New Senate report on agent commissions

[EckoRomeo]

I have that guy blocked. All he does is take a contrarian view of anyone he responds to. His purpose in life appears to be to argue with anonymous people on message boards.

This guy doesn't like opposing opinions and is somehow proud of it… lol

Why even post this??? You have me blocked. Mission accomplished, right??

But that's not enough…You want people to join your feeble protest.

lol

 

[sman]

That is what an FMO wants you to think. In reality it's the same or more.

I'm not new to this game. I know what I've gotten going direct and what I get through my FMO. My contracts are higher through the FMO except for the carriers who require you to have a downline of a certain number of agents to get it.

 

[EckoRomeo]

I'm not new to this game. I know what I've gotten going direct and what I get through my FMO. My contracts are higher through the FMO except for the carriers who require you to have a downline of a certain number of agents to get it.

Now he's arguing with anonymous people on a message board.

Oh the HORROR!!!

I should block him, right?

 

[DonP]

High vol agents are getting money from carriers and fmo's

A pretty important thing to remember here is that FMO's are technically working as a distribution partner for carriers. Any agent incentives they offer are to create more distribution for the carrier so the carrier pays them more money. Feel about that how you will but, that is the function of an FMO. Not to provide value to an agent.

That said, some FMO's are in it to make a lot of money and not add value to their agents. Some would rather add value to their agents and be compensated by the carrier for doing so.

As far as the huge OR dollars being reported, I assure you those are for the Integrities and Amerilifes of the world. They keep a cut of that and pass it down to their partner FMOs. From there, those partner FMOs pass it down to agents or other FMOs that are underneath them. Sometimes you can have 5 or more layers of FMO before you reach an agent. That is where I see the problem. The reason Integrity can exist is because carriers are paying for that kind of distribution channel.

There are a lot of different FMOs that do a lot of different things. You should find one that does what you need it to do. In NC I am competing against a few other FMOs that do different things. One pays and sets up welcome to Medicare meetings for new agents. Another just pays out a ton of override and has their own platform that does ACA and Medicare. The 2 others I run into don't do much of anything.

We provide all of the baseline stuff everyone else does but we like to have personal relationships with our agents, we have set OR tiers so no one has to come and ask us for extra comp, we have clear contracts with time limits on when we provide releases (not that we do it all that often), and we are direct with 90% of our carriers and are not rolled up under any other upline. Some people want that and some don't care.

You can be upset about how the model is set up but wouldn't it be better to know that it's not going to change and you should find the relationship that works for you?

You're correct it's 4-5 layers deep gif . Example in fe the head nmo 155% then he has big fmo at 150% then they have under them 145% . Everyone's happy with there 5% and protection from debt roll up. Now in fe those are carriers not govt paid . They cal do what they want . In Medicare and aca the govt has a say in compensation to agents . As you said the problem is all the different deals the Fmo's , integrity's and Amerilife's . It just like when a carrier gives an agent $10 k to sell their plan . Or a fmo pays $150 override to sell this carrier over that carrier . It will bias some agents

 

[MedicareWAA]

As far as the huge OR dollars being reported, I assure you those are for the Integrities and Amerilifes of the world. They keep a cut of that and pass it down to their partner FMOs. From there, those partner FMOs pass it down to agents or other FMOs that are underneath them. Sometimes you can have 5 or more layers of FMO before you reach an agent. That is where I see the problem. The reason Integrity can exist is because carriers are paying for that kind of distribution channel.

My comments are about Advantage plan sales. Not life or annuities or etc.

Jim, you make a fair point about the highest rates going to the mega-FMOs with many downline tiers. BUT … there are plenty of large agencies who get the same or better terms without having anyone under them. They get the money because they write a lot of business, not because they have more agencies to share the money with.

If I create a 200 agent phone agency, I'll sell maybe 85,000 MA plans per year. An entirely different contract menu opens up for me simply because I have leverage from my sales volume. My unit economics aren't much different. I'm not really a FMO. I'm just an enormous sales agent who found a way to use my market power to extract more value for myself.

