
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rousemark on What Would You Do in This Scenario?
 
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What Would You Do in This Scenario? Re: What Would You Do in This Scenario?
I have already said what I would do simply because I think it is the right thing to do. But look at it strictly from a mercenary point of view. If you do anything other than what I suggested, you can forget about getting a call if the agent finds another group with which they need help. But it goes farther than that. She, without a doubt, will tell every other agent she knows that you did not keep your word. If they need help with a group, you won't hear from them either.
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Old 05-24-2017, 09:42 AM   #6
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What Would You Do in This Scenario? Re: What Would You Do in This Scenario?
Originally Posted by sdinsure4life View Post
Scenario: Another health agent (A good friend for many years) asks you to make a presentation to a 50-person group that she has already initially contacted, made the first appointment and met with alone to discuss becoming their agent for all group products.

She feels that you are better-qualified with group products knowledge-wise at that time and she also wants to make sure that the group is not lost. You agree to go with her to the second appointment.

After this appointment, you make such a great impression on the HR Director and Accounting Manager that in a subsequent meeting, they request you to be the Agent of Record on all future business.
<Right here is where you screwed up. You should've had the ETHICS to NOT allow this to escalate to where it is and explained to the HR Director and Accounting Manager that this other person brought you in and this is the arrangement. If you do things RIGHT in the beginning, you don't have to apologize and correct for it later on.>

Originally Posted by sdinsure4life View Post
When you tell the originating agent about the group's request, she is reluctant to go along since she has never given up control of a group she has originated. But she finally gives her consent as long as she will be paid commission regardless of not being the AOR. You assure her that this will happen. She relents only because she trusts you implicitly.

Since she owes you some money from a previous loan to her, you suggest that a 60/40 split be enacted until the loan is repaid, then the split will go to 50/50. The loan is repaid in full within 6 months, but the change to 50/50 never occurs.

Through your joint work, the case moves forward to generate a very good living in commissions earned, which you receive and then cut a monthly commission check for her portion to your friend. You handle the day-to-day management of the group and you request that she (The originating agent) help you from time to time upon demand, which she does without fail.

There is a rather odd caveat which you have insisted on from the beginning - that is, the agent is required to work a number of hours every month to EARN her commission.

At the end of the first year, you feel that you are doing more work on the case, but then again, you are still getting an additional 10% commission for your troubles. And the commission will be increasing because premiums rise on the anniversary date of every year. The agent has followed through with every request you have made to help you without reservation. You have never shown any dissatisfaction (Either in writing or verbally) to the originating agent.

Keep in mind that even most ancillary carriers (AFLAC, Colonial, Combined, etc.) pay 50% commission indefinitely to the independent agent/agency for allowing them access to their groups - and the ancillary agent does ALL of the work! In addition, you would have never made one penny of the nice commission income you now enjoy if this agent had not captured the case in the beginning.

Q. What would you do?
A. Stop paying the agent any commission in the future because you want the entire commission for yourself;
B. Lower the agent's commission to 25% from 40%;
C. Pay a ridiculously low amount of say, $125.00 per month, for the next two years and then stop paying commissions altogether, or
D. Continue to pay the agent the 60/40 agreement and ask her to continue helping as necessary, thereby retaining a friend.

Thank you for your input - I'm sure that it will be interesting.
Treat loans and working relationships separately. Otherwise it's called parenting... and that's kind of what you've gotten yourself into.
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Old 05-24-2017, 11:06 AM   #7
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State: NWBenefitProvider is an Insurance Agent from Washington
What Would You Do in This Scenario? Re: What Would You Do in This Scenario?
1) Don't loan money to other people
2) Drop the split to 50/50 like you had agreed

If this agent hadn't valued your professionalism and knowledge, they wouldn't have brought you in to begin with. Don't sweat this at all, just take the higher road and it will come back to you in spades.
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Old 05-25-2017, 03:41 PM   #8
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What Would You Do in This Scenario? Re: What Would You Do in This Scenario? sdinsure4life is the thread starter for: What Would You Do in This Scenario?

Hello All,

Thank you to everyone who has responded so far! Your input really means a lot to me.

My apologies to all, but I have a confession to make - this is my first post on the forum. I wasn't intentionally being deceptive, but I wasn't sure about the best way to post. Guess I made myself out to be the bad guy, huh? It is certainly reassuring to see that the agents who posted did not agree with "my" actions when I was pretending to be the other agent.

The truth is, this is what happened to me from another agent. I am the agent who originated the group; she is the agent who loaned me the money prior to the case and who stated that the percentage would go to 50/50 when the loan was repaid. She is the agent that lowered my commission with no prior notice and then offered $125/mo. when I objected. I am the agent who made myself available whenever she needed help and dropped everything to respond/help no matter what I was doing. In addition, she would have never made one penny of the nice commission income she now enjoys if I had not captured the case in the beginning.

That should set the record straight with my prior "incognito" post - thank you! I will look forward to more input...

P. S. Under my question, 'What would you do?' the letters 'D' and 'E' should be amended as follows:
D. Continue to pay the agent the 60/40 agreement and ask him to continue helping as necessary, or
E. Begin paying the agreed-upon 50/50 split with continued help, thereby retaining a friend.
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Last edited by sdinsure4life; 05-25-2017 at 03:52 PM. Reason: CORRECTION
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Old 06-12-2017, 08:08 PM   #9
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State: junkman is an Insurance Agent from Tennessee
What Would You Do in This Scenario? Re: What Would You Do in This Scenario?
You always keep your word both to the agent and client. One agency I started at had a standard split for joint business that carried out 2 levels of referrals ie client referred you, to 1 person, the split held. That person referred you to another, the split held. You kept any referrals from the 2nd person but if the original client gave you a referral, the split held. It wasn't a problem because the newbys always dropped out and you could keep the clients.

Group clients usually don't care who you pay or what the split is as long as the case runs smoothly and things are taken care of.

You could renegotiate the split at renewal or at least give the agent some work to do on the case - or even more prospecting. Always focus on making the pie bigger, getting your fair share and not on keeping everything.
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Old 06-25-2017, 11:42 PM   #10
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What Would You Do in This Scenario? Re: What Would You Do in This Scenario?
What is more important? The commission or your friendship...it's that easy. Choose one and there is your answer.
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