No Residual Income. Is This Standard?

[mufusmorgan]

Hi,

I recently acquired my life/health/p&c licenses and I'm looking to make a move into the insurance industry.

I have an offer on the table from a local Allstate office. The person who would be hiring me has several offices within a 30 mile radius.

He appears to be a nice guy and I'm sure I can learn a lot from him at this point in my career.

My question is whether no residuals is standard practice, as one of the main reasons I'm getting into the business is so I can set myself up with residuals.

He's offering a small monthly salary (enough to scrape by on), and health insurance. Commissions would be split and there would be no residuals. I imagine that's because of my salary and benefits. At 3-5% on P&C and no residuals (apparently the core of his business), I'm wondering if this is a good move.

I know changing industries has its challenges, but do you guys think this is reasonable for someone with a good amount of sales experience looking to change careers? Is the potential to make good money there? Are there questions I'm not asking?

Thanks, I look forward to your feedback.

 

[DHK]

If you want residuals, you need to OWN the office, not work FOR one.

That said, you need experience. I'm sure there may be worse ways to get it.

 

[mufusmorgan]

If you want residuals, you need to OWN the office, not work FOR one.

That said, you need experience. I'm sure there may be worse ways to get it.

I appreciate the reply. That answers my question about residuals. With the information I've provided, do you believe this is a good first opportunity?

 

[VolAgent]

His office, he can do whatever he wants as long as it is legal.

If you are successful, this almost certainly is not going to be your last job in insurance. Call it tuition.

And I have seen pay plans from agents be all over the place, it really is just up to the owner and what he or she feels like offering and you agree to.

 

[Markthebroker]

I'm an independent agent. I don't own an office. I get residuals. Most independent agents do not own their own office, and they get residuals.

I started out captive as an employee (which is what you are doing) and learned the ropes on someone else's dime. Then I went independent. Most agree its the best way to do it. Is the opportunity you are looking at the best? I don't know. But, if you are looking to own your own book eventually, whether you end up captive or independent, you are starting in the right scenario.

 

[cruhm1971]

I have a brokerage that pays me 50% new and residual on home and auto and 30% new and renewal on commercial. While there is no salary, you get residual for life. You could do 30 hours s a week at Starbucks or Home Depot with benefits while building your business. I'd also look at getting into Medicare. You may want to check out smartchoiceagents.com as well. They offer an opportunity to own your own book.

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I appreciate the reply. That answers my question about residuals. With the information I've provided, do you believe this is a good first opportunity?

I don't think this is a good first opportunity. What's the do not compete? As soon as you get a new gig, it will be like starting over again. And if you have a compete clause, your friends and family you write won't be able to come to new gig.

 

[traceyemoon]

While I understand the own your own book sooner rather than later point by heading out on your own now, I would not , did not do that. Why? I learned a lot about what to do to and not to do here (DHK has a great new agent post), but learned so much more from working for a local agency. I get hourly & benefits, started by assisting our senior agent with his business (mostly Medicare and some Life), then appointed producer for Life & Health sales in the agency. Commission shared with the agency, and a higher % if I sell Life on a prospect that I bring in with marketing or for a group.

You can do what you choose, but ask how everyone else go their introduction to selling and how many mistakes they made starting out. Who did they turn to for advice?

You could also consider "shopping" around other local agencies to see if there is one you would like working for more than another. I work for a small-ish independent agency, so I got experience working with a number of different companies until I decided which ones I would prefer to contract with.

Either way, good luck!

 

[BADTROUT]

Employees I pay 75 new and 75 renewal for first year... second year 70/70 third 65/65 down to 45/45 through the rest of their career.

For sub agencies I go up to a full 90/90 split.

Go independent!

 

[mufusmorgan]

Thank you all so much for your valuable feedback. I think I'm going to move forward, with the understanding that it will be a good opportunity to learn, not "get rich". I can always go independent once I've worked out the kinks and have a greater understanding of how the business works.