The unique contract I negotiated now gives me tremendous power over my smaller competitors who have similarly complex businesses but not as much volume. And I have a wild advantage over some small mom and pop broker who gets street comp and maybe some free leads from his upline.

Also, my special contract is going to come with all sorts of supposed services I need to provide for the carrier, but those are the things every agency is responsible for doing. Any agency is expected to train its employee agents on compliance, to coordinate their annual certifications, and so forth. That's just part of running a business with employees.

I don't think the typical FMO creates enough value to justify their overrides, but I'm convinced these quasi-FMO phone agencies absolutely do not. They just write enough MA business to extract more money from carriers and play by a different rulebook.

 

[Jim Wright]

Tell me one useful thing an FMO does for a seasoned agent?

We just had 20 of ours that are on our advisory council in town to tell us what we do well and what we need to improve. We also take suggestions from previous meetings and show them how we've improved and what steps we've taken to accomplish them.

All of them are seasoned agents and they chose to work with us for a reason. I can't tell you all of their reasons but if they didn't think we added any value, they wouldn't work with us.

I'm sure you're going to argue that the overrides should go straight to you instead of the FMO but that's not how it works.

It seems that you've been burned by an FMO before and I'm sorry for that but I cannot stress enough how different all FMOs are. If we were the same as everyone else, my job would be pointless and everyone I talk to would say no to me. As it stands, that doesn't happen so we must be doing something right.

 

[Jim Wright]

I'm convinced these quasi-FMO phone agencies absolutely do not.

I'm definitely in agreement there.

 

[EckoRomeo]

If we were the same as everyone else, my job would be pointless and everyone I talk to would say no to me. As it stands, that doesn't happen so we must be doing something right.

Just because an agent chooses to contract with you doesn't mean anything when the current industry structure basically requires it. That's why FMO's sued to stop the rule changes. Had those gone through, few (if any) veteran agents would have been worse off. I definitely would have made more under those proposed commission changes.

 

[Medicare bro]

We just had 20 of ours that are on our advisory council in town to tell us what we do well and what we need to improve. We also take suggestions from previous meetings and show them how we've improved and what steps we've taken to accomplish them.

All of them are seasoned agents and they chose to work with us for a reason. I can't tell you all of their reasons but if they didn't think we added any value, they wouldn't work with us.

I'm sure you're going to argue that the overrides should go straight to you instead of the FMO but that's not how it works.

It seems that you've been burned by an FMO before and I'm sorry for that but I cannot stress enough how different all FMOs are. If we were the same as everyone else, my job would be pointless and everyone I talk to would say no to me. As it stands, that doesn't happen so we must be doing something right.

I get what you are saying. And I appreciate what you are saying. I know that's not how it works, and no system is perfect. No matter what industry someone is in they will feel they are getting an unfair treatment. Having said that I'll put you on the spot what does your FMO do better than others?

 

[DonP]

My comments are about Advantage plan sales. Not life or annuities or etc.

Jim, you make a fair point about the highest rates going to the mega-FMOs with many downline tiers. BUT … there are plenty of large agencies who get the same or better terms without having anyone under them. They get the money because they write a lot of business, not because they have more agencies to share the money with.

If I create a 200 agent phone agency, I'll sell maybe 85,000 MA plans per year. An entirely different contract menu opens up for me simply because I have leverage from my sales volume. My unit economics aren't much different. I'm not really a FMO. I'm just an enormous sales agent who found a way to use my market power to extract more value for myself.

The unique contract I negotiated now gives me tremendous power over my smaller competitors who have similarly complex businesses but not as much volume. And I have a wild advantage over some small mom and pop broker who gets street comp and maybe some free leads from his upline.

Also, my special contract is going to come with all sorts of supposed services I need to provide for the carrier, but those are the things every agency is responsible for doing. Any agency is expected to train its employee agents on compliance, to coordinate their annual certifications, and so forth. That's just part of running a business with employees.

I don't think the typical FMO creates enough value to justify their overrides, but I'm convinced these quasi-FMO phone agencies absolutely do not. They just write enough MA business to extract more money from carriers and play by a different rulebook.

I thought your were just a writing agent ? Do you a hierarchy of agents under you?