Nearly everyone has an investment or insurance product. You may need to purchase a policy to cover your car in order to obtain a license in a particular state. Or you might need coverage to pay their mortgage company for their home. All these are examples of clients paying money to a company to manage the risk of catastrophe or provide a secure future. The premiums paid and the dollars invested are the profits of insurance and investment companies. Money flows like clockwork once clients are acquired. Finding the right clientele is the biggest expense for insurance and investment firms. This is why “agents” or salesmen are employed.
A capitalistic system is one where everyone makes a living by the quality of their work. Agents do not receive compensation based on how many clients they bring to the company. The total amount of the company’s investments or insurance coverage they purchased determine their commissions. Agents only make a profit and live off their clients’ money if the commissions are greater than the cost and effort they put into gaining them. Agents’ survival often depends on their ability to serve current clients by selling new products or replacing or transferring existing ones. Everyone involved is more successful if they can farm the existing clients.
A high failure rate among agents means that few investment or insurance companies would want to take on the responsibility of licensing and training inexperienced staff. To train a good agent, it takes time and money. A good agent is someone who can sell and knows how to keep their company out of trouble with federal and state regulators. Employment firms are often hired by companies to help them find experienced agents who are unhappy with their current job and are looking for a new opportunity. Agents who accept this “opportunity”, however, realize that it comes with a price.
These insurance companies require a list of 100 to 1000 names, addresses, telephone numbers, and income levels from their agents to prove that they have a pool of potential prospects. Companies rarely have any prospects and if they do they are not able to supply them, it is usually from people who have been called so many time that they won’t answer the phone when the insurance company calls. Viable prospects are more valuable than the agent and what the insurance companies want. Companies know that clients who trust their agent will follow them wherever they go.
Agents can leave their parent company for many different reasons. Over the past ten year, there have been many reasons for agents to leave their parent company. Agents who have their own agency or no non-compete agreement are the most highly recruited. This would prevent them from taking clients with them if they leave the company. Agents are often offered incentives to get them onboard. However, unless these promises are made in writing, they are usually gone once all clients have been transferred to the new company. Agents who complain about the reality of their new job at the new company are reminded that they have signed a noncompete agreement and all clients that were transferred to them are now owned by the company. They can also be fired for any reason. The company chooses the premium income over the short-term unemployment benefits when comparing the cost to a few more employees.
The new mandatory sales targets with the threat of lower commission rates appear as the agent contemplates the wisdom of moving to the new company. These quotas demonstrate that the company does not value the agent’s abilities to effectively serve clients and work in their best interest. The company can cut commissions if the agent fails to meet unattainable quotas. This effectively makes the agent homeless. The agent who decides to quit the company is reminded that the non-compete agreement states that they will not be able to contact their clients for up to two years. The agent is responsible for all costs and labor associated with acquiring these clients.
Insurance and investment companies who practice the deceitful process of client body snatching are not interested in agents being long-term employees. After stealing clients and disposing agents, clients are assigned to customer service or sales departments. These teams often include newly licensed staff with extensive sales training but little product knowledge. Clients’ interests are no longer served, and the companies are only interested in the profits they make. Companies can increase their income by not having to pay renewal fees or commissions, nor health and retirement benefits for the agents who have been resigned.
When clients are taken from agents who are good at their job, only the investment and insurance companies win. The sad fact is that clients often don’t know about or care about this loss. Many people believe that the agents disappeared because of some fault. Worse, agents now have fewer opportunities to find work because they can’t contact their clients. They must rebuild their clientele. The welfare of lowly agents who have been taken advantage of is rarely a concern.
