Giving leads to associate & percentage split

[Crazy Rick]

My long-time mentor/associate (who's 23yrs my senior) and I have an informal agreement between us. For example, if I get leads that I pay for and I’m not qualified to act on them due to lack of licensing or experience, I’ll give them to him. We both have separate offices and private lives. We’ve been working together on and off, informally for years.

My question is: If he or anyone else closes a deal from a lead that I give them, a lead that I paid for, or found on my own, what level of compensation would be fair for me to expect since they closed it? Based on commission percentage? (I would think so). What’s a fair split for both parties?

Last year, I gave him a lead that he closed on, (he told ME he closed, I didn’t go to him to inquire), in exchange, he gave me a Free CE course. I learned more in that real-world hour of experience than I could have from any stupid book, but I have a mortgage. Follow me?

I’ve seen producers on this board giving away leads, nothing formal, the giver and receiver I’m assuming work out a small deal. I’d like to keep things between my associate and I, just like that. I’ve known him professionally for years and neither one of us are into formalities. I just want to know what’s fair for both of us if I ever need to draw up a contract.

-Crazy Rick

 

[somarco]

Commission splits on product lines where you are not liscensed or appointed can come back to haunt you. I offer referring agents a flat $50.

They can take it or leave it.

I am not into recruiting, commission accounting, issuing 1099's. I do all the work, before and after the sale.

FWIW, I also refer out lines of coverage beyond my level of expertise or where I am not licensed. I ask for nothing in return and expect nothing. Sometimes I have received gift certificates to some very nice restaurants and have enjoyed the meal.

 

[Crazy Rick]

I follow. Who is that? Chuck? Ok, so far draw up a contract and keep my take @ $50. That sounds reasonable. My associate has a contract in place with an attorney. I haven't read it, I overheard him talk about how "If we're going to do this, let's do it all the way". The attorney gives my associate leads and in turn he gives the attorney something. Now I have an idea of what that "something" may be. Flat $50 huh? I guess that's good enough. I'm after all not really doing him any favors; he doesn't need the money. He hasn't prospected in twenty years and has large company residuals behind him. Flat $50, anyone else "Errrra wanna chime in heeaa" as Ted Kennedy would say.

 

[Crabcake Johnny]

Lunch and beer - that's my arrangement with three professionals who are also friends of mine. I farm out all lines I don't work: life, P&C, senior, etc...

I do not want a commission percentage. I do for them, they do for me when they can.

I'd rather meet for lunch and maintain my friendships then want them all go in the toilet over wanting a piece of the action..which would be inevitable.

They are doing 100% of the work - taking on 100% of the liability - taking on 100% of the servicing.

I get agents from time to time who want to give me a lead and think they get 50%. Survey says?

 

[CHUMPS FROM OXFORD]

I'm fortunate to work in an office with 700 other people...NONE of whom care about health insurance sales.

Kohls and Target gift certificates work fine with me.

 

[Crazy Rick]

I follow. I guess I was expecting something when I shouldn't have been now that I think about it. No contracts, no expectations. If I get a lunch or a free CE class, that's his return.

 

[The Rabbi]

I'd have to be a mooch to expect something for just a lead. What goes around, comes around.

If the lead is useless to you and you can put two people together, you have done a Mitzvah (good deed) and will be rewarded some day - so they say.

 

[somarco]

I don't (and wouldn't) bother with a contract. I have had agents offer to send referrals my way in exchange for 50% or so of the commission.

I politely decline.

I am not Jewish so I can't comment on those Mitsubishi things, but I do know the more I give away the more that flows back to me.

Funny how life works, huh?

 

[Crazy Rick]

Yeah you're right. No contracts, he wouldn't sign one anyway. I'll give him the leads that I can't work, and he'll repay the favor his own way like he has.

I guess it was a little presumptious on my part to expect anything from my mentor, but, live and learn.

 

[Crabcake Johnny]

Do you know crazy Joe Davola?