How Do You Start an FMO?

[newbie2001]

Hey all,

Just a general question, not looking to start one at all haha. You see a lot FMO's out there these days small and large.

They employ staff, hold multiple state agency licenses, etc.

Is it just the natural progression as an agency grows or are some organizations starting specifically as "marketing" companies to contract agents, give a little support, and collect an override?

Curious about everyone's 2 cents.

 

[Jim Wright]

Hey all,

Just a general question, not looking to start one at all haha. You see a lot FMO's out there these days small and large.

They employ staff, hold multiple state agency licenses, etc.

Is it just the natural progression as an agency grows or are some organizations starting specifically as "marketing" companies to contract agents, give a little support, and collect an override?

Curious about everyone's 2 cents.

Depends on what kind of FMO. The ones that appoint agents LOA and take some of their commissions of the top are pretty easy to start as long as you have an appointment with a carrier.

If it's an FMO that is going to let their agents contract direct with carriers and keep full commission, you need a lot of existing volume. Enough volume to be getting overrides on your business to pay for staff, tech, marketing, etc.

 

[DonP]

Honestly I believe most agency's especially in the Medicare space better going under a large fmo and split the overrides . Large Fmo's in that space need many employees like compliance , marketing , contracting , commission accounting etc . Some of these larger Fmo's employ 50-100 people . Few few agency's even in fe direct to carrier . Better off pooling vol and going under someone with much less production requirements and higher commissions

 

[newbie2001]

Honestly I believe most agency's especially in the Medicare space better going under a large fmo and split the overrides . Large Fmo's in that space need many employees like compliance , marketing , contracting , commission accounting etc . Some of these larger Fmo's employ 50-100 people . Few few agency's even in fe direct to carrier . Better off pooling vol and going under someone with much less production requirements and higher commissions

That's what im getting at.

It must cost a bundle to get an FMO started. Then to continue to pay all of your employee's salaries...

 

[DonP]

That's what im getting at.

It must cost a bundle to get an FMO started. Then to continue to pay all of your employee's salaries...

Yes you're better off going under somebody and leveraging their employees . Or if in Medicare the real moneys in Loa's . Base salary $500 a week and $100 an app . You provide all leads and keep the renewals . So in addition to your regular override ( difference between the $313 and the $100 you give them )your getting $125-$150 override per app . But your also keeping the $26.08 a month renewal and possibly get $5 a month renewal override . Much of your marketing is covered with carrier and fmo marketing money . But you'll need office space, and an assistant to help you. You also must fig out a way to keep leads flowing daily to keep people busy . There's huge money in the Medicare loa model but it's a shit ton of work . You also need a commission tracking crm like agency block and a booking keeping outfit to pay the agents .

 

[Jim Wright]

That's what im getting at.

It must cost a bundle to get an FMO started. Then to continue to pay all of your employee's salaries...

For the FMO's that shave commission and keep overrides and barely offer anything to their agents, some can make a ton of money. Doing it the right way costs money

 

[newbie2001]

Yes you're better off going under somebody and leveraging their employees . Or if in Medicare the real moneys in Loa's . Base salary $500 a week and $100 an app . You provide all leads and keep the renewals . So in addition to your regular override ( difference between the $313 and the $100 you give them )your getting $125-$150 override per app . But your also keeping the $26.08 a month renewal and possibly get $5 a month renewal override . Much of your marketing is covered with carrier and fmo marketing money . But you'll need office space, and an assistant to help you. You also must fig out a way to keep leads flowing daily to keep people busy . There's huge money in the Medicare loa model but it's a shit ton of work . You also need a commission tracking crm like agency block and a booking keeping outfit to pay the agents .

I think everyone on this forum pretty agrees that Medicare call centers can't keep business it's a racket. All you'll get is DSNP's and most of those can't change anymore.

 

[GoPokes]

How do you start? You appoint a downline agent, typically by demonstrating that you will add value in some form. Maybe an agent just needs contracts and others want leads and training.

Downline could be LOA or independent.

Call yourself an FMO, and you're an FMO.

You may need contract levels above street, butt that's not always necessary. You may be able to contract an agent, who already has a downline, and then you grow quickly.

 

[goillini52]

Call yourself an FMO, and you're an FMO.

Yes, depending on his pronouns, he can identify as a FMO.

 

[newbie2001]

Yes, depending on his pronouns, he can identify as a FMO.

I mean I'd say your more of a GA or MGA at that point…