Agency Succession Planning

[hockeyday]

I’m a Medicare broker, who owns my agency and fully owns my Medicare book of business. I’m the only person in my agency and I’m contracted upward with some of the carriers direct, and others through Integrity Marketing. My book of business is about 65% Medicare Supplement/PDPand 35% Medicare Advantage, and I have approximately 700 clients. I’m nearing retirement likely within the next 1-3 years (haven’t decided when yet). In my ideal world, I would continue to add new clients and service existing ones at least a year, and then start working less. Ultimately, I’d like to sell my book of business. This may seem like a basic question, but short of hiring someone to help me (which I'm not very interested in), how can I begin to work less (particularly during AEP) and taper the business down, or would it be more beneficial to sell my book of business outright sooner? What should I consider?

I would also look for someone that will pay you as a capital gains or good will transaction

 

[hockeyday]

Wait a second . If the agent dies with no succession plan his renewals are over . So are your override renewals gone . The agent doesn’t recertify . The company takes ALL the renewals going forward .

Fmo's buying books of biz is going to be the next big opportunity for them,

 

[Mountain Peaks]

Personally speaking I’d never sell my book of business unless your desperate for money . I’m reading we’re many people getting books for 1.5 to 2 max times renewals . That’s nothing , if I were you I’d simply only take referral business and I’d never take face to face appts if your a face to face agent . I’d save none of your disenrollments . I’d no longer do drug reviews during aep unless people call you. I’d no longer send out any letters that clients . I’d become 100% were they call you. This is when you decide to retire . Over time your book will start peeling off . Your calls will drop big time . I’d say you’d make 3 times min doing that than selling your book .If you want to shut your phones off and be retired then I’d sell it

Personally speaking I’d never sell my book of business unless your desperate for money . I’m reading we’re many people getting books for 1.5 to 2 max times renewals . That’s nothing , if I were you I’d simply only take referral business and I’d never take face to face appts if your a face to face agent . I’d save none of your disenrollments . I’d no longer do drug reviews during aep unless people call you. I’d no longer send out any letters that clients . I’d become 100% were they call you. This is when you decide to retire . Over time your book will start peeling off . Your calls will drop big time . I’d say you’d make 3 times min doing that than selling your book .If you want to shut your phones off and be retired then I’d sell it

 

[Mountain Peaks]

Thank you, DonP!

 

[Packerland]

Wait a second . If the agent dies with no succession plan his renewals are over . So are your override renewals gone . The agent doesn’t recertify . The company takes ALL the renewals going forward

If an agent passes away the overrides stay with their upline

 

[sshafran]

If an agent passes away the overrides stay with their upline

I'm at the point (ok, past the point) of needing to do this.

Currently have an S-Corp. S-Corp owned my myself and wife is also on docs. S-Corp is licensed and comp has been assigned to S-Corp for years.

Planning on my wife getting licensed.

- Would she need to also get contracted & appointed by all carriers?

- Would she need to do AHIP and pass certifications of the carriers for MA and PDPs to continue to pay?

We have 5 kids and homeschool, so there's absolutely no desire for her to sell or actively do agent-stuff, but if I kick the bucket I have a good life insurance policy but I have a ton of commission I wouldn't want her to lose.

So - she's planning to get licensed but not sure what else she needs to do if you have insight.

 

[sshafran]

I'm at the point (ok, past the point) of needing to do this.

Currently have an S-Corp. S-Corp owned my myself and wife is also on docs. S-Corp is licensed and comp has been assigned to S-Corp for years.

Planning on my wife getting licensed.

- Would she need to also get appointed by all carriers?

- Would she need to do AHIP and pass certifications of the carriers for MA and PDPs to continue to pay?

We have 5 kids and homeschool so there's absolutely no desire for her to sell or actively do agent-stuff but if I kick the bucket I have a good life insurance policy but I have a ton of commission I wouldn't want her to lose.

So - she's planning to get licensed but not sure what else she needs to do if you have insight.

Quoted the wrong post above; more generally posting about succession planning for S-Corp not overrides...

 

[DonP]

If an agent passes away the overrides stay with their upline

On mapd ? That’s not what I’ve been told by many fmo’s . It’s universal if the agent died and didn’t certify all commissions including overrides revert back to the company . Why do you think fmo’s do anything to keep a agent certified ?Ive heard of fmo’s taking ahip for older agents so the upline continues their override. I think your wrong on this .

 

[Fisher]

- Would she need to also get contracted & appointed by all carriers?

- Would she need to do AHIP and pass certifications of the carriers for MA and PDPs to continue to pay?

Yes to both of those Qs, Scott. She would need to stay contracted and recert with AHIP and the carriers annually.

 

[Mountain Peaks]

I would also look for someone that will pay you as a capital gains or good will transaction

Paying me when selling the book of business as a capital gains or good will transaction certainly sounds like a good scenario, but given I'm receiving commissions now as 1099, I'm not certain how this could happen. I may be asking a question that deserves a longer answer!