Brokers Working in Their Own Best Interest

[Josh]

No matter how disgusting it is, I don't see how the agent could be sued for it. It's no different than LH agents selling over priced FE policies.

It is very different. If LH is generating a lead and gives it to an agent, LH is what should be pitched. An independent agent can sell whatever carrier they want. If the agent wants to risk that big of a chargeback and not do the best thing for the client, the client just might end up going somewhere else. No excuse for lying about it, but not selling the least expensive product available doesn't really amount to scumbag level. Bad business? Probably.

 

[rousemark]

It is very different. If LH is generating a lead and gives it to an agent, LH is what should be pitched. An independent agent can sell whatever carrier they want. If the agent wants to risk that big of a chargeback and not do the best thing for the client, the client just might end up going somewhere else. No excuse for lying about it, but not selling the least expensive product available doesn't really amount to scumbag level. Bad business? Probably.

One thing to consider is a lot of independents hold themselves out to their clients as being "brokers" In some jurisdictions, if not all, that opens a whole new can of worms. An agent represents the company but a Broker represents the client. If you call yourself a broker and do not act in the client's best interest, you are much more likely to lose if a suit is brought.

 

[Norwayguy]

One thing to consider is a lot of independents hold themselves out to their clients as being "brokers" In some jurisdictions, if not all, that opens a whole new can of worms. An agent represents the company but a Broker represents the client. If you call yourself a broker and do not act in the client's best interest, you are much more likely to lose if a suit is brought.

I don't know about that there is an actual Broker license when most of us are producers working for the carrier.

 

[BNTRS]

One thing to consider is a lot of independents hold themselves out to their clients as being "brokers" In some jurisdictions, if not all, that opens a whole new can of worms. An agent represents the company but a Broker represents the client. If you call yourself a broker and do not act in the client's best interest, you are much more likely to lose if a suit is brought.

Yup, the whole it's suitable so it's ok idea gets dicey when you talk about being a broker. Which is something I like to mention to clients. I do see my role as broker, and so I don't care at all about the insurance company's interest.

Still it's correct to point out that this client would have a tough time getting traction on a lawsuit based on this.

These types of people do a good job hanging themselves.

 

[senior-advisor-indiana]

These types of people do a good job hanging themselves.

I believe there is a thread on that already......

 

[rousemark]

I don't know about that there is an actual Broker license when most of us are producers working for the carrier.

In Tennessee you are licensed as an agent. But if you get to court, it would not be so much what your license says but what you represented to the client. Perhaps things have changed but we were advised years ago not to represent ourselves as a broker and therefore I still refer to myself as an agent and that is the title I would use on my cards if I were going to put a title.

 

[Josh]

In Tennessee you are licensed as an agent. But if you get to court, it would not be so much what your license says but what you represented to the client. Perhaps things have changed but we were advised years ago not to represent ourselves as a broker and therefore I still refer to myself as an agent and that is the title I would use on my cards if I were going to put a title.

Absent their being outright fraud, I'm not sure why it's such an issue for an agent to sell a more expensive product. Are we talking about a WL or UL case? The illustrations on each carrier and cash value guarantees could be different, the agent could have had problems with cases going through XYZ carrier, heck, the agent could think that companies that pay a better commission are more stable in his opinion so although he does like the extra money, he also thinks it's a sign of a strong carrier. I get why you folks are grumpy about him selling a more expensive product just to make an extra few grand, but I'm not seeing where this reaches scumbag level. Foolish? Short-sighted? Sure. Dishonest? Absent him lying to the customer, no. Unethical? Depends on his logic, but as long as the customer is getting a good product from a solid company and agrees to it, I'm not seeing the alleged crime or breach of ethics.

 

[rousemark]

Absent their being outright fraud, I'm not sure why it's such an issue for an agent to sell a more expensive product. Are we talking about a WL or UL case? The illustrations on each carrier and cash value guarantees could be different, the agent could have had problems with cases going through XYZ carrier, heck, the agent could think that companies that pay a better commission are more stable in his opinion so although he does like the extra money, he also thinks it's a sign of a strong carrier. I get why you folks are grumpy about him selling a more expensive product just to make an extra few grand, but I'm not seeing where this reaches scumbag level. Foolish? Short-sighted? Sure. Dishonest? Absent him lying to the customer, no. Unethical? Depends on his logic, but as long as the customer is getting a good product from a solid company and agrees to it, I'm not seeing the alleged crime or breach of ethics.

I agree with you Josh about the lack of illegality in this particular case. Whether it is ethical or not is subjective. I dare say there have been times for one reason or another that almost all of of the independents have not put the client with the lowest price carrier that we had available. I think the think that draws the ire of the pros is the attitude that has been presented on the part of the agent and even then we only have one side of the story.

 

[BNTRS]

Absent their being outright fraud, I'm not sure why it's such an issue for an agent to sell a more expensive product. Are we talking about a WL or UL case? The illustrations on each carrier and cash value guarantees could be different, the agent could have had problems with cases going through XYZ carrier, heck, the agent could think that companies that pay a better commission are more stable in his opinion so although he does like the extra money, he also thinks it's a sign of a strong carrier. I get why you folks are grumpy about him selling a more expensive product just to make an extra few grand, but I'm not seeing where this reaches scumbag level. Foolish? Short-sighted? Sure. Dishonest? Absent him lying to the customer, no. Unethical? Depends on his logic, but as long as the customer is getting a good product from a solid company and agrees to it, I'm not seeing the alleged crime or breach of ethics.

Umm, dude said he didn't want to write Pru because their commissions were garbage and they didn't advance. He then allegedly said that he would simply tell the client that Banner or AIG were his best bet (lie, and that's not a word that I throw around often) because that's who he wanted to write. If that's true, dude's a turd.

I've had plenty of conversations with clients and prospects that point out, I'd love to write a case with a different company because it would be easier, I'd get paid more, etc. But, the best bet was company Y instead. Sometimes they tell me, "Well, if you think comapny X would be easier to work with, that's who I want."

Whatever, at least I didn't tell them company X was the best and lie.

I've had situations where some off the wall company came up best for term insurance that I don't write. I've told the client, I don't write them so we can go with second best, or I can help them find out how to get an agent who can help them. I'm not going to pretend like that other company doesn't exist. Funny thing, no one has ever said "ok help me find that other agent."

Honesty is an amazing policy.

 

[somarco]

Just completed an ethics CE course which was actually better than past ethics course work. This one actually got in to defining agent vs. adviser vs. fiduciary.

I am familiar with all the terms but the way the material was laid out put a different spin on things and the degree of liability in each situation.

An agent was merely one who quotes a rate, offers no advice, and has a relatively low level of professional responsibility.

An adviser actually helps the client in making a decision and is held to a higher degree of responsibility.

A fiduciary is held to the highest standard. Very few agents will, in their role, get to the fiduciary level but if you do your butt is on the line.

All this aside, an agent like this won't last long. Especially after he has some chargebacks when a GOOD agent comes behind him and replaces the crap he sold.

You said this guy is a sub-agent. Do you have any idea how his GA feels about this kind of dealing?