Negotiating Commission Splits

[NYinsurance417]

Hi Im currently negotiating my commission split with my boss. We are a two man shop he is the owner/producer and I produce part time and will eventually be full time producer. After going back and forth he propsed below. Let me know your thoughts. Also let me know what you think generating the lead alone is worth.


If you produce the lead...and you are the sole producer...50% for John...50% for House.
>>>
>>> If you produce the lead...and you and I both work as producers...30% for John...20% for Mitchel...50% for House
>>>
>>> If I produce the lead and you are the sole producer...0% for Mitchel... 50% for John...50% for House.
>>>
>>> If I produce the lead...and you and I both work as producers.....20% for John...30% for Mitchel...50% for House
>>>
>>>
>>> I will eat the expense of lead generation for both of us. Review and share thoughts.
>>>

 

[Todd King]

If you are paying for the expense of the lead.....no way! Even if you are, it still sounds a bit low to me.
But then again, I don't do employee benefits, so I could be mistaken.

 

[leevena]

It does not appear to be too bad. In addition to the work/knowledge that he will bring to this, what else is he bringing? Specifically, does he provide you with office, a company name, phone services, etc. If he is, than the deal is not that bad.

 

[arnguy]

sbroccoj. could you please use a larger font? The one in your post is difficult to read.

 

[Full Throttle]

That's a fairly common arrangement with the brokerages around here, but as others of said, that assumes they are basically paying your overhead and housing you. If they are producing leads, it sounds like a good deal. Will you be signing a non-compete?

I was offered a similiar deal, but the deal was their leads were split 50/50, their book if I leave. My leads would be 70/30, mine if I leave. However, I would have been bringing over a book and there was no training needed. I didn't go that route, but put it out there for comparision.

If nothing else, it will be an education in the business and you can go out on your own when you feel comfortable and have the resources to do so.

 

[ABC]

It sounds ok to me since you are pt.

I would expect very low production out of you working PT.

This is the truth. You can not learn employee benefits pt.
You need to be around it all day long so you start picking up on whats what.

I have no doubt that you can get some door open by cold calling but you have all of 20 seconds to get contact attention. With out real knowledge of the industry a somewhat seasoned decision maker will know you are green.

Good Luck

 

[NYinsurance417]

Thanks for the replies. I am currently his Account Manger for his 150 accounts. Im trying to negotiate spilts for any cases I get while being a account manger. I should be more of a producer role in about a year. They are pushing 70/30 on anything he goes out on. Isnt that a little low considering im drawing the lead? Shouldnt a lead be worth atleast 20% by itself?

 

[ABC]

Thanks for the replies. I am currently his Account Manger for his 150 accounts. Im trying to negotiate spilts for any cases I get while being a account manger. I should be more of a producer role in about a year. They are pushing 70/30 on anything he goes out on. Isnt that a little low considering im drawing the lead? Shouldnt a lead be worth atleast 20% by itself?

So you are active in the business already. That makes a huge difference.

If you are on salary right now as account manager then the 30% split is fair. Now if you go full time producer then I would re visit the agreement.

 

[Full Throttle]

Thanks for the replies. I am currently his Account Manger for his 150 accounts. Im trying to negotiate spilts for any cases I get while being a account manger. I should be more of a producer role in about a year. They are pushing 70/30 on anything he goes out on. Isnt that a little low considering im drawing the lead? Shouldnt a lead be worth atleast 20% by itself?

Although 50% to the house is common from hearing about other brokerage houses, it always seemed steep to me. I get it if they service all incoming requests (add-ons, terminations, COBRA, ect), provide office space, and technology resources you can use to add-value to your clients. This gives you a competitive advantage and allows you to focus on selling, not servicing.

If any of those components are lacking, I would be hesitant to stay once I learned the business and had some accounts under my belt. That being said, who owns the business once you leave? Get it in writing, because one thing is for sure, you will eventually part ways. The question remains: when?