How Are You Compensated?

[fadakakaruk]

I work for an independent Employee Benefits Brokerage and I do group plans and individual health, life and disability. I am paid as an independent contractor and our arrangement right now is I get paid 50% of the revenue I bring in across the board. I am provided an office and I can pass on some admin to the paid staff and I get about $2000 worth of reimbursements a year for health insurance and E&O. I have been at it about 7 years and I am trying to get a better deal or go out on my own. I don't have a non-compete. What is normal in this industry. Thank you in advance for any input.

 

[TwiLight]

I work for an independent Employee Benefits Brokerage and I do group plans and individual health, life and disability. I am paid as an independent contractor and our arrangement right now is I get paid 50% of the revenue I bring in across the board. I am provided an office and I can pass on some admin to the paid staff and I get about $2000 worth of reimbursements a year for health insurance and E&O. I have been at it about 7 years and I am trying to get a better deal or go out on my own. I don't have a non-compete. What is normal in this industry. Thank you in advance for any input.

PM me to discuss the group market in detail. Been doing it for 20+ years and have been quite successful.

We maximize compensation by marketing our Affiliated Payroll/HR Service Bureau and give you complete ownership and direct compensation from the carriers. You will easily double your income in 12 months marketing this way.

 

[somarco]

I don't have a non-compete.

That is very unusual.

Even if you don't have a NC, do you think you can leave and take all of the clients you have developed and do so with impunity?

 

[fadakakaruk]

My employer and I have a mutual respect and we are openly discussing a my compensation but I am looking for what is reasonable pay. I could take the majority of my book without impunity.
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I can't PM as I only have a few posts.

 

[leevena]

All things considered, your financial deal is not that bad. I am sure that you have begun to consider what your costs would be should you move out and need to support yourself.

If this were me I would consider my options this way. The 50% you are giving him would be your "cost" if you were out on your own. So from that perspective it is a wash. Now, what would be the advantages of staying? Would my income be enough or do I need a bigger block before I break from him? Do you get leads? Is it possible to eventually purchase his business or company? How well do you get along with him and would you like to work for him? How badly do I want my own company? Am I ready to take on the "ownership" issues/headaches if I go out on my own (remember this activity takes away from selling/earning)? And so on.

Good luck.

 

[somarco]

I can't PM as I only have a few posts.

There is a thread about how to achieve your goal . . .

 

[fadakakaruk]

For the first several years I didn't think 50% was a bad deal but I don't get any leads or marketing from the agency. Every client I bring in is on my own. I enjoy working in the agency and would like to stay here. As time goes on the 50% I don't keep is getting pretty large much higher than overhead for a one man agency. I just want to figure out what other peoples arrangement's are like. If I was in my bosses shoes and I don't have the non-compete to protect my I would be finding a way to make sure I don't leave to avoid a huge paycut. I just don't know what to ask for.

 

[billberry12]

Seems simple to me. Ask for 65% instead of 50%. Give yourself a 30% raise and explian to your partner that his overhead will not increase, and 35% of what you do is better than 0% if you jump ship. Suggest to him that your business would probably increase enough to make up for the 15% he is giving up, because then you can concentrate on selling, and not moving on to indpendence. Keep a lock on that non-compete for sure. I doubt you could run your own business for 35%, but he is already set up to. Food for thought.

 

[leevena]

I like billberry12 reply.

Another thing you could do is offer a fix cost, not a percentage. Try to figure out what his true cost is for housing you and offer a higher amount, which should make him happy. But I would treat the admin staff differently.

1. Calculate the actual cost of your office space, any supplies, phone, internet, etc that you may use and then add 30-40% to that.

2. In addition, offer an amount equal to 1/3rd the cost of one admin staff and the use of that person to some extent.

Now what you have done is shown that you are willing to stay, but work as a partner. Long story short, if things work out well, you might be able to work this into a true partnership or purchase later on down the road.

 

[sunbloom]

holy S***. in my country, I am independent and my comm is 10% for all General Insurance I sell.

Suddenly i feel like re-locating.