FMO/IMO with 0% Override

[BuckNasty]

It won't work unless the "FMO/IMO" pays the agents. Why you ask? Because some person has to be the top person. Meaning, you can't go and get a 26% contract and put everyone at 26%. First off, all those agents would have to qualify for those levels (which isn't going to happen), so the only way around that is to have all of the contracts/commissions assigned to the top person. Yes, there has to be a person that is the principle of the agency. That top person would have to be responsible for paying the agents.

On top of all of this, who's business would it be? The writing agent? Nope. It's the top person. If the top person ever wanted to be nasty about it they could just cancel your contracts and take all of your business away and there would be nothing you could do about it.

Keep in mind though, you have to qualify (proof of production) to get the levels above street anyway. If your contracts were through us for instance, you would be on the highest level you could qualify for and still be paid direct from the company. What more could you possibly ask for?

Thank you Todd, Newby & others who have responded. Yeah, I guess this info that you provided does make it seem like it would be a difficult task.

You ask, what more could you ask for? Well, for one, and I mean no disrespect to you as an FMO, but personally I have never asked for or received any added value from my FMOs other than a quote engine...which obviously can be obtained independently.

Now I know there are agents, and probably plenty that you and Newby have under your umbrella, where there is training and hand holding involved where you rightfully earn your override. But personally, it irks me that I'm giving up a piece of my pie, for no perceived value. But again, I don't want or need anything from my FMO. I would of course prefer to be able to go direct and get the top contract available.

The second thing that doesn't sit well would be the inability for agents to get a straight answer as to the production requirements to get commission bumps. I have two FMOs and when questioned about this, the answers I received were differing as to the requirements when I was asking about the same insurance carriers.

But, alas, it is what it is and I appreciate the response.

How many med supp carriers to you have Todd? Isn't your ability to offer top contracts to agents contingent on you as an FMO having enough total production with a particular carrier to even be able to make it profitable for yourself?

Put another way, lets say Aetna had a top FMO payout of 27% and "ABC HUMONGOUS FMO" hap a trillion reps contracting with them and writing Aetna business. They could give their top agents 25% and still make a profit.

Whereas if "XYZ tiny FMO" has many fewer reps writing Aetna, maybe their FMO contract pays them 25% making their top agents cap out at a smaller percentage, say 23/24%, so the FMO can still make money. Is this be accurate and wouldn't it then behoove agents to make sure their FMO has the scale to be able to offer the largest upside upon their success?

 

[GoPokes]

Thank you Todd, Newby & others who have responded. Yeah, I guess this info that you provided does make it seem like it would be a difficult task.

You ask, what more could you ask for? Well, for one, and I mean no disrespect to you as an FMO, but personally I have never asked for or received any added value from my FMOs other than a quote engine...which obviously can be obtained independently.

Now I know there are agents, and probably plenty that you and Newby have under your umbrella, where there is training and hand holding involved where you rightfully earn your override. But personally, it irks me that I'm giving up a piece of my pie, for no perceived value. But again, I don't want or need anything from my FMO. I would of course prefer to be able to go direct and get the top contract available.

The second thing that doesn't sit well would be the inability for agents to get a straight answer as to the production requirements to get commission bumps. I have two FMOs and when questioned about this, the answers I received were differing as to the requirements when I was asking about the same insurance carriers.

But, alas, it is what it is and I appreciate the response.

How many med supp carriers to you have Todd? Isn't your ability to offer top contracts to agents contingent on you as an FMO having enough total production with a particular carrier to even be able to make it profitable for yourself?

Put another way, lets say Aetna had a top FMO payout of 27% and "ABC HUMONGOUS FMO" hap a trillion reps contracting with them and writing Aetna business. They could give their top agents 25% and still make a profit.

Whereas if "XYZ tiny FMO" has many fewer reps writing Aetna, maybe their FMO contract pays them 25% making their top agents cap out at a smaller percentage, say 23/24%, so the FMO can still make money. Is this be accurate and wouldn't it then behoove agents to make sure their FMO has the scale to be able to offer the largest upside upon their success?

If you went direct to the company, and did away with the FMO, then the company would have to hire and pay people to do some of the tasks the FMO is doing. And then they probably wouldnt want to give out as high of a contract, so in turn they outsource that duty to the FMO's, and they give them a piece of the pie to incentivize them to work hard at that role.

Getting a higher contract, IMO, takes a mixture of production, negotiation, and relationship. And sometimes all you need is one of those three. If you cant find the requirements from asking 2 uplines, then Id suggest calling more uplines. Much like a customer wanting a quote for a supp, if said customer gets 2 differnt quotes for the same company, then perhaps calling a few other agents wouldnt hurt... I dont think you are going to get all the answers posted on a public forum.

Just change your thinking, you're not giving up a piece of the pie. You get all the pieces, but the FMO gets some of the whip cream off the top.

