Ran into an old time NYL agent several days ago and for the third time he asked if he could sit down with me and discuss a business proposition. Not wanting to commit, I asked him to sum it up in a few sentences and I'd consider an appt. In a nutshell, He's wanting me to give him access to my P & C clients along with a recommendation and he will market financial services products,etc. Something I have little interest in. The "smelly part" is that he's offering to give me the 100k or so (my percentage) in lavish travel,etc and it will be "tax free" compensation. Sounds too good to be true.... bear in mind he's a thirty year NYL veteran, so he's not some weekend warrior......any thoughts ??
Since NYL is captive, he can't share commissions with you for their products. You did not say if you were securities licensed so if not, he can't share those either.
It sounds like he's trying to compensate you the best way he can in the situation.
As far as the ethics of it, I can't comment because I wasn't sitting there and didn't hear your words spoken in the deal either. One guys fair dinkum is another guy's outrage.
There's also an ethical question towards you of should you expect to be compensated for referrals?
Of course, a 1099 eliminates the "tax free" aspect of the deal. Is he offering you an "under the table' cash compensation deal? That would be shady and dangerous regardless of the ethics involved. And, of course, that would be illegal unless you reported that income.
I will not talk about the tax free part...that would scare the heck out of me...but in Maine as long as 2 individuals hold the correct licenses ie both holding a life license and the person doing the selling is the appointed person with the company that agent can share the commission with the other. The problem being that since the 2nd agent is most likely not also appointed then the first agent cuts both a check and 1099....i don't know what is legal in your state.
Since NYL is captive, he can't share commissions with you for their products. You did not say if you were securities licensed so if not, he can't share those either.
It sounds like he's trying to compensate you the best way he can in the situation.
As far as the ethics of it, I can't comment because I wasn't sitting there and didn't hear your words spoken in the deal either. One guys fair dinkum is another guy's outrage.
There's also an ethical question towards you of should you expect to be compensated for referrals?
I agree, however if you are letting this gentleman access your book of business then I would definetely consult the CPA on this one, do it the right way and don't expose your clients to any unneeded scrutiny from authority agency's. After all you are the one with everything to lose here.
I have a good friend who is a CPA and we refer back and forth over the years. I would never expect compensation for a client referral I send his way and visa versa. What we expect is handling our clients in such a way that they thank us for the introduction.
That said, we buy each other beers (lots) and lunches on occasion to say "thanks" to each other. Should I be 1099'ing his mirco brew tab?
I think before we get or got all hollier than thou about something, we should consider the possibilities of a situation.
Being an old NYLer, you can't give non-NYLers a commission. You might find other ways to say thank you, maybe this guy was a bit too overboard....
I mean do any of you guys "bill" for a referral given?
I have a good friend who is a CPA and we refer back and forth over the years. I would never expect compensation for a client referral I send his way and visa versa. What we expect is handling our clients in such a way that they thank us for the introduction.
That said, we buy each other beers (lots) and lunches on occasion to say "thanks" to each other. Should I be 1099'ing his mirco brew tab?
I think before we get or got all hollier than thou about something, we should consider the possibilities of a situation.
Being an old NYLer, you can't give non-NYLers a commission. You might find other ways to say thank you, maybe this guy was a bit too overboard....
I mean do any of you guys "bill" for a referral given?
See this is different than just referring a client or two, the guy is asking for access to (im assuming) all of your clients, to send them unsolicited phone calls or letters, or for you to set up a meeting. This is not the casual "oh yeah I have a friend that does life, let me give you his number" this NYL agent wants to work this guys client database... Completely different IMO
New York Life is This Ethical ?
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