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In most contracts you will find there is a period of time where you are locked into a group. Let me explain why it exists in P&C and does not exist on the Life side. (If it does not exist with a cluster you find on the P&C side, ask why, or how the group you are joining makes a margin of income from the arrangement you are contractually getting into?)
If a group brings you on Jan 1st, 2020 and you can come and go as you please, that group is going to do a ton of Shiz for you to get you up and running. But for times sake, lets just say the only thing they do is get you access to MUCHO carriers. They get you appointed and contracted with said carriers. PGI has at least 4 full time staff that do just that for PGI agents and it is often labor intense at a few levels for PGI and Carriers (That costs money)
To go through all that and then have you say, "Peace out, thanks for all the work! I am taking my carrier access to start my own thing or rolling my book to someone else" makes no sense. There is no monetary gain for the group or cluster that just bent over backwards to get you up and running.
So, year one you grow your little P&C book to 400k in WP (Or 60k in commission) Lets just pretend you have a 90/10 split with your cluster or group or Aggregator, so they get $6,000 for their role in getting you up and running and after year one you want to bail. The cluster or group is now sitting there thinking, "We hired staff to get them onboarded or appointed with carriers. We gave them access to a full time trainers to teach them how to...., We hired a full time Marketing person to create a logo for them, and a website, and teach them how to fill their pipeline indefinitely, We provided an expensive Commercial lines person to help them write that dentist account for that friend of theirs so they did not look like an ***, and now they are bailing after we have invested $60,000, the agent made $60,000 and AND WE ONLY GOT BACK $6,000!
It does not work on the P&C side like it does on the Life or Benefits side because we all get paid 10-15% a year over the life time value of the client as they renew longer and longer not 130% the First year.
So most groups or clusters lock you in for a time (IMPORTANT: and let you out easily after a time), because they are dirty supporters of Capitalism (Wait- we are all supporters of Capitalism still....correct?) If they don't lock you in for a time the Splits are not as nice or they keep the overrides and or Profit share agreements. Or the contract is written in a way that they make more money in a shorter period of time knowing that you could bail at any time. Or they simply supply you access to carriers and nothing else so they don't have to invest in support staff.
I have been on the carrier side where I have handed over HUGE bonus checks over expensive steak dinners and have had owners take that check, folded it up in his coat pocket and said, "Thanks, but let's make sure none of my agents and staff know about this." ….The model of that group..... Agents can come and go as they please. The agency will make its profit off an unhealthy split and all the extra comp the agents don't know about. - no good at all.
THERE IS SO MUCH MORE TO SAY....IN PROBABLY MORE ELOQUINT WAYS.... JUST DON'T HAVE THE TIME....
If a group brings you on Jan 1st, 2020 and you can come and go as you please, that group is going to do a ton of Shiz for you to get you up and running. But for times sake, lets just say the only thing they do is get you access to MUCHO carriers. They get you appointed and contracted with said carriers. PGI has at least 4 full time staff that do just that for PGI agents and it is often labor intense at a few levels for PGI and Carriers (That costs money)
To go through all that and then have you say, "Peace out, thanks for all the work! I am taking my carrier access to start my own thing or rolling my book to someone else" makes no sense. There is no monetary gain for the group or cluster that just bent over backwards to get you up and running.
So, year one you grow your little P&C book to 400k in WP (Or 60k in commission) Lets just pretend you have a 90/10 split with your cluster or group or Aggregator, so they get $6,000 for their role in getting you up and running and after year one you want to bail. The cluster or group is now sitting there thinking, "We hired staff to get them onboarded or appointed with carriers. We gave them access to a full time trainers to teach them how to...., We hired a full time Marketing person to create a logo for them, and a website, and teach them how to fill their pipeline indefinitely, We provided an expensive Commercial lines person to help them write that dentist account for that friend of theirs so they did not look like an ***, and now they are bailing after we have invested $60,000, the agent made $60,000 and AND WE ONLY GOT BACK $6,000!
It does not work on the P&C side like it does on the Life or Benefits side because we all get paid 10-15% a year over the life time value of the client as they renew longer and longer not 130% the First year.
So most groups or clusters lock you in for a time (IMPORTANT: and let you out easily after a time), because they are dirty supporters of Capitalism (Wait- we are all supporters of Capitalism still....correct?) If they don't lock you in for a time the Splits are not as nice or they keep the overrides and or Profit share agreements. Or the contract is written in a way that they make more money in a shorter period of time knowing that you could bail at any time. Or they simply supply you access to carriers and nothing else so they don't have to invest in support staff.
I have been on the carrier side where I have handed over HUGE bonus checks over expensive steak dinners and have had owners take that check, folded it up in his coat pocket and said, "Thanks, but let's make sure none of my agents and staff know about this." ….The model of that group..... Agents can come and go as they please. The agency will make its profit off an unhealthy split and all the extra comp the agents don't know about. - no good at all.
THERE IS SO MUCH MORE TO SAY....IN PROBABLY MORE ELOQUINT WAYS.... JUST DON'T HAVE THE TIME....
