What to Watch Out for in Picking an FMO

Louise shares a cautionary tale of partnering with the wrong insurance agency early in her career as an independent agent. After leaving a 20-year position at Humana, she was eager to control her book of business. An FMO agency recruited her aggressively with promises of a generous base salary, 36% commissions, and free leads to help her get started.

Within a few months, however, red flags emerged. The agency was consistently underpaying Louise's commissions and always had an excuse - IT problems, clerical errors, miscalculations. She estimates she was owed around $6,000 in unpaid commissions over 5 months.

Louise also quickly realized the "free leads" the agency touted were recycled contacts from months prior who had no interest in buying insurance. It became clear the promises of leads were a hollow tactic to recruit more agents.

When Louise raised concerns to the original owner, she was given the runaround. After he passed away unexpectedly, problems accelerated under the new management. Louise filed a complaint to recoup her unpaid commissions, but she simply couldn't afford the legal representation required to get the agency to pay up.

Exhausted from fighting, Louise left the agency in search of a better model. A colleague introduced her to The Brokerage - an agency that offered 100% commissions from day one and full book ownership without any lengthy vesting requirements. She finally found a place that treated agents fairly.

From this experience, Louise learned how crucial it is to vet potential agency partners thoroughly before signing any contracts. She advises agents to:

- Review the commission structure closely and get any promises in writing. Don't tolerate underpayments.

- Understand exactly how your book of business ownership will work. Avoid situations where you have to work for years before you own your book.

- Ask for references from current and former agents to learn about their experiences.

- Don't fall for "shiny object syndrome" when agencies promise free leads. Understand clearly where any leads come from and how fresh they are.

- Build organic leads over time by establishing local networks and relationships vs. chasing quick wins.

Finding the right agency partner is essential for success as an independent agent. By doing due diligence and understanding red flags, you can avoid unpleasant surprises that could derail your business. Louise learned this lesson the hard way - don't ignore warning signs.