Are FMOs Necessary?

[AgentWillN]

Are FMOs really necessary?

I have been in the industry for almost 2 years now, writing Life, Health, and Medicare products. Most of my appointments came directly through my FMO. But, now that I am more "established" I was wondering if FMOs are really needed from this point onward.

I cannot speak for others, but other than providing me the Appointments that I need with various Carriers, my FMO does not do too much outside of that! I am pretty sure, they take a % off my Commissions, but am not exactly sure on details.

Should I break ties or am I even allowed to break ties from my FMO? Any insight would be greatly appreciated.

 

[TwiLight]

You will find that 95% of insurance companies only offer contracts through FMO/IMO's with no option to go direct.

Your question should be.... Why are insurance companies insisting on using FMO/IMO Structure instead of going direct.

That is an easy answer: Because they make more Money outsourcing the marketing and financial responsibility they have when going direct.

 

[Larry Tew]

I disagree with that "95%" figure. But the number - whatever it really is - is irrelevant. What matters is as an agent, do you have the base training, knowledge, and mindset to operate as an independent. If not, you need to be in an environment (Captive, FMO, Producer Group, etc) that brings value to building your practice at a cost (haircut, split, etc) that is fair for what you're getting.

When it comes to FMOs and captives, some agents swear by them, others swear at them. I would say though that 2 years isn't much time. There's more to learn and while you can learn as an independent, I think I would exhaust the mentoring environment first. It couldn't hurt to investigate other FMOs and even captive companies to compare against your present situation. You might find that what you have isn't so bad.

 

[jlata1]

Theres no doubt in my mind 90% of fmo's are worthless blood suckers who override an agent for life. Sure some are better than others but one you learn the company there's no need for them but they make overrides for life.For a brand new guy he needs to be captive as he needs massive hands on to be learn. All the fmo and imo's I've had to call the co's directly for everything from supplies to underwriting to general info.Fmo's don't like co's like ohio national or layafette life that have regional directors as the commissions are much lower for imo's as the spreads are small from the top contracts to the next level as they use ppga's. Since you can't get around imo's find the one that will give you the highest contract with each company you want to be with and make sure they'll release you at any time.

 

[bill3173]

I am pretty sure, they take a % off my Commissions, but am not exactly sure on details.

You don't want to know. I had a an FMO accidentally send me their commission schedule instead of mine once, and I actually laughed out loud at what they were getting paid on my production, and my contract was good.

It was a whole lot of money for answering the phone when I call 4-5 times a year plus the one time appointment paperwork.

 

[WinoBlues]

For me most are useless other than providing higher contracts. The exceptions really stand out for me.

Once the policy is issued I deal directly with the company so the FE earns 0 renewal override, they still get one but do not earn it. With the exception of Pinney, most suck at case management during pending. We are much better at it. So most do not earn anything there. I do not require nor get any outside sales training so they do not earn anything there.

So with a couple exceptions they bring little to no value to me.

 

[Josh]

For me most are useless other than providing higher contracts. The exceptions really stand out for me.

So with a couple exceptions they bring little to no value to me.

I'm going to pick on you a little bit here, but commissions are the main reason agents don't want to go through an FMO, right? If the FMO does nothing but get you a higher contract, it seems like they're doing exactly what agents want. Of course case management, leads, etc are also something people want from FMOs but that's really much more of a GA role than a FMO.

 

[jlata1]

In some ways Josh is correct. If one can piggie back the imo's contract to a higher commissions then thats good.But when an imo gives only street he's usually making 20-30% over rides for doing little for the majority. many smaller imo's piggie back larger ones who have higher contracts for that same reason as they can get a higher commission rate under the larger imo than on there own

 

[WinoBlues]

I'm going to pick on you a little bit here, but commissions are the main reason agents don't want to go through an FMO, right? If the FMO does nothing but get you a higher contract, it seems like they're doing exactly what agents want. Of course case management, leads, etc are also something people want from FMOs but that's really much more of a GA role than a FMO.

I will admit the IMO/FMO line gets a little fuzzy for me. Case management is important to me. I learned to prospect so leads are not an issue at all for me. Now this is for Traditional Life insurance were case management can be time consuming. For my FE business there is little to no case management so uplines are even more useless for me.

 

[Josh]

I will admit the IMO/FMO line gets a little fuzzy for me. Case management is important to me. I learned to prospect so leads are not an issue at all for me. Now this is for Traditional Life insurance were case management can be time consuming. For my FE business there is little to no case management so uplines are even more useless for me.

I don't even really disagree with you, I just thought it was funny because if you skim it then it reads "the only thing they can do is give you higher commissions" then a few lines later "but they're basically useless". It's just funny, fortunately for recruiters that one thing they do is the one thing most agents really want. I think when agents have uplines that give them pretty low contracts they assume that going direct is the best way to solve that when the reality is usually to get the highest payout they need to go through the right recruiter/upline/fmo.