Even though State Fund’s commissions are the bottom of the barrel, people will still be outraged when they see what the commissions are. Little will they ever realize that a huge portion of those commissions go to expenses and with State Fund’s 5.5% commission rate, almost all of that goes toward expenses since the commission is so low and the time it takes to process a renewal. Beleive it or not, most people expect you to work for free for them (hypocrites who have no problem making money themselves but how dare anyone else make money).
I know of another company who is doing the same thing, but their commissions are much higher. Again, little to they realize how much of that goes to expenses. Now they are going to want something extra from you like a commission reduction or extra favors or who knows, maybe even a kick back.
This is not a good trend, we need to get our organizations who represent us working for us to stop this. What we make is our business, especially since most people do not know what it takes to set up an inusurance agnency, let alone keep the expenses. For some reason to society, it is wrong that we even make a dime.
So you’ve got a problem disclosing to your customer the expenses you charge to your customer? Help me with that. Realtors disclose their fees. Mortgage brokers disclose their fees. Accountants disclose their fees. Bankers disclose their fees. What professional service in a distribution channel in any industry doesn’t disclose their fees?
Let the sun shine in! If you can’t justify it, maybe it IS too much. If you won’t take the time to justify it with your customer, maybe you’re embarassed by the operating margins in your shop.
Maybe the fees are too high. Or maybe you’re selling the real value you bring to the transaction short and you can justify your present fees. The only way to find out is to let the market set the fee schedule based on free and open competition.
By the way, I can do what you do better and for 3 points less.
From my experience in the last few months, our agency started disclosing commissions recently, most insured’s don’t really care what the agency makes. Realistically, they’ve always know that the agent makes money or how else would we stay in business? Some clients have complained but there’s nothing we can do since rates & commission levels are mandated by the state. Personally, I do not see the purpose in disclosing commissions. Do you ask how much the retailer makes on that dress, pair of shoes, TV or any other item that you purchased? Of course not because you know that the store has to make money or go out of business.We should be concentrating on serving our clients not pandering to the government agencies who want to drown us in paper.
I make 300k a year. Bill Gates makes hundres of millions a year. Bill Clinton makes over a million a year. This is America, it is no crime to make money nor is it wrong. To the contrary, the more one makes the more jobs they create.
Some people thinks everyone should make the same money. Societies fail when the don’t implement a true capalism and a free market economy allowing people to make as much as they can. That is why America is so great.
The problem is, we have too many socialist here who think it is a crime to make a dime. They don’t use their brain and like I said, it is okay for them to make a dime, but how dare does someone else make a day.
Nevertheless, all the power to rich, let’s make sure we encourage more people to strive for their dreams and become rich instead of cave into losers of society who are bent out of shape if anyone make over 50k a year.
Don, they aren’t talking about disclosing individual salaries, they’re talking about disclosing commission on individual policies.
I agree with IndAgent, there are too many socialists who feel that they should be the only ones living in $5-10 million dollar homes & flying off on vacations every week. The rest of us better stay in our place & eat beans & rice for dinner every night.
Thank you Don. We should also want to know the full pro-rata revenue for each employee. The bottom line is, you dealing with hypocrites. They would probably say that their salaries are private information, but then they will have another excuse for my our commissions are not private information. Typical San Francisco liberals.
This is a classic case of government types trying to interfere with the contractual relationship between the broker and his client. Although I will alway disclose my fees and commissions to my clients, if requested. I don’t need the State Fund to tell me how to run my business. I resent the “holier than thou” attitude of the State Fund. The next thing you know, the companies will be doing the same thing.
The independent agency system is in serious jeopardy. Once again the companies are trying to tell us how to run our business. They traditionally do a terrible job running their own business.
I would just like to point out that the Salaries for all State employees, including the ones that work for State Fund, are listed on the Internet. Either through the Department of Personell Administration, or through State Funds own website.
Of course they have the same issue that you do. Once people see how ridiculously low their pay is, they most likely will still complain that they get paid too much and think that they should work for free.
Oh, and by the way, I would recommend you ask the associations that represent you, what their positions on this matter are. I believe you will find that most of them are behind this move.
