Commission Splits

[broberts1963]

I am in the state of Indiana. There is a major crop insurance agency that wants me to refer business to them. They are willing to split commissions. I am mainly in the financial advisory and investment business but do have all my insurance licenses including p&c. I am going to work with a new ag consulting group in my areas of expertise.

Any issues or thoughts with this? I am thinking that I would need to sign each crop insurance application. Though our offices are 3 hours apart, there should not be a problem with that.

[broberts1963]

Anyone please?

[FFA]

50/50 depending on level of involvement. If you are going to hit it and quit it, no renewals. If you are going to work the renewal, then 50/50 on renewals.

[broberts1963]

Thanks. So there is no special license other than having the p&c? Also an agent can split commissions with another agent even if the agent has no involvement in the client?

[Island Girl Agent]

Most states say that you can split commissions with another agent as long as that agent has the correct license for the line of coverage you want to split commissions on...and crop insurance is simply the P & C license so if both parties carry that license, you should be fine. You can also easily set this up in your agency software by adding the other agent as a producer.

[broberts1963]

Thanks for the reply. I do not have any agency system as I do not currently offer p&c. I am mainly an investment & financial advisor. I do know crop insurance is a whole ballgame in itself. I plan on working more in the agriculture field as they services that I can offer.

[FFA]

Dont really need an agency system. Dont get me wrong, it is nice to have. What did agents do prior to an agency system? Paper Files, a tickler system by month (3X5 cards in a recipe box), write things on a monthly planner ect...

Get your P&C license, start kicking doors open for your broker pal and start making some extra $$$. X Mass is coming and I am sure you like every other Joe / Jane out there could use some extra $$$.

[broberts1963]

FFA,

I already have my p&c license. Reference above posts.

[Rainmaker]

First and foremost I encourage you to scope the relationship with the other broker. Specifically, what will be your roles, how will you work together, how long will the commission split/fee be paid, how much, and what rights do you have if the broker sells his business to someone who may not want to continue the split!

During my production career (19) years I did a lot of splits - both ways. I learned from experience that having an agreement in writing is key to the relationship prospering and being sustainable. I also learned that having a 3 year or 4 year term to the split was best as opposed to a perpetual/ongoing split.

I would suggest you propose a 3 or 4 year deal somewhere in the 25% to 35% range with this broker.

Food for thought. Hope this helps!

[broberts1963]

Thanks for the replies!

[Steley123]

I have made it a policy to always be willing to trade value for value. Quantifying reciprocal value will typically answer the question. That said, I have always found that paying it forward returns value to me beyond my original expectations. It's just good mojo.