 

[MGBAgency]

Wouldn't it make sense for a group of top producers to band together and start an FMO to get the absolute top contracts available?

This FMO would provide zero services and hence take nothing from the agents in the form of an override. Seems like everyone who was on-board could benefit. Agents could get paid directly from the carriers so there would be nobody needed to disperse funds. Also everyone would be as-earned so there would be no chargebacks to insure against.

What am I missing here? Is there some insurance component, licensing requirement or some other logistical nightmare that I am overlooking? With e-apps these days, it's not like FMOs are even getting involved pushing paper around.

Maybe there is an easier way to go about what I am wanting to accomplish: eliminate the middle-man to increase comp on my med supp business. If there is, please share. Thanks!

You're missing​ slot. Youd have to form a company with ownership, you would need massive infrastructure with employees, national contracts, licenses, etc.

 

[VolAgent]

Thank you Todd, Newby & others who have responded. Yeah, I guess this info that you provided does make it seem like it would be a difficult task.

You ask, what more could you ask for? Well, for one, and I mean no disrespect to you as an FMO, but personally I have never asked for or received any added value from my FMOs other than a quote engine...which obviously can be obtained independently.

Now I know there are agents, and probably plenty that you and Newby have under your umbrella, where there is training and hand holding involved where you rightfully earn your override. But personally, it irks me that I'm giving up a piece of my pie, for no perceived value. But again, I don't want or need anything from my FMO. I would of course prefer to be able to go direct and get the top contract available.

The second thing that doesn't sit well would be the inability for agents to get a straight answer as to the production requirements to get commission bumps. I have two FMOs and when questioned about this, the answers I received were differing as to the requirements when I was asking about the same insurance carriers.

But, alas, it is what it is and I appreciate the response.

How many med supp carriers to you have Todd? Isn't your ability to offer top contracts to agents contingent on you as an FMO having enough total production with a particular carrier to even be able to make it profitable for yourself?

Put another way, lets say Aetna had a top FMO payout of 27% and "ABC HUMONGOUS FMO" hap a trillion reps contracting with them and writing Aetna business. They could give their top agents 25% and still make a profit.

Whereas if "XYZ tiny FMO" has many fewer reps writing Aetna, maybe their FMO contract pays them 25% making their top agents cap out at a smaller percentage, say 23/24%, so the FMO can still make money. Is this be accurate and wouldn't it then behoove agents to make sure their FMO has the scale to be able to offer the largest upside upon their success?

You think you are missing part of the pie, the reality is you are getting the entire pie and perhaps more than your production with that one carrier alone will justify.

Some FMOs aggregate production across multiple carriers to determine comp for an agent. So the production with any one carrier may not be enough to justify the comp level, but as a whole they do. If you were direct, you'd get what that carrier felt was appropriate based off your production with them alone.

Also, the reason you are getting different answers is because not only are there carrier specific production requirements, but the FMO may have their own internal requirements that may be higher than what the carrier requires.

 

[Todd King]

Thank you Todd, Newby & others who have responded. Yeah, I guess this info that you provided does make it seem like it would be a difficult task.

You ask, what more could you ask for? Well, for one, and I mean no disrespect to you as an FMO, but personally I have never asked for or received any added value from my FMOs other than a quote engine...which obviously can be obtained independently.

Now I know there are agents, and probably plenty that you and Newby have under your umbrella, where there is training and hand holding involved where you rightfully earn your override. But personally, it irks me that I'm giving up a piece of my pie, for no perceived value. But again, I don't want or need anything from my FMO. I would of course prefer to be able to go direct and get the top contract available.

The second thing that doesn't sit well would be the inability for agents to get a straight answer as to the production requirements to get commission bumps. I have two FMOs and when questioned about this, the answers I received were differing as to the requirements when I was asking about the same insurance carriers.

But, alas, it is what it is and I appreciate the response.

How many med supp carriers to you have Todd? Isn't your ability to offer top contracts to agents contingent on you as an FMO having enough total production with a particular carrier to even be able to make it profitable for yourself?

Put another way, lets say Aetna had a top FMO payout of 27% and "ABC HUMONGOUS FMO" hap a trillion reps contracting with them and writing Aetna business. They could give their top agents 25% and still make a profit.

Whereas if "XYZ tiny FMO" has many fewer reps writing Aetna, maybe their FMO contract pays them 25% making their top agents cap out at a smaller percentage, say 23/24%, so the FMO can still make money. Is this be accurate and wouldn't it then behoove agents to make sure their FMO has the scale to be able to offer the largest upside upon their success?

It just doesn't work that way. Just because we have FMO contracts doesn't mean that we can just hand out any % that we want to. We still have to abide by the companies production criteria for levels given above street.

As far as your pie goes, you have no pie at the moment. You're asking for for someone else's pie without justification. If you want the higher contracts then you have to show the production to get it. If you have it then you certainly deserve it!

You can call me at any time and I'll give you the real scoop as to the particular company's criteria for the higher levels. No problem.