Need Viewpoints from a Hypothetical.

[thenewb]

Ok, I am currently working for a small agency offering Health and Life products. I do not have an office, supplied computer/printer, or leads. My split is 60/40 their way. I have no problem with the owner, as he is a great person.

My question lies, however, with leaving and starting my on independent. I am intending to start with just ancillaries and disability, supplementing with Life sells. I am curious if it legal and ethical to, while off the clock, solicate business owners (that I already have a relationship with). With the intention to get commitments prior to opening up my shop. I understand the difficulties with looking for business this way, but if I obtained a few it would help in the initial start-up phase. By the way, I do have a non-compete and would respect and obide by the contract.

So, do you think this legal/ethical? Any viewpoints would be great.

Thanks!

 

[Mark]

What does your non-compete say? Does it say you can do this?

 

[Josh]

It is not ethical.

If you want to leave, then you should leave and start your own shop. That non-compete most likely includes a clause which would prevent you from being able to legally "take the clients with you", even if you just built the relationship.

Folks are going to disagree with me, but that doesn't change that it would be unethical for you to do what you're setting out to do. Especially if when you say "off the clock" you are implying that they are paying you a salary.

Again, if you wan to leave, leave, but what you're suggesting is not good business. Could you get away with it? Probably.

You might also want to have a discussion with the agency owner to talk about the situation and ask him what he thinks. I'd be prepared to leave that day if I were you though.

 

[tins]

IMO, it would be ok to get your independent contracts set up before leaving. Get them all in place to make a smooth transition. But do not start contacting businesses or clients until you have fully made the break.

 

[VolAgent]

Josh is right. You should honor your contract, if its is legal.

But you really should move on. If he is not giving you anything but you only get 40%, its a horrible deal. I'd go into his office and tell him that needs to change, or its time to move on.

Now, if you are getting a salary, then that does change things. The split might not be so bad.

 

[ABC]

It's not ethical to starting prospecting until you leave.

 

[thenewb]

Thank you for all the viewpoints!

I am not getting a salary but an hourly. And a very small one at that.

I agree with setting up contracts but not clients. I want to start on the right foot and doing something that could even be misunderstood as shady is not how I would like to be seen.

My non compete just states "clients are clients of the agency" and that I dont compete for 24 months.

 

[Josh]

If you're getting an hourly then 60/40 in their favor is great. If you were commission only then that *might* be a different story, but if the guy is paying you an hourly rate then you should be working for him and him alone.

 

[leevena]

My first reaction to your business plan (the products you have identified) was not good. Unless you can generate significant amounts of new business it will be very difficult to make a living on these products. You should look at all types of employee benefits. Additionally, you should seriously consider adding voluntary benefits as a core package of your offering to every group that becomes a client. Many brokers leave considerable amounts of $ on the table by not doing this.

A 60/40 split is not bad if you are getting something in return, so while you are not getting a computer, office or leads...what are you getting, other than a salary?

If you are seriously considering going out on your own, you may want to consider a working relationship with a other's who can refer business, but not compete. For example, a P&C producer, a life producer, etc.

 

[thenewb]

Yes, absolutely. In addition to what I mentioned, voluntary would be a product that I would like to offer.
And these would just be a starting point. Hopefully to expand later.
Other than salary (slightly above minimum wage), I get access to a printer when I bring in my laptop, the availability to have company on my appointments, and access to their product contracts.

Would companies be apt to have a broker for major medical and a seperate for the products I've mentioned?
I suppose it would depend on the relationship. Curious about others's opinions.

Thanks.