Trail Commission Vs Heap

[jacobtn]

I typically take the full heap when able. However, with Great American, on one of their products they offer either 6.75 heap, or 5.25 yr 1, with a 12 mth trail of 1.5%, and a 24 mth trail of 1.5%. To me it is no brainer with them to take trail (MOD 03). The 2nd trail is a bonus and if once they hit 12th month I have "heap" at the point.

Opinions?

 

[Todd King]

I think it's a no-brainer too.

 

[0b1kanobee]

That is the option I like as well, just depends on your financial situation ect. ect. Isn't there like 4 options or 2 others besides what you have posted?

Another thing too is that if their is a ROP on the product, you don't get nailed so hard.

How are you liking GA right now? I know some guys writing it fairly heavily for the last year and a half. They have been really strong IMO (GA).

 

[jacobtn]

Since they've rolled out that income sustainer plus I have sold a ton of their safe return. Awesome product.

That is the option I like as well, just depends on your financial situation ect. ect. Isn't there like 4 options or 2 others besides what you have posted?

Another thing too is that if their is a ROP on the product, you don't get nailed so hard.

How are you liking GA right now? I know some guys writing it fairly heavily for the last year and a half. They have been really strong IMO (GA).

 

[Charpress]

I'm not sure I agree with this entirely, but supposedly taking a trail helps with suitability issues down the road if a complaint is brought that the producer was just trying to get as big a commission as possible.

In other words, that the annuity you pushed generated an 8% commission compared to other products that perhaps would have been better but with a 6% commission. By taking the trail, it just seems more like you weren't trying to score big to the detriment of the client.

Any thoughts on this perspective? It has some merit, I guess.

 

[scagnt83]

I'm not sure I agree with this entirely, but supposedly taking a trail helps with suitability issues down the road if a complaint is brought that the producer was just trying to get as big a commission as possible.

In other words, that the annuity you pushed generated an 8% commission compared to other products that perhaps would have been better but with a 6% commission. By taking the trail, it just seems more like you weren't trying to score big to the detriment of the client.

Any thoughts on this perspective? It has some merit, I guess.

It does have some merit imo if the client or their heirs ever question anything down the road....

I am a huge fan of trails.
Its one reason I like VAs, but there are more and more IAs offering at least a few years of trails.

In actuality your cumulative pay is more with trails; but imo your commission is more justified with trails even if it is higher.
The reason being is that you are paid as you go, so you are only paid if the client is still happy and in the product.


But clients only see a higher number in the first year and get all bent out of shape over it (I have had few ever ask me about commissions or accuse them of being excessive).
Its just like term life; people just see the first year and dont even think about the other 19 years.

 

[sman]

I always take trails. Number one, I like the idea of recurring income. I'm not having to continually produce to have income. Number two, I continue to get paid to service the client. Since this is a relational business (although many treat it as a transactional business), I think it works better this way. At least for me. It's nice to know I have a steady income whether I feel like working this week or not.

I am speaking specifically of VA's and not Index Annuities. But I would likely do the same with IA's as long as the math works out as it does on VA's.

I'm not sure I agree with this entirely, but supposedly taking a trail helps with suitability issues down the road if a complaint is brought that the producer was just trying to get as big a commission as possible.

In other words, that the annuity you pushed generated an 8% commission compared to other products that perhaps would have been better but with a 6% commission. By taking the trail, it just seems more like you weren't trying to score big to the detriment of the client.

Any thoughts on this perspective? It has some merit, I guess.

 

[0b1kanobee]

I'm not sure I agree with this entirely, but supposedly taking a trail helps with suitability issues down the road if a complaint is brought that the producer was just trying to get as big a commission as possible.

In other words, that the annuity you pushed generated an 8% commission compared to other products that perhaps would have been better but with a 6% commission. By taking the trail, it just seems more like you weren't trying to score big to the detriment of the client.

Any thoughts on this perspective? It has some merit, I guess.

I don't know how many times a client has asked me how I get paid even after I cover the fact that I'm compensated by the insurance company and it does not come from their monies (like a property being sold). With the trail option, I usually say I'm payed by the insurance company on the performance of the account (performance being them keeping it). I usually say this every time whether I pick trail or not because at the time they haven't purchased yet and I don't know what option I'm going to pick till I send in the papers.

Clients seem to like that answer and I also deflect to some other things like our 6 month meeting whether by phone or in person along with our annual review. I get paid to keep them happy and by servicing the account. I'm always available should the need arise. yada yada yada

 

[Charpress]

I've never, ever been asked by a client how much I get. The closest I have gotten is when someone commented "There must be a lot involved here."

I like your idea of deflecting the question with "It depends on how well it does." or something along those lines.

I had always thought before that if the question ever came I would say "Do you ask a car salesman how much his commission is? Do really care as long as you get what you are looking for at the best price available?" I guess that comes across of being a bit of an A-hole.

 

[lbritt]

I've never, ever been asked by a client how much I get. The closest I have gotten is when someone commented "There must be a lot involved here."

I like your idea of deflecting the question with "It depends on how well it does." or something along those lines.

I had always thought before that if the question ever came I would say "Do you ask a car salesman how much his commission is? Do really care as long as you get what you are looking for at the best price available?" I guess that comes across of being a bit of an A-hole.

I really like the trail option as well. With American Equity you kind of get both with it spread out over 3 payments, which is nice, but I'd be interested in something like 4% and .75% every year the contract is in force or something like that.