I am an independent agent/broker and my core business is Individual Life / Final Expense. Send my own mail and buy my own FaceBook ads then ride around and visit to see who I can help.
Started renting office space last year in a highly reputable, medium sized local independent agency that focuses on homeowners & flood. Great environment and very good relationship between the owner and me has been developing nicely over time. Plus the agency has a nice website and an attractive office building/location so there's some "soft' benefit to my affiliation (vs. home office and no business address or associating with a less appealing shop).
Finally got my P&C license in September and trying to figure out what an equitable commission split should look like between the agency/owner and me. So far we have converted on a handful of one another's referrals, but not exchanged compensation (aside from me paying him rent, which is fine) nor have we put anything in writing.
To underscore - I am totally fine with paying rent. I am happy with the office space and environment, plus the fact that I pay rent helps clearly define the relationship (I'm not looking for a job, set hours or job-like responsibilities to the agency). That said I also did AHIP for the first time this year and picked up a Med Sup carrier and contracts with all the local MediCare providers.. and it seems like the agency owner views those capabilities as a potential asset to the agency...
I guess the three things I want most are: 1) a formula by which I get paid on homeowners flood business I bring in, 2) access to his entire book of business to prospect then pay him a split on that business, and 3) freedom to do what I want and continue making money on things that have nothing to do with the agency.
Should be easy, right? In a way I feel like the commission split could be any number ranging from 30/70 to 70/30 AS LONG AS the split is the same going both ways. For example, if he decides he can only pay a 30% split on homeowners commissions then fine - I'll just pay him 30% on any life/other business I sell into his book. He is also life licensed and has E&O so we already have him in my downline at one carrier and we both have writing numbers with a few other carriers in common.
A side goal is to keep admin and accounting simple and clean. When I sell one of his clients I want to have the carrier (not me) pay him directly. And I'd like to know that when I hand off a hot referral to his new business department that it's going to be tracked accordingly and I'll get paid on it promptly (and repeatedly with renewals in future years). There's also a question of when a sliding scale might be appropriate (potentially paying me more if I'm doing the actual quoting and closing vs just handing off the hot lead).
So in summary, I have no desire to employ my own CSRs or build my own agency empire one day. I like being affiliated with this shop and would like to see it turn into a win/win. My near to medium term goal is to maximize income from personal production (whether it comes from Life, Annuity, Health/Medicare or P&C). I've looked into a couple of the online aggregators and I'm not attracted to that model or frankly the Brightway route. Haven't even begun to contemplate "terminal value" or a potential future buyout of my book but that is probably something that should be taken into consideration as long as we are inching towards a formal agreement...
Thanks in advance for your thoughts and advise!
Dan
Started renting office space last year in a highly reputable, medium sized local independent agency that focuses on homeowners & flood. Great environment and very good relationship between the owner and me has been developing nicely over time. Plus the agency has a nice website and an attractive office building/location so there's some "soft' benefit to my affiliation (vs. home office and no business address or associating with a less appealing shop).
Finally got my P&C license in September and trying to figure out what an equitable commission split should look like between the agency/owner and me. So far we have converted on a handful of one another's referrals, but not exchanged compensation (aside from me paying him rent, which is fine) nor have we put anything in writing.
To underscore - I am totally fine with paying rent. I am happy with the office space and environment, plus the fact that I pay rent helps clearly define the relationship (I'm not looking for a job, set hours or job-like responsibilities to the agency). That said I also did AHIP for the first time this year and picked up a Med Sup carrier and contracts with all the local MediCare providers.. and it seems like the agency owner views those capabilities as a potential asset to the agency...
I guess the three things I want most are: 1) a formula by which I get paid on homeowners flood business I bring in, 2) access to his entire book of business to prospect then pay him a split on that business, and 3) freedom to do what I want and continue making money on things that have nothing to do with the agency.
Should be easy, right? In a way I feel like the commission split could be any number ranging from 30/70 to 70/30 AS LONG AS the split is the same going both ways. For example, if he decides he can only pay a 30% split on homeowners commissions then fine - I'll just pay him 30% on any life/other business I sell into his book. He is also life licensed and has E&O so we already have him in my downline at one carrier and we both have writing numbers with a few other carriers in common.
A side goal is to keep admin and accounting simple and clean. When I sell one of his clients I want to have the carrier (not me) pay him directly. And I'd like to know that when I hand off a hot referral to his new business department that it's going to be tracked accordingly and I'll get paid on it promptly (and repeatedly with renewals in future years). There's also a question of when a sliding scale might be appropriate (potentially paying me more if I'm doing the actual quoting and closing vs just handing off the hot lead).
So in summary, I have no desire to employ my own CSRs or build my own agency empire one day. I like being affiliated with this shop and would like to see it turn into a win/win. My near to medium term goal is to maximize income from personal production (whether it comes from Life, Annuity, Health/Medicare or P&C). I've looked into a couple of the online aggregators and I'm not attracted to that model or frankly the Brightway route. Haven't even begun to contemplate "terminal value" or a potential future buyout of my book but that is probably something that should be taken into consideration as long as we are inching towards a formal agreement...
Thanks in advance for your thoughts and advise!
Dan
