Independent Needs Your Help.

[passivesf]

Bertolino...do you have your agents on non-compete contracts? If so, how long is the non-compete for?

Thanx

 

[Bertolinoins]

Bertolino...do you have your agents on non-compete contracts? If so, how long is the non-compete for?

Thanx

I don't, non competes are useless in CA.

 

[oicu812nbama]

Offer a better split every year? Where does that end? That all sounds great but you don't have the knowledge and experience yet to run an agency. You're on the right track and are asking good questions but there is a lot you need to learn. Don't make the jump too soon to an agency owner and end up failing out of the business. Arm yourself with the right tools first and then go for it.

Yes, you are only half right though. I been rocking in life/ annuities but see the benefit of maintaining renewals. A prodigy of mine (who inherited a bunch of money) decided to buy an Allstate book. I helped him grow it from 1m to 2m in a year. I was actually making the decisions (he is only 22). I hated Allstate and felt like an employee. I have chosen not to buy a book with them. Instead I want to scratch an indy. I had no idea that companies would not contract with you till you had a book. My questions on this forum where how to get around that catch 22. While you could help me avoid some of your beginning mistakes; I could probably help you market. (That 1m gain was personal biz only and two years later he is using my methods of gain and maintaining a 88% persistency). Allstate thinks he is awesome.
That being said, I could run any small agency. I was a district mangager with 30 agents that I helped turn their whole life around. Again my posts are to avoid silly pitfalls of getting started. When i began in the life biz, I bugged pros like you guys to death until I had probably a hundred years of combined knowlege helping me to move forward. That was key to my success. I'm not asking these questions because I am completely green.
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A few things to consider.



If you want to be a producer... I would look for a smaller agency with good market access willing to give you 55% new and renewal. If you want to be an agency owner... I would suck it up with the MGA's/Wholesalers for a few years until you have enough volume to get direct appointments. If you are well funded... you can look into some local, regional clusters that will pay 100% + contingency but they typically have a fee to join and a monthly fee to cover overhead.

Bert is telling you exactly what you need to know. Let me elaborate on what he's saying. If you have no idea what your doing then a few years (out of 30) working for a broker is going to be the best investment that you have ever made.
Walk away with no renewals and thank the broker for the knowledge. If you have been captive (like me) your biggest time consumption is going to be quoting things that carriers won't accept. (Again if you worked as a producer then you would already know this). If you know what your doing and have the money to make mistakes then use the wholesalers until you figure out your market.
No one is going to tell you it's easy cause it aint. It doesn't have to be that hard if you read carefully what he said.
If you work as a producer a couple years and have money and a marketing plan, the big boys will give you a chance.
To sum it up. Got money and experience- wholesaler
No money or experience- broker
Money and no experience- buy a McDonalds and forget about insurance.
My two cents from research only. Bert trumps all of this from experiece. Maybe he will email you back.
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insurance 123
you had to get started somewhere, too. some people are producers and some people are owners. as an owner you have to accept that its hard to find a producer that will stay.

 

[FLInsa]

I have a buyout built into my independent contractor agreements. They can buy their book after 3-5 years for 1.2-1.5X revenue anytime they want to leave and can round up the financing. I don't care if you want to hang out a shingle and do your own thing. If I am going to incubate your future agency then I expect a fair deal as well. You can use me... but it isn't going to be free.

What Bertolinoins does is almost exactly what I do. You want to own your agency? No problem (as matter of fact I'll support your decision). You want to use me as a "stepping stone", no problem. Just know there will be a "fee" involved in this transaction .

 

[JCK818]

1.5 revenue to buy my clients back. SO basicly the agent did all that work for the last few years for free. I'm guessing you were paying around 50%. Agents actually agree to this? You must not have that much competition. If someone around here tried to do that, they wouldn't have a single agent.

 

[Bertolinoins]

1.5 revenue to buy my clients back. SO basicly the agent did all that work for the last few years for free. I'm guessing you were paying around 50%. Agents actually agree to this? You must not have that much competition. If someone around here tried to do that, they wouldn't have a single agent.

Actually I am located in Northern CA with every single national agency (AON, Marsh, Gallagher,etc) and two top 100 agencies (Interwest and John O. Bronson) within 10
minutes of my office and a dozen other established agencies in the $25-75M range.
I add a producer each quarter... which is the pace
I am comfortable with. If you think that is a bad deal... I suspect you have never worked for a large agency or managed a book of business over $400k in revenue. Most of those guys are paying around 30% new and renewal with the large bank owned houses being closer to 20%. A small shop with great market access and support + equity in their book without office politics is pretty attractive offer to most producers with a significant book of business at a large agency or direct writer like Federated, Universal UW's, Liberty, etc.

 

[oicu812nbama]

That's totally fair and i will do them same when I start putting them on. If they have no experience, then you could call it tuition except that you will get renewals from the money. There's no guarantee that tuition at a college will lead to anything

 

[black knight]

Bertolinoins and FLInsa, thank you both for your input. I always seem to nuggets from either of you when you post.
Just learning the ropes myself and I appreciate all the input.
Good topic too.
Thanks -

 

[Bertolinoins]

That's totally fair and i will do them same when I start putting them on. If they have no experience, then you could call it tuition except that you will get renewals from the money. There's no guarantee that tuition at a college will lead to anything

It is a great deal and I wish the agency I started with offered it. I came across it when I was looking around and interviewed with a large regional agency that has since sold to Wells Fargo. You never want an agent to be trapped so you give them an out on the front end while protectiing the investment you have made in that individual.

The worst thing that you can do as a commerical producer or agent owner is have a big ugly split... with the agency and producer fighting over accounts that are stuck in the middle. In those situations... it seems like the good producers get 40-50%... the house keeps 30% or so (too lazy to move, don't care or have other ties to agency) and the other 20-30% decides to bail out all together for another agency. I know when I was a fulltime producer... I loved it when a big producer left an agency because the clients didn't want to be involved and were likely to just go elsewhere if you provided a good option.

 

[oicu812nbama]

wow, i'd never steal clients from an employer. can't believe producers don't get sued for that