Benefits Buzz
Are You Working with a True General Agent?
Posted on July 26th, 2018
Recently, we’ve been exploring the role of General Agents and addressing some of the common misconceptions that people often have about them. There’s no question that working with a General Agent (GA) can be extremely beneficial for insurance brokers. However, not all GAs are created equal.
There are different types of arrangements out there and not every organization that represents itself as a GA meets the necessary criteria. When looking for a GA to work with, it’s important to look for a “true” GA.
So, how can you tell the difference? We’ve put together a list of questions to help you tell the difference between a true General Agent and a Revenue Sharing Brokerage disguised as a General Agent.
Who is the broker of record?
True GA – The broker always remains the broker of record.
Revenue Sharing Brokerage – The Revenue Sharing Brokerage is the broker of record.
How are commissions handled?
True GA – The broker receives full compensation and bonus payments directly from the insurance carrier.
Revenue Sharing Brokerage – Earned commissions are split between the broker and the Revenue Sharing Brokerage. The broker is generally paid from the Revenue Sharing Brokerage which allows them to maximize their bonus potential to make up for the split commissions. At the Revenue Sharing Brokerage’s discretion, brokers with higher sales volumes may receive some portion of the bonuses o¬ffered by the carriers.
What happens if the relationship ends?
True GA – If the broker parts ways with the General Agent, the broker remains tied to the client and will continue to receive full commissions.
Revenue Sharing Brokerage – The Revenue Sharing Brokerage is the broker of record, so if the relationship ends, the broker will not receive any future commissions.
Who owns the client relationship?
True GA – The broker maintains the relationship with his or her clients. The General Agent’s client is the broker.
Revenue Sharing Brokerage – The Revenue Sharing Brokerage works directly with the client and becomes the owner of the relationship.
Are there any costs for the services provided?
True GA – True General Agents provide an array of services at no cost to brokers or their clients.
Revenue Sharing Brokerage – The services provided by the Revenue Sharing Brokerage are funded by splitting commissions with the broker.
As you can see, when working with a General Agent, it’s crucial to determine exactly how the relationship will function. Some arrangements offer substantially reduced commissions in exchange for assuming ownership of the client. True General Agents will always let the broker retain both 100% of the commissions and ownership of the client.
The choice is clear—working with a true GA is the most profitable and efficient solution for brokers and their clients. The Flex General Agency is a true GA, and we provide a wide range of products and services to help brokers succeed. All our services are provided at absolutely no cost to brokers or their clients.
Want to grow your business with Flex?
Reach out to a Flex Sales Consultant to discuss how we can take some of the operational burdens off your shoulders, allowing you more time to focus on sales opportunities.
Contact us today to get started!
Learn more about what we can do for you at www.flexmarketplace.com
Join Our Mailing List
Benefits Buzz RSS Feed
