New Agent - Cluster Questions

[cgreene]

I almost went with them but they do not give enough options. They can't guarantee you any contracts so if you are looking for 4 or 5 carriers they might be a good fit. However we need 25 nationwide.

 

[INSUREDUDE88]

Risky too me; I was captive 20 years and now been independent for the last 6. Clusters limit your control and ability as an independent business person and growth potential IMO. if you want the freedom and flexibility to roam and they can provide you service support for your clients go for it, but if you want to truly be independent, make your own decisions, control your long term career then run your own agency; you can get most of the company affiliations you need to start on your own and those you can't get you can go to a 'aggregator' to place that business. Get your self a mentor who is currently independent or get a referral to a company rep to help guide you. A lot of those company reps are also former independent agents who understand it all.

 

[agentinsouth]

Risky too me; I was captive 20 years and now been independent for the last 6. Clusters limit your control and ability as an independent business person and growth potential IMO. if you want the freedom and flexibility to roam and they can provide you service support for your clients go for it, but if you want to truly be independent, make your own decisions, control your long term career then run your own agency; you can get most of the company affiliations you need to start on your own and those you can't get you can go to a 'aggregator' to place that business. Get your self a mentor who is currently independent or get a referral to a company rep to help guide you. A lot of those company reps are also former independent agents who understand it all.

Also- you will see a cluster go out of business every few years and then those agencies are SOL.

 

[bps]

Where in NC are you located?

 

[cgreene]

My cluster group is great I have insurance carriers that I have my own contracts with so I am not limited then we also have her own contracts the life and health. The cluster group just gives us many more companies to offer our clients.

 

[RicFlairII]

There are a lot of things to consider,

My nephew is an atty, I just showed him two cluster contracts,
as I am thinking of joining one to pick up some new carriers.

He nixed both of them, for example both contracts had a clause
in the fine print that the cluster could end the contract for any reason.

He pointed out, what if you got sick and were in the hospital for, say,
two months? They could drop you and you would be stuck with nothing.

Just one example of many things you have to look out for.

 

[agentinsouth]

There are a lot of things to consider, My nephew is an atty, I just showed him two cluster contracts, as I am thinking of joining one to pick up some new carriers. He nixed both of them, for example both contracts had a clause in the fine print that the cluster could end the contract for any reason. He pointed out, what if you got sick and were in the hospital for, say, two months? They could drop you and you would be stuck with nothing. Just one example of many things you have to look out for.

Did your nephew also explain that the personal guarantee in those contracts also continues even after your agency closes for any reason.... In other words, if you close it, you are still in the hook and not free from the contract!

 

[cgreene]

You should have a contract lawyer review every cluster agreement.

 

[cfuller4080]

Where in NC are you located?

I am located in Raleigh.