ByeBye NYL - Hello Indepedent!

[SuperWoman]

Good day friends,

I have not been here since I joined NYL in Jan 2015. It's been a whirlwind experience, good and not so good, but now I'm going indie. I've met a man who runs a small group health agency wanting to add a life agent. *me*. We meet in two days in his office to discuss further and meet his officer manager. If anyone could offer me guidance on what kind of deal would be fair, I'd appreciate it. Here are some facts:

1. He's been in business 25 years. Strong group book. Rarely upsells to life, only every now and again

2. I would have access to his book to cold/warm call to cross sell life/LTC/disability(possible, but not probable)

3. His small staff would do my paperwork/servicing

4. He wants to eventually bring in another agent to do group health so he can begin semi-retirement and be the king

What kind of deal would be appropriate? I know the value of his book for leads is HUGE.

I know nothing about going Indie so Im gonna read the snot out of this forum.

Many thanks, y'all.

Peace, from Northern Atlanta, GA.

 

[DHK]

A lot of this would be determined based on your current NYL production and type of business you've been doing.

I'd probably look at a 60/40 split in your favor of the commissions he would receive.
- So assume he has an 80% contract and a $1,000 annual premium. Total commissions would be $800. You get 60% or $480. (Of course, if it's a monthly pay, you'll only be paid as the premiums are paid. Even if there are advances, you'll only be paid on 9 months of the total amount advanced. That's the industry standard, as you know.)

If he's paying you any kind of salary, draw, or benefits, then the numbers would be lower because he's taking on more risk by paying a salary, draw, and benefits.

I'd also look at introducing either a tiered production commission schedule, a length of service increasing split, or both.

Tiered production: If you hit $50,000 in commissionable premium, then you get 65/35, not just 60/40 - as an example. Determine an appropriate interval, such as $25k or $50k to determine when you get an increasing % commission. Maybe you get 60% on the first $50,000 and an additional 5% for each additional $25,000 you sell?

Whether commission bumps are effective as of that month, or retroactive from the beginning of the year... is probably up to the person who keeps the books and how easy or difficult it would be to calculate.

Length of service: For each year you stay, you increase your split by 5%, to a maximum of 80% of the total commissions paid. After 5 years, you'll be at 80%, just for sticking around.

Remember, he's not doing much in this area, and he has the relationships and the business overhead, so he's always entitled to something. But he also needs someone that wants to stay. I think a permanent minimum 20% cut to him would be quite fair.

What about any new relationships that YOU bring into the agency? Should it be at the same commissions? Sometimes it makes sense to give you more of a split from personally sourced prospects. However, don't confuse that with referrals from existing clients. Those referrals wouldn't have happened without the agency doing a good job in the first place.

I hope you have had good referral training. If not, here are two great resources and tools I recommend:
http://sandyschussel.com/products-sale/

Referral Coach Introductions Journal - Referral Coach

Don't forget that you have business expenses too. You may want to consider what the agency may pay versus what you should pay for. Who is going to pay for your E&O? Is he going to charge you for your desk, phone, computer, etc? If so, at what point will he not charge you? What about sales support resources? The VSA is inexpensive, but that doesn't mean that you have to pay for it. Any other selling systems you would want to use? Maybe you set something up for expenses reimbursed after your first $50k in production?

If I were you, I'd look into the Virtual Sales Assistant, especially the priority approach to do policy and financial reviews with his clients. For $23.95/month (or $19.95 if you're a NAIFA member), you really can't go wrong.

The Virtual Assistant | The Complete Financial Advisor Toolbox

http://fsonline.com/Simpler_Way.pdf

(BTW, just because the VSA has fillable PDFs doesn't mean you should email these out to people you haven't met with. Always have an in-person appointment, and only those that YOU have personally sold to, should you even consider emailing a fillable PDF to them.)

 

[SuperWoman]

Helllllo DHK!

How nice of you to give me SO much of your time and information. Many thanks!

As I read your first line, ending with "as you know", I chuckled because there is so much I DON'T know..LOL.

He didn't ask one bit about my NYL production, as he is a small office guy, looking to expand. (The Mass guy who is trying to recruit me certainly wants to know my production, however).

I have good vibes about this gentleman for a few reasons, but the main one is he speaks very highly of his office manager, who he says is the "neck" to his entire success. He wants to relocate his office to another nearby city but since she doesn't want to move from her home area, he won't. So I value that he values her. Integrity is everything, isn't it?

Ok, so I shall move on to review all your thoughtful advice and be back with I am sure, more Q's.

 

[pcbinsurance]

Welcome back SWoman! This year and a half surely has flown by.

Weren't you working with NYL in South Florida? My memory sometimes fails me.

As for going indy, good luck! I think the situation you have laid out looks promising. DHK, as usual, has outstanding thoughts about stuff you need to look at.

Good luck!

 

[Golfnut2112]

I would not do it stay with NYL. No matter what he calls it , you are working for his agency and he will own your business, that is of course you need his current book of business to work.

 

[kgmom219]

My two cents...who owns the book?

