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Top Red Flags to Look Out for in Agency Networks

Feb 28, 2023 | Brandons Column

Thinking about joining a network but want to make sure it’s right for you? Here are the top red flags to look out for to avoid joining the wrong one.

But first, yes, I’m a Sales Leader for an agency network and a former Carrier Rep. I can confidently say that not all networks are created equal. I’d rather you be informed and prepared than caught in a situation you would regret.

Of course, I consider PIIB to be the best! But even if you don’t join us, you should know what to look out for in any agency network.

An agent will typically reach out to a network when there is an immediate need: a new market, better Profit-Sharing, or advocacy on behalf of their agency. Most networks can provide instant gratification regarding those needs, but at what cost?

 You joined because you needed the market, but maybe you had your blinders on and overlooked some of these potential red flags that could creep up as your agency grows.

 Transparency is key.

Red Flag #1: You don’t own your book of business

Networks that take part of your book can be really flashy with the promises they make. But ultimately, giving up part of your book of business can cost you hundreds of thousands of your hard-earned cash in the long run.

If you started your agency to enjoy the freedom of having your own company, you’ll want to put on your Pumas and run far away from a network that wants to own part of your book.

Instead, look for one that allows you to stay completely independent.

Red Flag #2: You don’t know how to get out

Harsh penalties for ending your contract are a huge red flag to look out for when considering an agency network.

Always read the fine print and ask what their terms to end the contract are before you join. I’ve heard nightmares from agents being stuck in contracts requiring them to buy back their book of business (without knowing they didn’t own 100% of it) or getting blocked from carriers for up to 18 months.

At PIIB, we’re transparent upfront. It’s $5,000 to join and $5,000 to leave with a 90-day notice. I consider this onboarding and offboarding because we have to undo everything, we do initially to get you started if you leave.

Especially if you want to sell your agency down the road, we can work with your goals and increase your price tag so you can make the most of your sale.

When you sell your agency, we keep things running smoothly as you transition, wish you the best, and your business is always 100% yours. There are no surprises or vindictive traps.

Red Flag #3: You can’t get in contact with your network

Therapist Brandon is here to remind you – communication is key to a healthy relationship. Okay, I’m not a therapist, but this is true!

Nobody wants to be ghosted by their network. Now, we don’t meddle in your business or tell you how to run your agency, but if you need help or want guidance, we’re a phone call or email away.

You deserve better if your current network doesn’t keep you in the loop with carrier changes or incentives.

At PIIB, we always communicate with our members about what can benefit their agency without information overload.

Red Flag #4: Your access to carriers is used to intimidate you to stay

This red flag is the hardest to look out for because “if you leave, we’ll block your carrier access” isn’t something a network is going to outright tell you in your initial conversation to join.

Sadly enough, it does happen, and it’s the most disturbing tactic I see from networks that take advantage of their members.

To avoid getting into a network like that, ask seasoned independent agents about their experience with networks to get an honest review, or feel free to reach out and ask me to share my thoughts.

I’m not here to make enemies with other networks; there will always be pros and cons. But I believe the industry could use more transparency, and I can share the good, bad, and ugly our members have experienced before joining PIIB.

You can also look at insurance forums on Facebook and sites like Reddit to see what’s said “behind closed doors” about popular networks.

Of course, you can’t always believe everything you read online, but in cases like this, it can be helpful.

Red Flag #5: You’re not sure how you’re getting paid

Again, this can be hard to decipher from an initial conversation. Any network will tell you about their commission, bonus, and profit-sharing structure.

What’s important to ask about is the transparency of how they calculate what they pay out to you. Does their network offer a detailed report that shows how you’re paid? Is there someone you can ask?

Some agents consider this reporting a no-brainer, while others are happy just to get paid without looking into the numbers. But the problem arises if you feel like your profit sharing starts to seem low, you consider going to another network. Then suddenly, your network says, “Oops, we actually have another $8,000 you were supposed to receive.”

Mistakes can happen – but mistakes can be avoided with accurate and transparent reporting.

Contact me; brandon@piib.com if you are interested in getting more tips like this



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