Let's talk releases!

[retread]

Joe, I want to thank you for initiating this post. I am not a seasoned veteran, just green as grass. I have had my share of hard lessons on this subject of release, though. I won't repeat my rant, as it is posted already.

1) One thing I learned just last year, is that one of my FMOs stated that he belongs to an association of FMOs that meet and work with the carriers to establish marketing rules. If this is the case, it could explain why one carrier I am contracted with has a prescribed protocol for releases in writing that parallels the protocol that some, but not all, FMOs follow. I can view that company policy anytime I wish, and it is referred to in my broker/agent contract. Unfortunately, the release protocol remains hidden in some other of my FMO contracts. So it appears that the release issue is not standardized among all carriers/FMOs.

2) Most new agents, such as myself, are not knowledgeable enough to know how to approach an FMO, and instead get recruited by GAs or MGAs. Many new agents do not know anything about their upline (some could care less), and don't realize the contractual responsibilities until a serious issue comes up. At that point they may have a book of business that is at stake. The claim of "dishonesty" is rightly laid at the door of the contract designer. Full disclosure would demand the agent be made aware of the hierachy, and the protocol for release. Just warning a new agent of "chargeback" policy is not full disclosure.

3) I think the "distribution partner" system is evolving to eliminate the FMO system. Could it be because of the lack of honorable FMO contracts? A couple of companies I am direct with appear to be discontinuing captive agents and issuing exclusive agent contracts. They are still protective of their existing IMO/FMOs (trying not to lose that revenue stream), but all the while, moving towards reducing that system.

4) One carrier I am contracted with pays me through the FMO, while all others have my commission paid direct from the carrier. Guess who is slack about sending me my checks? (One of your favorites, Rick! ) I like it when the carrier offers me the choice of how I want to be paid. Believe it or not, folks, I just re-newed with a carrier that does this! (And this carrier pays me within TWO weeks of ap submission!) I have no reason to sign with an FMO.

5) All new agents should be given a description of the "distribution partner" system. This forum attempts to do this, (but could be improved... a "sticky" with these details would go a long way).

My personal problem stemmed from a marketing organization that never used the term "GA" and disallowed that was his standing, claimed to NOT know what an "FMO" was when confronted, and signed me up under his FMO as a "licensed solicitor/LOA" (not telling me about this or describing what a "licensed only agent [LOA]" meant in the hierachy), thereby putting my commission level at the lowest. Ignorant of what all this meant, I signed up with him knowing only that I needed training, mentorship, and leads. This agreement did not provide for accountability to those terms he agreed to, only my hierachical position, which I did not understand. (Q for you legal beagles: Isn't this a one-sided contract?... Unenforceable in court?) This is what I think Rick is pointing out: a)Full disclosure of all terms and parties that are part of the agreement b) A resolution to dissolve the contract if either party is no longer satisfied with the agreed upon terms (fairness to both sides).

Further grounds to the claim that the existing system is "dishonest", is the fact that after severing the relationship with an upline in the hierachical distribution system, an agent abandons his book of business. This is to the upline's benefit, and one of the reasons that it is kept close to the breast.

Sunlight is a good antibacterial agent. I think it is high time we demand FULL DISCLOSURE. Full disclosure will thus reveal release protocol, and thereby allow the agent informed consent.

 

[retread]

Joe, I do admire and respect you on your cool responses to some hard questions. However, you did ignore my interrogation into how you arrived at marketing expenses you say you incur as an FMO.

I went back over your former post (#11 "Contracting Questions) and note that you attribute $100k to "recruiting expenses". In this thread (#20) you say your office expenses run $200k. I am surprised at, after spending $100k/year in recruiting costs, that I or many other agents on this board (ostensibly, from the remarks posted) have not heard of you before.

If, then, $100k is spent on recruiting and it is not yielding much penetration, perhaps you should re-examine where you are putting your money.

The other $100k of your office expenses must have at least some component of marketing other than recruiting. Where is this money going? You have not replied to my inquiry into how much you spend on sales aids, training, leads, and other items of sales support that would justify loyalty from your downline.

I am amazed that half your expenses go to recruiting. I am more amazed that half your expenses go somewhere other than sales aids and recruiting. (You can't count sales material which is supplied at no cost to you by the carriers you represent.)

Just exactly, how much of this $100k is your expense for sales support? Most of us never see any sales support from our FMOs... If you actually provide sales support describe it, please.