Whose name is going to be on the app as the agent? You as the "writing" agent? Or his agency? Are you going to put both names on the app, so there are no issues with commissions?

The flip side is...what are you trying to do? Be an agency owner with a significant BOB? Or you want to work for someone, make some decent money with a lot of flexibility and in 20 (or whatever) years retire?

If you want to own a book and an agency, this is a bad idea. Unless he is willing to let your name be on the app and he is looking at this partnership as an easy way to make some money, with no effort or overhead.

If you want to work for someone, knowing you can sell and just want to be left alone to earn commissions, then this makes sense.

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My two cents...who owns the book?

Whose name is going to be on the app as the agent? You as the "writing" agent? Or his agency? Are you going to put both names on the app, so there are no issues with commissions?

The flip side is...what are you trying to do? Be an agency owner with a significant BOB? Or you want to work for someone, make some decent money with a lot of flexibility and in 20 (or whatever) years retire?

If you want to own a book and an agency, this is a bad idea. They are HIS clients. And what happens when you get a referral from these leads that isn't his current client? Unless he is willing to let your name be on the app and he is looking at this partnership as an easy way to make some money, with no effort or overhead, I would pass.

If you want to work for someone, knowing you can sell and just want to be left alone to earn commissions, then this makes sense.

 

[pcbinsurance]

I agree with KGMom. Are you really independent, working for this Agency owner???

 

[DHK]

You're all right. This is not really an independent situation. It is a non-proprietary situation, based on the agent's contracts that SuperWoman is expected to sell under.

You can also look at it as a joint venture. He shares office space and his clientele, while you bring the effort and sales skills to increase revenue.

It's really a partnership. However, with all partnerships, make sure you have each person's responsibilities and compensation agreed to IN WRITING. Make sure you have a defined exit clause - non-solicitation agreements are common for this too.

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A better way to have this is that SuperWoman can have her own selling contracts and then shares a portion of revenue/commission splits with the other agent.

In that case, it would be for revenue only, and not for sales credit or qualifying for company trips or anything else.

SuperWoman can then contract with whomever she wants and simply splits the business with the other agent. I'd look into Ohio National - a forum sponsor for one contract, then find a reputable IMO for others.

 

[SuperWoman]

Once again, thank you all -pcb, KG, golfnut, and DHK!

Such great good for thought. All points I need to address. It is a partnership much like NYL was. I have a "mentor" at NYL - called a partner. He was a district agent who was a still active agent who sold and brought in agents under him to mentor and earn up to 10% from their sales. In addition to paying NYL approx 45-50% of everything I sold. So it's not much different here. Though, NYL did pay certain small bonuses for case rate and certain products.

This gentleman had brought in another agent a few years ago to sell group health, like himself. He had a 50-50 split with her. (Don't know any other bonus agreements). She only sold one group in 2 years with him, it didn't end well,he said. I don't think she was much trained and full time, and he may not have known how to mentor.

At NYL my name was on on apps, along with my district partner, of course, cus now he gets my old business. I do not want to own an agency, as asked above, although in future this gentleman will need a successor. His business should wish to stay on the books so he can retire as that wealthy king that he hopes to become.

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Welcome back SWoman! This year and a half surely has flown by.

Weren't you working with NYL in South Florida? My memory sometimes fails me.

As for going indy, good luck! I think the situation you have laid out looks promising. DHK, as usual, has outstanding thoughts about stuff you need to look at.

Good luck!

Hello Pcb!

You're memory is excellent I was with NYL-SoFla. Stayed 18 months, but didnt "trigger" till month 6. Which was on purpose. I stayed way too long. I had that gut feeling after all the senior management upheavel. The managing partner was demoted big time after some "info came to light". It's too long to go into but their management style is all dependent on whose the boss that day. Ridiculous micro managing/training and unhappy senior folks. If I missed a new agent monthly meeting Ihad to write a letter to the MP, trainer and my personal partner explaining why I wasn't there. BUT...there are a lot of excellent humans there and I learned a lot and appreciate all that was done for me.

All in all, it's just life and I am moving on up now!

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Now that I think about it...

more questions:

1. Who pays for my appointments to various carriers? (Are there fees?)
2. I do have a few clients I will be writing soon, all existing business.


So many elements to consider.

And I keep getting recruited by a Mass agency. They want me to pay $140 month for E & O - $5million coverage. I have $3mill with Zurich now that I pay a heck of a lot less.

Any ideas why it's so high at Mass?

 

[SuperWoman]

Hey folks....


Update and question:

This gentleman has no experience with having an agent work for or under him. So he isnt quite sure what deal to propose. It appears he wants to feed me specific leads, have be work them and split it 50-50. We are meeting today to discuss the final details.

Things like AOR, renewals etc have are important, obviously. Since he just wants me "part-time" to work his book, any suggestions on what kind of offer I just be looking for from him?

I think AOR is a must for the life side (He is a group heatlh agent). But what about split? And any bonus for bringing in XXX of dollars?

Thanks in advance