Insurance Advisors Are Making the Wrong Demand

Between our coaching services, involvement with the National Association of Health Underwriters (NAHU), and frequent speaking engagements, we get an earful. We regularly hear brokers demanding that their legislators, associations like NAHU, or anyone with perceived influence somehow, some way help them get their old commission/bonus schedules back.

Honestly, I get the demands at a certain level. Along with the demand, I hear the rationale, “Our clients are more demanding than ever. We need to be paid more to provide the level of service and provide the resources our clients need.” 

That’s very true. In fact, I couldn’t agree more. But the question that has to be asked at the same time is, “Who should be paying you for what?”

More than one way

You deliver value to clients in two basic ways, which means you need to expect to be paid in two different ways.

You have always helped, and been paid for, delivering insurance solutions. But you figured out a long time ago that simply delivering insurance solutions is no longer enough. This is why you have made such significant investments into other resources (you might call them value-added services; we prefer the term non-insurance solutions).

However, instead of seeing the ROI potential of your investments and charging fees for the additional value you now deliver through those non-insurance solutions, most of you give these services away for free!

And, therein lies my problem with this demand of “give us more commission.”

Let’s get real

Commissions are not payment for the value you deliver your clients. In a very literal sense, commissions are payment for the value you deliver to the carriers by helping to distribute/service their product.

Yes, they have a responsibility to pay you fairly for doing that job, but that’s where their responsibility ends. It is not their responsibility to pay such rich compensation that you can go out and buy products/services from other companies and then give them away for free, effectively on the carrier's dime.

Carriers pay you for distributing insurance. Clients should pay you for the additional value you deliver to them through the non-insurance solutions.

A more reasonable demand

I realize some of you operate in states where you’re not allowed to charge fees. THIS is what needs to change.

If you are going to demand that legislators, NAHU, etc. help with anything, demand help getting the ability to charge fees for the new ways in which your clients expect and need you to deliver value.