The 'Broker Fee' business model is no longer thriving, at least in California, where agency/broker now has to be strictly defined. Agents cannot charge a fee, broker's can, but have to prove or acknowledge that there has been extraordinary work done to warrant the fee. At one time, maybe 10 years ago, agencies that could charge fees were plundering clients and that in many cases, the fee income exceeded commission income. This resulted in a major consumer backlash because the majority of those paying fees were from the lower economic demographic as well informed consumers would run away from an agency adding an extra $50+ to a new policy just because they could.beyert1 wrote:I have been going back and forth on charging a fee for service like many of the Agents do. My problem, unlike "Smalltownagent" is that I have new offices all around me. In the last 2 years 5 new offices have opened up within 2 miles of my office. Many of these are former captives who did not make it and since they have invested so much into their license they figured might as was well give it a try being an independent. The challenge becomes how do I compete against agents who represent the same companies I do? Does the company care? Nope. They just want the policies sold.
As for having a brick and mortar office, I am thinking about giving mine up. I don't have clients who come in anymore. I have lost all my agents because they stopped making any money and it is just me in a 400 sq ft office. I hardly have any clients who come to my office, maybe 2 a month and I deal with most of my clients via email, phone and Skype. What is this telling us? The personal touch is going away from this business. I bet I could sit naked at my desk, not a pretty picture to think of to be honest, for a day and no one would know because they would not come into my office. I am waiting to hear," well you are not doing enough advertising and the like." Well, if you think spending almost $4,000 on mailers, emails, traveling to car dealerships, mortgage brokers, banks, real estate office and anyone else who will listen to me is not advertising then I must be an idiot. I keep asking my accounts reps what is working for other agents since my actions are not working and I love the answer - "You know, I just don't know because it is slow for others as well." OK, if it is slow for them why are you telling me I need to do more business? I am at a loss.
As for needing a lonely brick and mortar office when you perceive there's less of a need for a main street presence, there is a growing trend to do what you're proposing. If you value your privacy at home, then indeed, a meet-up at Starbucks or its equivalent can fulfill a face to face need.
The success or failure of promotional efforts is, at least in my opinion after reading about such ventures here and listening to nearby agency owners, is largely a function of geography. In smaller locales, where a personal touch is still appreciated, then 'old' media may still work. In larger population areas, where competition is stiffer, then nothing may work. You also need a volatile population where people are constantly coming and going and need to contact a local insurance source, and if there's a lot of population stability, that works against your promotional efforts.
None of this is the end of the world for smaller independent agencies. It's just a very changed world that may demand lowered expectations and changed tactics in order to survive. My prognosis remains the same, however, fewer and fewer small insurance retailers going forward, through no fault of the agency owner, just due to society's changing needs and expectations in the narrow context of personal and small biz insurance products.