Why Do We NEED Uplines (FMOs)?

[wehotex]

I'm usually just going about my business, but every once in a while, something happens that makes me beg the question, "Why do we NEED uplines when we are well experienced and self-generating? The other day, the admin in the agency was complaining that I made too many copies, that the agency has expenses. I explained to her that those copies help to bring business to the agency and that the agency "has to do something" to help me and that I also have expenses. They don't do mailouts for me, no leads; they can't even do anything to help you with the carrier when you are in a pickle. All that I ask of them is that I can use their copier and fax machine to send in my production. I realize that she's just an unhappy admin (well, office manager if it sounds better).
All of this begs the question: Why don't carriers let us go direct, bypass the uplines and KEEP their override? I could be much more efficient on my own. If I earned more for my sales (all of which are self generated), I could afford to pay for mailouts, marketing events, etc. The upline just keeps the override and does NOTHING to increase my business.

 

[Josh]

There are a number of reasons why carriers work with uplines, not the least of which is that it's easier for them to have a single contact with an agency and have that agency work through the recruiting questions and contracting than for them to hire the staff to do it.

Let's not ignore that there are some carriers that will do direct appoint no problems.

 

[SherylBrown]

I can appreciate the thoughts and questions being shared here. Since I work in an environment of independent advisors who have a choice of where and how they do business, my view might be a little 'muttled', but I originally came from the captive world many moons again and the above comment shared was valid - - it's about having one point of entry in each direction that makes it more cost-effective for the carrier to do business in that manner. There are some carriers who do let you go direct, but typically - that doesn't come out best for the advisor and their clients. Why?

Having a team of people supporting your sale is usually the most beneficial way for a client/customer to get the best representation for their application. For example, I work in the Life - LTC - DI - Annuity space. We depend on advisors to have the F2F interaction and then the advisors depend on us to make sure their applications are filled out properly, medical records are read and impairments are understood, negotiations between underwriters and our medical staff are handled at a high clinical level, and in the end the client receives the best offer possible making the advisor look very knowledgable in his craft. It's a team approach.

If the advisor goes direct but doesn't possess strong organizational skills to submit clean paperwork, strong medical prowess to understand and negotiate impairments, then the direct contract might be worth a few more dollars but the outcome may not be the strongest for the client. We each have a talent and working as a community typically renders the better outcomes.

I hope this helps. I'm happy to help with any questions you might think of later on.

Sheryl Brown / @AshBrokerage

 

[Stephen]

A good FMO will earn their overide by providing underwriting assistance, case placement, case design, and scrubbing the app. Not to mention that you are generally not taking a commission haircut vs. going direct, so all of this assistance is free.

If you don't consider your current FMO to be a business partner I would fire them and find someone else.

 

[xrac]

A good FMO will earn their overide by providing underwriting assistance, case placement, case design, and scrubbing the app. Not to mention that you are generally not taking a commission haircut vs. going direct, so all of this assistance is free.

If you don't consider your current FMO to be a business partner I would fire them and find someone else.

I agree with Central. Sound slike you are not with the right people. A good FMO will help you make more money.

 

[wehotex]

There are a number of reasons why carriers work with uplines, not the least of which is that it's easier for them to have a single contact with an agency and have that agency work through the recruiting questions and contracting than for them to hire the staff to do it.

Josh opines:
Let's not ignore that there are some carriers that will do direct appoint no problems.

Yes, some will let us go Direct, but then THEY keep the override. If they let us go Direct PLUS keep all of the overrides, it would free up a lot more $$ for mailings, marketing events, etc. The $207 gross (-) expenses doesn't leave a whole lot to do those things with.


Central FMO opines:
A good FMO will earn their overide by providing underwriting assistance, case placement, case design, and scrubbing the app. Not to mention that you are generally not taking a commission haircut vs. going direct, so all of this assistance is free.

With MA, there is NO underwriting involved. The agency does not help with member services issues and does not share "best practices", instead deferring those question to Broker DSU. I do a lot of legwork to help create Special Election clients via the LIS and Medicare Savings Programs. All I really need is a place to run off copies and flyers. The admin even has a problem with that apparently. I'm not ashamed to say that I know "more" than those clowns that staff the upline.

 

[Midlevel]

The only advantage I see is being able to fax all the apps to the FMO and they scrub them and check for errors and then electronically file them with the appropriate company. In most cases they don't know what the contract even says such as the AFLAC and Cigna contracts stating if you replace the business you lose all renewals. When asked about it they didn't know that was part of the contract.

 

[taterpeeler]

There is no... I replete no, none at all of up lines, every single one of them is ...ready? Worthless as teets on a boar hog. They are nothing more than a worthless sap on the system... There.... If you are one, pee pee up a rope

 

[Focus LTC]

Agents don't need uplines (FMO's). Carriers need them. Marketing your products to to agents for them to sell is expensive and is a huge overhead expense.

FMO's are willing to do this on commission. A zero overhead sales network for an insurance company has tremendous value.

For example, if you were an insurance company with a new Medicare Supplement Product that you want to launch, you can do 1 of 2 things:

1) Hire a full time marketing staff and spend tens of thousands of dollars marketing your products to agents online and buy expensive print ads in industry publications, dirct mail to licensed agents, etc etc with unknown results...

OR

2) Call Amerilife or AIMC etc. etc. offer them 3 points, don't put up a dime and have 10,000 agents appointed and selling your product in a couple months...

Hmmmm tough decision...

 

[wehotex]

Agents don't need uplines (FMO's). Carriers need them. Marketing your products to to agents for them to sell is expensive and is a huge overhead expense.

FMO's are willing to do this on commission. A zero overhead sales network for an insurance company has tremendous value.

For example, if you were an insurance company with a new Medicare Supplement Product that you want to launch, you can do 1 of 2 things:

1) Hire a full time marketing staff and spend tens of thousands of dollars marketing your products to agents online and buy expensive print ads in industry publications, dirct mail to licensed agents, etc etc with unknown results...

OR

2) Call Amerilife or AIMC etc. etc. offer them 3 points, don't put up a dime and have 10,000 agents appointed and selling your product in a couple months...

Hmmmm tough decision...

That makes a lot of sense> But in an age where we have so much e-mail communication, it seems to me like those costs would be lowered considerably. If properly incentivized, the agents would read those e-mails and get contracted directly with the carrier because the compensation would be greater. It just seems to me that after doing this kind of work for so long, it should at least be an option for me, perhaps not for a newbie since there would be need for training. I'm basically doing ALL of the work myself and layers on top of me doing nothing and getting paid for it.