Originally Posted by mbscagent
what would you recommend Retread?
1) If at possible, go direct with the carrier. Ask if there are any production requirements and make sure you know where to go for help if you have any commission problems.
(Just remember: You are on your own... and carrier Sales Managers, whether district or regional, can be scoundrels, too. They are working their way up the corporate ladder, so don't look to them for any help... you won't get it.)
Sometimes carriers will contract independent agents on a temporary basis, such as Medicare Advantage Organizations MAOs... that ramp up for a "sales season", and then pull back when it is over. Ovations (UHC) does this with their ICA contracts.
2) If a direct contract can't be arranged, scour this forum (search) for any scumbag FMOs and avoid them. There ARE some good FMOs out there, they are just hard to find. Unfortunately we have to work from a position of avoidance of known scumbags in most cases.
3) ALWAYS read the contracts offered you THOROUGHLY. DO NOT SIGN ANY CONTRACT THAT HAS BLANKS TO BE FILLED LATER. Get or make a copy of all the pages in the contract. Read it. Then read it again. Spend a few days thinking about it, and then read it again. (When I was new, a contract's signature page was shoved at me without any of the rest of the contract... be careful of these tactics).
Trust, but verify (a la Reagan).
It would be great if you had an attorney look over the contract, but most attorneys don't know much about the insurance distribution channel. They will only look at the commercial law aspect. A contract may be legal and still have provisions that will hook you. There are too many UNDISCLOSED side agreements between the NMO/
IMO/
FMO and the carrier that you are not privy to.
4) Demand full disclosure of your hierarchy, and check them out.
Sometimes the
FMO will have a "partner"
FMO, and you will be nested under a pair of FMOs... as in the case with Senior Marketing Specialists/AIMC or Pinnacle Financial Services/Premier Senior Marketing, etc. You may have to dig for this info... it is often not voluntarily shared. Yes, you can have multiple FMOs you work under on one contract and not know it! FMOs may contract under another
FMO.
The standard distribution channel runs something like this: A National Marketing Organization (NMO) will have many (often hundreds, if not thousands) Field Marketing Organizations (
FMO) under them, who, in turn MAY have Managing General Agents (
MGA) that have under them General Agents (
GA) that may recruit Solicitor Only Agents (SOA). This chain is not always in place in every contract, but if you are an SOA, recognize that everyone above you will take a slice of your commission. Most new agents start out with an SOA contract because their performance is not known and need training. SOA contracts are the poorest. Never sign one that has a long term... and realize that if you leave your
GA, you will leave your hard-earned business behind.
An Independent Marketing Organization (
IMO) may or may not be in the fray. They may be the only one between a
GA and the carrier... or they may in between an
FMO and the carrier or NMO.
The distribution channel is not set in stone. As a matter of fact, you might sign up under a
GA that is totally ignorant of his upline. It happens. IMOs, FMOs, MGAs, and some GAs are dedicated to recruiting agents. They are salesmen... some ethical, and some not, just like agents. Be ethical yourself, and don't associate with those that aren't, whether other agents or upline.
If you have some background in Sales, you may negotiate a
GA contract on your own, but it may come with production requirements. The
GA contract is often called "Street Level" because this is about the highest level you can enter at if you are new or one-man agency. If you recruit another
GA, you will be known as the Managing
GA (
MGA).
5) Ask for a pre-negotiated release IN WRITING. If that is denied, (don't take their word, "OH, not a problem"... believe me, if you don't have it in writing, you don't have one) this raises a red flag. Proceed with caution.
6) When you are sure you can abide by the terms and conditions of the contract, then sign it and submit it. Be prepared to honor your committment to that contract.
7) If you get burned, let us know here. Post your results on the forum for all to see. Hope for the best, but expect the worst.
FMO or Not?
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