Even though State Fund’s commissions are the bottom of the barrel, people will still be outraged when they see what the commissions are. Little will they ever realize that a huge portion of those commissions go to expenses and with State Fund’s 5.5% commission rate, almost all of that goes toward expenses since the commission is so low and the time it takes to process a renewal. Beleive it or not, most people expect you to work for free for them (hypocrites who have no problem making money themselves but how dare anyone else make money).
I know of another company who is doing the same thing, but their commissions are much higher. Again, little to they realize how much of that goes to expenses. Now they are going to want something extra from you like a commission reduction or extra favors or who knows, maybe even a kick back.
This is not a good trend, we need to get our organizations who represent us working for us to stop this. What we make is our business, especially since most people do not know what it takes to set up an inusurance agnency, let alone keep the expenses. For some reason to society, it is wrong that we even make a dime.
Hopefully they will also disclose the ones that pay us zero commission.
So you’ve got a problem disclosing to your customer the expenses you charge to your customer? Help me with that. Realtors disclose their fees. Mortgage brokers disclose their fees. Accountants disclose their fees. Bankers disclose their fees. What professional service in a distribution channel in any industry doesn’t disclose their fees?
Let the sun shine in! If you can’t justify it, maybe it IS too much. If you won’t take the time to justify it with your customer, maybe you’re embarassed by the operating margins in your shop.
Maybe the fees are too high. Or maybe you’re selling the real value you bring to the transaction short and you can justify your present fees. The only way to find out is to let the market set the fee schedule based on free and open competition.
By the way, I can do what you do better and for 3 points less.
Have a nice day.
From my experience in the last few months, our agency started disclosing commissions recently, most insured’s don’t really care what the agency makes. Realistically, they’ve always know that the agent makes money or how else would we stay in business? Some clients have complained but there’s nothing we can do since rates & commission levels are mandated by the state. Personally, I do not see the purpose in disclosing commissions. Do you ask how much the retailer makes on that dress, pair of shoes, TV or any other item that you purchased? Of course not because you know that the store has to make money or go out of business.We should be concentrating on serving our clients not pandering to the government agencies who want to drown us in paper.
I make 300k a year. Bill Gates makes hundres of millions a year. Bill Clinton makes over a million a year. This is America, it is no crime to make money nor is it wrong. To the contrary, the more one makes the more jobs they create.
Some people thinks everyone should make the same money. Societies fail when the don’t implement a true capalism and a free market economy allowing people to make as much as they can. That is why America is so great.
The problem is, we have too many socialist here who think it is a crime to make a dime. They don’t use their brain and like I said, it is okay for them to make a dime, but how dare does someone else make a day.
Nevertheless, all the power to rich, let’s make sure we encourage more people to strive for their dreams and become rich instead of cave into losers of society who are bent out of shape if anyone make over 50k a year.
I want to know every salary at the state fund from CEO to mail clerk.
Don, they aren’t talking about disclosing individual salaries, they’re talking about disclosing commission on individual policies.
I agree with IndAgent, there are too many socialists who feel that they should be the only ones living in $5-10 million dollar homes & flying off on vacations every week. The rest of us better stay in our place & eat beans & rice for dinner every night.
Thank you Don. We should also want to know the full pro-rata revenue for each employee. The bottom line is, you dealing with hypocrites. They would probably say that their salaries are private information, but then they will have another excuse for my our commissions are not private information. Typical San Francisco liberals.
This is a classic case of government types trying to interfere with the contractual relationship between the broker and his client. Although I will alway disclose my fees and commissions to my clients, if requested. I don’t need the State Fund to tell me how to run my business. I resent the “holier than thou” attitude of the State Fund. The next thing you know, the companies will be doing the same thing.
The independent agency system is in serious jeopardy. Once again the companies are trying to tell us how to run our business. They traditionally do a terrible job running their own business.
I would just like to point out that the Salaries for all State employees, including the ones that work for State Fund, are listed on the Internet. Either through the Department of Personell Administration, or through State Funds own website.
Of course they have the same issue that you do. Once people see how ridiculously low their pay is, they most likely will still complain that they get paid too much and think that they should work for free.
Oh, and by the way, I would recommend you ask the associations that represent you, what their positions on this matter are. I believe you will find that most of them are behind this move.