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As I have posted before,I currently own a small financial advisory company which includes financial planning, investments, and life/disability/LTC insurance. I am also integrated with a CPA and we plan on rolling out business services in the future.

There is a local small P&C agency that has asked me to be a "sub-agent" for them. Although they are with Erie, they do have a few other carriers as well. Although I do not know if they are the right fit, I would be interested in doing this with someone. The idea is to split commissions both ways (the main agency owner would be licensed with me to receive splits on referral business to my firm and visa versa).

I would as well meet with prospects for P&C and be the "frontline" person; however the current agency would provide the back office thereby eliminating my need to build one within my own organization.

With this in mind, what would be a good proposal I could make as far as commission splits? Right now I am not considering who "owns" the clients. I just want to first know what is a good mutual program for the both of us.

Thanks!!!

Random ideas slammed down in 30 seconds:

You seem to be looking for some kind of standard. Industry standards are irrelevant here. Just because 1,000 people do something in a certain way does not mean you should.

They came to you, let them come up with the proposal. Ask, "What would this arrangement look like?" then shut up. Let them talk. Answer questions with probing questions. Don't be too fast to jump in.

This is a negotiation. Don't focus on the deal yet. How well do you know each other? Is this really an organization you want to partner with? Focus on building a relationship and trust.

You talk about a "good mutual program." Get off that mindset. You worry about you and let them worry about them.

Just my quick thoughts...

Scott,

I certainly appreciate your thoughts. I would have thought there would at least be some kind of range. Your idea about a relationship is great and I've got a couple of agencies I'm in talks with now. That will bear a lot on my decision as I want to make sure it is a professional firm.

The "mutual" comment does have some credence. For example, if they happen to refer investment clients to my firm, then the agency principal will have his license and we'll share in those revenues. He will be licensed under my firm.

This idea is good as many times referral programs tend to tilt towards one party. For example, my firm has no where neat the number of clientèle that a p&c agency would. At least both parties would have compensation and that might take some worry out of the process and make sure that either party is being compensated.

Best

This was one thought from an agency owner in another locale:

"If you are providing a name and attending an introductory meeting and a little groundwork, then a 50/50 split is very beneficial to you. If the agency owner is requiring you to do all of the work from start to finish, and his office & staff are strictly acting as backup if you are unavailable, then the split should be 75/25 or 70/30 in your favor."

Just an idea from another source.