Also, you can't count commissions to your downline, because this is paid by the carrier, unless you are saying your income is the gross amount paid by the carrier(s). Commission expense is a therefore a pass-through. Your income is simply your cut. Commissions due your downline is never yours, it is theirs... (unless you can find a way to take it from them ).

It would be interesting to find out where our money goes in the FMO system.

 

[Newby]

About a 2-years ago when I wanted to pick up my first final expense companies. Up until that Time I had sold funeral preneed only.

I was very green as to how the FMOs, GAs and all the uplines worked. I was told good things about Shenandoah and Continental Life of Brentwood from someone who's opinion I trusted. This was going on at the time that Forethought was just in the designing stage of their final expense product.

I called Continental Life first since they were within driving distance of me. They had me come out to a training day, paid my hotel room and bought me one of the best steaks I've ever tasted.

Continental Life had about 8-different final expense products. They were a confusing mess to try to figure out when you would use one over the other. No one at the home office of Continental seemed to know ANYTHING about final expense. They were all interested in teaching me the Med Sups and Contintial Care Plans but they all were clueless on the final expense. And I talked to all of them.

Then I called Shenandoah to contract with them. They said I had to go through an agency. They names several and I picked Joe Moore randomly. When I called Joe and his son Greg, they actually knew what they were talking about. They taught me which companies had products that fit different situations. I didn't have to read all night or make spreadsheets to figure out who had the best rates for what I was looking for. It helped give me a good start.

When my Oxford commissions lowered, Joe gave me a quick release with no problem and no questions asked. They have been fine to work with.

I do believe that agents should NEVER be trapped within an upline. But we never are. There are too many companies to choose from. You just switch products if you find yourself in that situation.

In my experience, Joe Moore has been a good experience. If I contract anything new with them, I will know to get a fair written agreement about releases. And he will know in turn not to spend any money on me.

So the point of my rant is; I had a BETTER experience contracting with a good FMO (Joe Moore) than I did contracting direct with a company (Continental.) I get about the same commissions with each. So what do I care if I'm direct ot not?

 

[senior-advisor-indiana]

I have recieved an email from Joe advertising Shenedoah. I have spoke with him on the phone. He seems like a good guy and I have an above street contract in my email that comes from them. I am waiting to see how this thread goes before I send it in. I am on the fence and one reason why I would send it in would be Newby, no offense Joe.

 

[Winter_123]

I have recieved an email from Joe advertising Shenedoah. I have spoke with him on the phone. He seems like a good guy and I have an above street contract in my email that comes from them. I am waiting to see how this thread goes before I send it in. I am on the fence and one reason why I would send it in would be Newby, no offense Joe.

Nevertheless, all of this smoke and hub-bub about FMO's and whether Joe is a good guy or a bad guy is part of a larger process where Joe comes in on his horse and ends out recruiting agents all while stating that that is not his purpose. It is what it is. I am guessing that Joe would be willing to continue this discussion about FMO's for quite a while. Why not? When people say that they are now contracting with Joe, and these are only the ones you hear about, versus the background activity, it only confirms the obvious. Doesnt mean Joe isnt a good guy, ot that it isnt a good contract or whatever but lets be clear about what is going on. It's about Joe's marketing plan, not FMO's.

Winter

 

[Mr supplemental]

It's not only poor or mediocre agents that want releases. That has mostly been my experience though. Some GA's and FMO's are idiots.

 

[GreenSky]

It's not only poor or mediocre agents that want releases. That has mostly been my experience though. Some GA's and FMO's are idiots.

I agree, however I do not consider myself either a poor or mediocre agent yet I was unable to get released by two FMO's. One was and is dishonest enough to not pay me my renewal commissions as punishment for leaving him (AGA) and another caused WellCare to terminate my contract (RBI).

I've found a couple of guys that are honest. I recommend Ramiz although I have no contracts through him. I have almost all my stuff thru Ritter and have moved contracts to him just as my way of thanking him for his honesty.

Rick

 

[Joe Moore]

I have posted this on a thread by itself, but thought it may also get some attention on this thread. This is very important, please take time to read.
Joe Moore

Our e-mailing machine is running right now notifying all our contracted agents, and prospective agents that we have e-mail addresses, of a delay of the "New Vista" Shenandoah Final Expense product, that could be the premier final expense product in the industry.

