Independent Agent vs Captive

[senior-advisor-indiana]

Whatever John, mine is better than yours!

 

[midwestbroker]

Like a car without a transmission...

 

[Guest]

I was a captive agent selling life, DI, and LTCi for Northwestern Mutual during the 13 yrs or so that I sold. I also did a lot of brokerage work with other companies during that time, selling life, LTCi, and an occasional health insurance policy, so I got to experience the best of both worlds.

One of the big difference, for me, was that NML has some of the best technical back-up support in the business, but the biggest difference was in compensation. True, my commissions with the companies I brokered with were a bit higher, but NML contributed to a defined-benefit retirement plan for me (that will pay a modest pension beginning at 65), a noncontributary deferred comp plan based on persistency (which remains with them, growing tax-deferred), and they paid FICA taxes on my commissions, both first-year and renewals. They have flex-spending accounts, and group life, health, and DI insurance. Great E&O coverage and bonding. I left them about 2 yrs ago (just got dead tired of relentless prospecting), and they even pay FICA taxes on my renewals (which means that I'll get a higher Social Security benefit).

So...I had their excellent products as a captive (they don't allow brokerage) but I had the independence of brokering from other companies. Technically, I wasn't allowed to broker the same products that they offer, but they look the other way, knowing it's to their advantage in the long-run to allow their agents to establish relationships and credibility with their clients, most of whom eventually buy one NML product or another. Of course, if an agent wasn't meeting his minimum NML production because he was doing too much brokerage, he'd end up getting terminated. Fair enough, given all that they do for their agents. I don't think there are many other captive companies that do as much, but generally, I'd think that the benefits from most captive companies would be better or cheaper than independent agents can provide themselves. And if they don't, I can't see much reason to be captive with them.

 

[stayfit]

Hey folks,
Again, please don't try and change this into a discussion that I am trying to convince you, or any one that UA is Major Medical. I love the car analogy, though.

To me, there are some of you guys that are like the salesmen in a Mercedes dealership telling everyone, "Why buy a Hundai, when you can buy a Mercedes?! A Hundai doesn't even compare to a Mercedes!"

Guess what, guys? There are still salesman making a living selling cars at the "Buy Here, Pay Here" lots. I'm not going to insult anyone's intelligence by explaining why. Either you know, or..you don't.

My post was all about this thread: Independent or Captive. I think I want to be, not the Mercedes guy, and not the Buy Here, Pay Here guy(which I am currently), but the CarMax guy. That way if a guy comes in looking for a Mercedes, I've got it. If a guy comes in looking for only a car that will take him from NY to LA for a grand, I've got that too.

I just want to open a CarMax dealership, but don't know how, and I don't have, really, any money to do so. So, I'm just wondering if I should stick with my "Buy Here, Pay Here" business, and hope for the best with my 2-3 sales per week and the chargebacks(car broke down within the 30 day warranty; customer returns for refund), but still have to pay my overhead expenses somehow.

...Just love the car analogy(too much, maybe )

 

[CHUMPS FROM OXFORD]

Insurance Consultant...You took the words right out of my mouth! Defined benefit retirement...FICA taxes paid...able to broker out business...

Of course, I'm still here after 27 years. One of the lucky ones, I guess.

 

[msurrano]

For those of us just starting though, isn't it fair to say that between the salary for a new/financed agent, the training and the bonuses, that the loss of commission is more than made up for?

i agree brand new agent is prob better of captive, or going under a independent ga that will actually train him.
- - - - - - - - - - - - - - - - - -

Hey folks,
Again, please don't try and change this into a discussion that I am trying to convince you, or any one that UA is Major Medical. I love the car analogy, though.

To me, there are some of you guys that are like the salesmen in a Mercedes dealership telling everyone, "Why buy a Hundai, when you can buy a Mercedes?! A Hundai doesn't even compare to a Mercedes!"

Guess what, guys? There are still salesman making a living selling cars at the "Buy Here, Pay Here" lots. I'm not going to insult anyone's intelligence by explaining why. Either you know, or..you don't.

My post was all about this thread: Independent or Captive. I think I want to be, not the Mercedes guy, and not the Buy Here, Pay Here guy(which I am currently), but the CarMax guy. That way if a guy comes in looking for a Mercedes, I've got it. If a guy comes in looking for only a car that will take him from NY to LA for a grand, I've got that too.

I just want to open a CarMax dealership, but don't know how, and I don't have, really, any money to do so. So, I'm just wondering if I should stick with my "Buy Here, Pay Here" business, and hope for the best with my 2-3 sales per week and the chargebacks(car broke down within the 30 day warranty; customer returns for refund), but still have to pay my overhead expenses somehow.

...Just love the car analogy(too much, maybe )

haha you should start selling cars then! Joe Verde can help you out

 

[BIG RED IS BACK]

UGH! a FIVE year old thread.............

 

[paul43]

It sounds like your unsure about what the next step should be to take. What is causing you to rethink your strategy with NAA and consider other alternatives?



What do you think? Can you do better somewhere else? What "specifically is better? Earning 100,000; 200,000; 500,000 a year? Do you want to work out of your home and not mess with sales meetings and seeing people come and go within your outfit. Can you function 100% w/out daily and/or weekly support from other agents? Do you want to sell life, health, disability insurance, etc. etc.? What are your goals? Once those questions are answered it will make it easier to understand what you want and recommend some possibly solutions.



I would have started out in the same manner I did when I first become licensed. I was able to see the good and the bad about UGA as I stayed with them for about a year. Then I decided to leave because I couldn't force myself to sell those policies any longer. I originally thought about becoming a recruiter and think I would have done very well in that business. Then I went on quite a few interviews and saw the "corporate" world that did not sit well with me at all. Apparently most of the companies who were hiring wanted somebody they could mold (w/out any sales background), and in a nutshell, would be their little bitch. NO THANK YOU!!!!!!!

I originally spoke with John P. upon finding this board and he, along with Scott, played a huge impact in my decision to go independent.

I think life has thrown me quite a few speed-bumps since I started selling insurance back in 2006. I started my agency back in January and have been fighting ever since. One key ingredient I would have liked to have when I started would have been $10,000-$20,000 in expendable income and expenses saved up for 6-9 months. I had 3 months saved up and $0 in marketing when I started. I do not suggest anybody takes the same path I took unless they have no choice.

This forum, along with the support of my loves ones, has kept me going. I might also add I'm a bit stubborn and don't easily give up but that's' another story. Things have a way of working out so I'm sure whatever decision you make will be the right one. Just count on a 6-9 month learning curve starting out and prepare to do A LOT of reading.........

salpro22,--- can you tell us who are John P & Sott?

Are you working for an IMO/FMO.

Thank You,
Paul43

 

[everest4]

No fees:

And here's the theory:

*Captive agent: Training on the products and normally you have a manager who you can call at any time for support. They normally give you leads or heavily discount them. Lots of atmosphere which a lot of people need to get off the ground. Contests, bonuses and recogintion for your efforts. Typically from 20% to 50% reduction of commissions of what you could get as an independent.

*Independent Agent: No formal training and no manager. It's you in your office with brochures and underwriting guidelines. Top commissions but you're on your own for a marketing plan. No atmosphere and normally no one to call if you need assistance.

It's pretty much the opinion of most people on this board that as long as the products are solid newbies should start out with a captive company then move to being independent once you're knowledgeable.

This is pretty much it, in a nutshell.