Unique Dilemma

[NJ-Producer-to-be]

20+ year insurance veteran (u/w, acct mgr, inside sales, consultant). Have been told by my new agency that I'm to begin outside sales along w/salaried acct mgmt duties. Have been told that I have to market to financial planners, cpas, attorneys to get referrals as a trusted advisor. Doesn't want me marketing, cold-calling etc to anyone but high net worth advisors as that is agency's niche. Wasn't aware of the niche when I joined the agency. My mistake. Now I'm turning my long-time circle of influence away as they don't meet the agency requirement of high net worth.
Legally, while still working for this agency, would I be able to start my own website catering to the middle-class and the coverage that it needs while still trying to adhere to my employer's guidelines? I would then broker my people through another agency that deals with that clientele. I don't see it as a conflict of interest if my people are not the ones the agency caters to but obviously that's just my perspective. Looking for some guidance if you would. Also, is it illegal to start my own lead generating website if I'm employed by an agency? The new agency doesn't believe in that passive type of lead generation but I think I'd be missing the boat if I didn't become involved there. Your thoughts? Thank you for your time, input and wisdom.

 

[VolAgent]

It all depends on your contract with the agency. Your best bet is to consult a lawyer with the contract at hand. But more importantly, even if it is legal, what is the agency going to say? They might ask you to choose between them and your outside ideas. If that is the case, which are you going to pick?

You could try to keep it from them, but if securities are involved, then you are required to inform them of all outside business activities (OBA). That is a sure way to get in trouble. Also, think of it from their perspective. How would you feel if the new employee you just hired told you he/she was going to start an outside insurance agency/website? Would you be ok with your new employee spending their time and energy on this? Your concept may not compete with their business, but it will certainly compete for your time and attention.

 

[xrac]

VolAgent is absolutley right. I think that there is no way your current outfit is going to be happy. If I were you and I did it I would make sure I did not have a non-compete and I would plan on going INDY soon. If you do it it would probably be a situation where you start it up, get it going, and walk away from your current gig.

 

[NJ-Producer-to-be]

Thank you. I understand what you're saying. My intention isn't to underhand the current agency or compete w/them for their niche business. I just wanted to have an outlet for being able to help my current, long-time circle of influence. No securities are involved.

With respect to the website idea to generate my own leads, has it been your experience that independent agency producers are not allowed by their agencies to have this kind of lead generation system? It just seems an effective and efficient way to help me along the path. This issue isn't addressed in the employment at will contract.

Thank you again.

 

[VolAgent]

I do not believe you are being underhanded at all. I believe you are being completely above board. However, I think you failed to grasp the point I made. Being in insurance is having your own business, but the agency system is the franchise method. So, I'll use another analogy to illustrate what I mean.

Imagine you just purchased a new McDonald's franchise in your town. In exchange for the name, support, marketing, etc. the regional manager stipulates that you must actively manage the restaurant for at least 5 years. That way you'll learn the business, McDonald's processes, etc. Now, imagine two months after opening the franchise you go to the regional manager and tell him you are going to open and help run an independent dry cleaner in your town. These two business are even farther from competing than your agency and your idea.

Now, you've agreed as part of the franchise contract to actively manage the McDonald's franchise. But here you are two months later telling McDonald's that you're going to open a new business. What do you think McDonald's is going to think about this?

I don't care how much or how little energy and time you devote to your website. Every minute you spend on it is a minute you could have spent on the agency's goals. You have limited time and energy, and now you are competing against the agency for your effort. That is the issue.

Now, that said, no one knows what the agency's reaction to this might be. Assuming you properly limit your time on the website, they may be ok with it. There is only one way to find out what their reaction will be, ask them. However, I would suggest waiting at least a year before you embark on the website idea. Also, you need to be prepared to walk away from website or the agency. There is a good chance the agency will make you choose. Don't forget, at will employment goes both ways. They can let you go for any reason, or no reason at all. They just cannot do it for an illegal reason.

Thank you. I understand what you're saying. My intention isn't to underhand the current agency or compete w/them for their niche business. I just wanted to have an outlet for being able to help my current, long-time circle of influence. No securities are involved.

With respect to the website idea to generate my own leads, has it been your experience that independent agency producers are not allowed by their agencies to have this kind of lead generation system? It just seems an effective and efficient way to help me along the path. This issue isn't addressed in the employment at will contract.

Thank you again.

 

[NJ-Producer-to-be]

Points taken, Vol. Thank you for your time and your thoughts. All the best.

 

[VolAgent]

Good luck with whatever you decide. After all, they may even be ok with it.

Points taken, Vol. Thank you for your time and your thoughts. All the best.

 

[arnguy]

Of course, you can run run it by our esteemed member, Pre-Paid Legal, but....just be careful.