I am at my home computer, and do not have the exact content of the e-mail we are circulating, but will try to post it tomorrow from the office.

As we are one of the largest promoters of this product in the country, and we were personally involved with its development, I received a call at about 12:15 this afternoon from Shenandoah telling me the September 2nd release of this product was being delayed. We have called some agents and agencies that we were aware of that were planning to spend big dollars on this product.

If you are contracted with Shenandoah, and whether you are contracted through us or not, please do not spend your money at the present time promoting this product until it is finalized. We have probably already spent enough for us all. I will be attending an IMO meeting with Shenandoah in Palm Beach Sept 25-28, hopefully the plans for this product will be finalized by this meeting.

I will try my best to keep you informed of what is happening with this product.

This post is being put here to hopefully stop any dollars being spent at the present time by recruiters and agents until we are sure where this product is going.

 

[senior-advisor-indiana]

NO feedback on the thread Joe?

 

[Joe Moore]

Joe, I do admire and respect you on your cool responses to some hard questions. However, you did ignore my interrogation into how you arrived at marketing expenses you say you incur as an FMO.

I went back over your former post (#11 "Contracting Questions) and note that you attribute $100k to "recruiting expenses". In this thread (#20) you say your office expenses run $200k. I am surprised at, after spending $100k/year in recruiting costs, that I or many other agents on this board (ostensibly, from the remarks posted) have not heard of you before.

If, then, $100k is spent on recruiting and it is not yielding much penetration, perhaps you should re-examine where you are putting your money.

The other $100k of your office expenses must have at least some component of marketing other than recruiting. Where is this money going? You have not replied to my inquiry into how much you spend on sales aids, training, leads, and other items of sales support that would justify loyalty from your downline.

I am amazed that half your expenses go to recruiting. I am more amazed that half your expenses go somewhere other than sales aids and recruiting. (You can't count sales material which is supplied at no cost to you by the carriers you represent.)

Just exactly, how much of this $100k is your expense for sales support? Most of us never see any sales support from our FMOs... If you actually provide sales support describe it, please.

Also, you can't count commissions to your downline, because this is paid by the carrier, unless you are saying your income is the gross amount paid by the carrier(s). Commission expense is a therefore a pass-through. Your income is simply your cut. Commissions due your downline is never yours, it is theirs... (unless you can find a way to take it from them ).

It would be interesting to find out where our money goes in the FMO system.

Retread,

We have spent many dollars that go nowhere. In other words, we have made some bad decisions and blown the money with no results. Every marketer had experience this at one time or another.

But, in this industry it is like investing dollars with bad direct selling leads. That money is gone with no way to get it back.

Every recruiter's dream is to find all producing agents, contracted at the highest commissions available and 10-15% overrides. But the truth is, if we have 1 out of 5 contracted agents writing business at the pace of at least one policy per month we feel fortunate.

For awhile we had 3 lady recruiters in our office (at $50-60,000 a year costs). I realized one day we had a serious problem in our office when one of our recruiters (that had been working for us around 1 1/2 years) had a question from a prospective agent about term insurance. She turned to me and asked, "We don't have term insurance, do we?" Even though I felt she was trained well enough to talk to prospective agents, and was instructed to turn the phone over to me or my son if the questions got tough, I was floored by this. Needless to say, she is no longer with us.

Our website, www.asurco.com has a term calculator on it and had been up about 12 months when this happened.

I am not going to get into where every dollar we spend goes. I will agree not all of our dollars have been spent wisely. It should be apparent I have used rounded figures in my statements. From year to year our income and expenses vary greatly.

I will say we have been in this business long enough to have a comfortable living now. I am not rich, but I am not poor-I started in this business 21 years ago broke as a church mouse (after going broke as a real estate agent with about $1 million worth of property-mostly mortgaged, an IGA supermarket, a mobile home sales business, and a computer forms sales business, and interest rates jumping to 21% with a lot of debt).

If I quit right now there are enough renewals to last awhile. But, I don't look at the renewals as current income.

I look at renewals as a reward for prior jobs well done.

As far as training, sales aids, etc., I will readily admit we suck. We do not concentrate on this. Our focus is on the experienced agent that does not need hand-holding to accomplish their goals. We do not have the personnel to train. This is left up to the capitive shops or companies that pay much lower commissions than can be obtained through organizations such as ours.

Hopefully this somewhat answers your questions.