FMOs Are Greedy
- Thread starter wehotex
- Start date
- 2,370
A good FMO should be like a business partner. Sure, you do all the selling, but they should be a back office for you.
I know some are just contract factories, and there will always be ones like that out there.
I blame new agents.
We (SIMA) have talked to a lot of FMO's that are throwing in the towel when it comes to training and extra support because of the high turn over ratio. Not that this is anything new for the field, but the time they are spending on individual agents is starting to take a toll for the couple of apps the new agent turns in before they are chasing their next dream or FMO that is promising the world.
The seasoned agents then are stuck waiting on the phone for the reps at FMO's while the reps are explaining to the new agent that they cannot cold call MA plans no matter what the last GA told them.
So, yes some are greedy. Some are tired of "wasting time" training. Some have a great rep and are doing great things. I will refrain from mentioning any FMO's because they may want to advertise on SIMA
I know some are just contract factories, and there will always be ones like that out there.
I blame new agents.
We (SIMA) have talked to a lot of FMO's that are throwing in the towel when it comes to training and extra support because of the high turn over ratio. Not that this is anything new for the field, but the time they are spending on individual agents is starting to take a toll for the couple of apps the new agent turns in before they are chasing their next dream or FMO that is promising the world.
The seasoned agents then are stuck waiting on the phone for the reps at FMO's while the reps are explaining to the new agent that they cannot cold call MA plans no matter what the last GA told them.
So, yes some are greedy. Some are tired of "wasting time" training. Some have a great rep and are doing great things. I will refrain from mentioning any FMO's because they may want to advertise on SIMA
- 15,041
Does that mean I can't keep this going, because I really wanted to keep arguing this until it went to 20 pages, but nothing changed.
A good FMO should be like a business partner. Sure, you do all the selling, but they should be a back office for you.
I know some are just contract factories, and there will always be ones like that out there.
I blame new agents.
We (SIMA) have talked to a lot of FMO's that are throwing in the towel when it comes to training and extra support because of the high turn over ratio. Not that this is anything new for the field, but the time they are spending on individual agents is starting to take a toll for the couple of apps the new agent turns in before they are chasing their next dream or FMO that is promising the world.
The seasoned agents then are stuck waiting on the phone for the reps at FMO's while the reps are explaining to the new agent that they cannot cold call MA plans no matter what the last GA told them.
So, yes some are greedy. Some are tired of "wasting time" training. Some have a great rep and are doing great things. I will refrain from mentioning any FMO's because they may want to advertise on SIMA
The sad thing is, that is why FMOs, GAs, IMOs, etc. exist. To train agents. Carriers don't need an FMO to hand out contracts. A couple of home office employees can hand out contracts. They are there to find and train new agents.
When the career system stopped being the primary if not only distribution method for many companies, someone had to step in to find and train new agents. Obviously the carrier wasn't going to do it, they just ditched their method. So they decided on paying an override to FMOs.
I've been told by a source I trust, the carriers are about as tired of the FMO system as the FMOs. If the FMO doesn't take that call about cold calling for MAs, it trickles up to the carrier. So here they are, taking that call, yet paying some FMO an override on this new agent.
New agents are stupid, they don't know what they don't know. Someone has to train them or we may not like the results. It may be a slow end to agents, it may be more and more regulations from the states, or the carriers may finally figure out how to sell internally. But everyone throwing their hands up and refusing to recruit and train new agents is definitely not the solution.
- 183
We can keep going, VolAgent, but I agree. To disagree. Agreeably. Lol.Does that mean I can't keep this going, because I really wanted to keep arguing this until it went to 20 pages, but nothing changed.
- Thread starter
- #25
- 2,401
In that example, a franchisee is receiving the training and specifications from the people that actaully BUILT the business from nothing. That's NOT what the FMO is doing. The FMO is oft times a useless middleman who takes a cut off of labor that he's not responsible for. A better analogy would be forced membership in a union when you don't want to be part of a union. They take your "dues" from your salary so that you can be a part of it. At least a union offers protection to its members. I've known airlines employees who were clearly wrong, yet the union saved their jobs. When is the last time an FMO has done that? They don't even have the power to get an agent re-contracted when they've been termed from a carrier. In a better world, I'd like to be be able to submit my contracts directly to the company and get my base commission + "override" cause I've earned it.
- 4,707
Train? Are you kidding me???
I have a MGA for Humana, and, a FMO for AARP/UHC.
I have never in my 35 years seen anyone do less.
God forbid I should ever call either of them with a question. They say they dont know and for me to call the carrier.
They are a worthless layer of fat!
- 15,041
Nope, that is the point of them. I believe you've been in business long enough that when you started, an independent agent was the exception and not the rule. Brokerage was a rare thing.
Carriers got rid of the agency system as it was expensive and brokers promised to provide the training for the override. Well, they aren't. I wouldn't be surprised if carriers start looking for more direct distribution at some point. Either directly with agents or direct to consumers. Worthless GAs are eventually going to cut their own throats.
- 147
I don't know if FMOs ever took over 'Marketing' for insurance companies with the promise that they would provide training. They took over 'Marketing' because they are more efficient at doing exactly that 'Marketing'. The same example can be seen in any business. Ex: Best Buy could deliver all their products sold online with their own shipping fleet but they don't they use USPS, Fed Ex, or UPS because its more efficient. Or when you developed a website for your office you could have hired a full time worker to maintain it and design it but you most likely used a third party designer.
Any Insurance company could hire a marketing department to create emails, make phone calls, and answer basic questions but it is more efficient to pay a flat override. They then know exactly how much each piece of business costs them since they only pay for 'Marketing' if an agent produces business.
For instance if a new company decides to release a Medicare Supplement that prior to that has only worked in Major Medical they wouldn't have any idea what agents actually produce Medicare Supplements (there are more than 72,000 insurance agents in Texas alone and less than 2,000 of them actually sell Medicare Supplements).
Unfortunately the overwhelming benefit lies with the insurance company to use FMOs. With that being said there are still many benefits to agents that work through FMOs(just not all FMOs).
- 15,319
I have GA and MGA contracts with only a few carriers. I go out on appointments with my agents whenever possible until they learn how to sell the product.
I feel my value added is worth a few bucks. I have yet to find an FMO that can do this. And I've never received a birthday or xmas card from any of them.
rick
I feel my value added is worth a few bucks. I have yet to find an FMO that can do this. And I've never received a birthday or xmas card from any of them.
rick
- 8,707
Rick that is commendable...I would recontract with you if we could go out on some joint prospecting calls....I an thinking of prospecting brothels in Nevada for accident and life insurance....just think how often old guys might have a heart attack or hurt themselves after that blue pill left them erect for more than 4 hours.
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