Captive vs Independent...

[CFP83]

thought I would dig this one up again...a lot of good thoughts on here.

I think something that should always be in the conversation of "Captive vs. Independent" is how big a role does investments play in your business. Let's assume we're taking about someone who operates or markets themselves as a financial advisor, financial representative, or financial planner.

We all know that many are allured to the independent space because of the higher payouts they can receive in their life/DI/LTC commissions as well as higher payouts with investments as well. So the first thing someone does in going independent is negotiate good contracts through direct relationships or IMO/BGA's for their insurance business. Next, this person has to find a broker-dealer to run their investment business through.

There have been several good comments already on this thread about the "lonely existence" of being independent. From my experiences this is very true when it comes to support, relationships, & tools from my b/d. My practice being close to 60/40 insurance to investment revenue, investments are a very important part of what we do. Many indy b/d's are very transactional in the way that they operate and seem to be geared more towards "investment only advisors". Being someone that believes you don't care about your clients if your not discussing insurance, I clash with most in the independent broker-dealer world from home-offices to other producers because we simply operate with different thoughts about planning and helping clients.

I guess my point here is this....independent vs career is a completely different conversation if you are strictly an insurance producer. I think the conclusions & answers to this timeless question are very different if you are doing insurance and investments.

 

[peopleperson]

I have NEVER been independent. I have been captive however and looking to make the transition here shortly. I was captive for over 2 1/2 years now and I know enough to do well on my own I feel. I hope your comment rings true for me because I feel the reason I'm leaving is for more dinero. Captive contracts are not as great to begin with and dwindle down even more the longer you are captive.

I agree. They do grind you down year after year; and they find more hoops for you to jump through to get what you got the priior year.
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Anybody have any horror/success stories about going captive through AIG? I did a search and nothing came up. When people talk captive, AIG doesn't appear to be one of the "usual suspects."

I worked with American General life and acc. Which was bought out by AIG. It was a good company to work for back then (91-94). But the contract got more restrictive as time went by. I'm not sure if it's still a good place to be as a captive; but many of the guys I worked with back then are still there.

So AIG might have made it sweeter for them. I do know they converted some agents to service only. It was a good thing for the ones who were burnt out on sales. Not sure how well the service agents are compensated though.

Of course you constantly have to validate your contract with them or end up on probation. They had a good base of clients for me when I started as a detached agent.