Compromising Money & Ownership?

There is one key question you should ask any aggregator before you join: What type of appointments will I have access to? Varying carrier appointments mean very different things when it comes to access, earnings, and ownership of that business. Before you sign on the dotted line, ensure you understand all the differences laid out below. Don’t end up surprised when it comes time to service, get paid on, or transfer a policy.

What are the different types of appointments?

  1. Wholesale/Brokered – You write business directly through a wholesale company or MGA. Some networks have programs where you have to provide quote activity to a specified party and that party acts as the binding agent.
  2. Producer – You are appointed underneath another agency as a producer and bind policies using that agency’s code.
  3. Direct – You have the authority to bind and issue policies directly on the carrier portal, your name is on the DEC page, you have access to profit sharing, contingencies, and growth bonuses, and you have underwriter access.

What are the main differences between appointments?

Compensation

When it comes down to choosing what kind of access you want, compensation is typically the first thing on your mind. It should be easy to determine what, how, and when you are getting paid.

  • Wholesale/Brokered: A typical industry average is 10% (with exceptions).
  • Producer: You usually get a base commission of 10-15% when you join a group. Certain carriers offer more, some upwards of 17%. Because you do not have a location-specific code as part of your Producer access, you will not qualify for profit sharing, which is why most networks that only offer producer access do not offer profit sharing at all.
  • Direct: You have access to base commission plus bonus opportunities, profit sharing, marketing resources, and spiffs. To see examples and to learn what you can qualify for independently or with a cluster, we recommend you click here to see ASNOA’s latest webinar with UFAA.

Service & Binding Ability

The difference in service capabilities comes down to one distinction: How much freedom do you have to service your clients?

  • Wholesale/Brokerage: You operate within a third party’s workflow with no authority to service the client on your own. You also may not appear on the DEC pages.
  • Producer: You also have to follow the agency’s workflow you are writing under, but you have the authority and credentials to make endorsement changes. You are unlikely to be represented on the DEC pages.
  • Direct: Gives you the most freedom; you use your own process to service clients, you have your own credentials to sign into carrier portals, and you are on the DEC pages.

Production Requirements

  • Wholesale/Brokerage: Typically, no production requirements just activity.
  • Producer: Similarly, requirements are just for quote activity.
  • Direct: Industry averages between $50k – $250k.

Carrier Support

  • Wholesale/Brokerage: GA/MGA rep with typical high turnover.
  • Producer: No rep, you will have to go through the agency or aggregator.
  • Direct: You have a dedicated rep and underwriter.

Time to Launch (When you can write business)

  • Wholesale/Brokerage: Days to a week.
  • Producer: On average about one week.
  • Direct: On average about four to six weeks with a vetting process involved.

Ownership/Equity

  • Wholesale/Brokerage: You are likely to own the business or will be, at minimum, listed as the Agent of Record. However, transfers may prove to be difficult.
  • Producer: It is unlikely that you own the business, however you may contractually have ownership based on the network. If you are not listed as the Agent of Record and ownership is only designated in your aggregator contract, this may cause extra hoops to jump through when you go to leave, so ask networks upfront how this is handled.
  • Direct: Typically, you own the business. However, pay extra attention to any contractual obligations, such as exit clauses, if/when you want to leave and/or transfer ownership.

 

For more in-depth descriptions and examples, we encourage everyone to watch the latest UFAA education webinar where Kevin Rigsby, ASNOA’s Agency Development Director walks through the differences in access, earnings, and ownership for each type of appointment.

 

These are important distinctions to clarify before joining an independent network; not all networks are as forthcoming with the type of access you get. At ASNOA we do not make you choose just one type of appointment. We want to give you the best opportunities to grow your business as you see fit. Our goal is to help provide the resources and support you need for sustained success. Learn more by emailing grow@asnoa.com, or giving us a call at 866.484.9849.

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