Override was everything when the MGA business heated up in the late 1990s. Decisions were easier then - the greater the percentage override, the better the MGA. The override numbers skyrocketed, far beyond prudent sustainability.
But, the business has turned the corner. Minimum support at maximum compensation is not helpful for most advisors. High overrides have not encouraged advisors to be more productive. It has not made them better prospectors. They are not helping more people. Advisors are not better than they were.
Maybe the opposite has happened. As gross income per case exploded for most advisors, many advisors became performance dividers and not multipliers. I mean dividing income goals by the new per case compensation and reducing activity rather than multiplying compensation by the old activity level and driving performance. Higher compensation worked backwards for productivity. This will catch up with the business, if it hasn’t already.
Compensation has to be reasonable given your circumstances and the support you need from your MGA. But, it is not the only thing nor is it the most important. Remember the old story about insurance agents, “The best thing you can do for your clients is stay in business.” It’s true for MGAs too. The best they can do for you is stay in business. Compensation has to work for all.
When I managed an MGA, we said “Do you want to compare override rate or gross income?” A huge percentage of zero business is still nothing. That’s why effective MGA support is an increasingly important deciding factor. And I don’t just mean carrier sponsored CE credits or simple business processing either. Those are commodities.
I mean real support. Do they help you get business placed properly? Do they help you improve your critical business skills with real training? Do they pay attention? Are they thinking ahead for you and watching your back? Do they care about you, your business and clients? Are they more than just commission conduits? And, if it’s just incentive trips, be careful. Those may not survive for long.
Finally, just like in the career agency days, good relationships continue to be the most important factor in your ultimate success with anyone. More than any other factor; the relationship you have with your direct contact at a company (sales manager back then) will determine your ultimate success in the business. It’s still true today.
Don’t let your pocketbook do all your thinking if you are making an MGA decision. Your relationship with your MGA contacts is vital to your success and the deciding factor in choosing an MGA. People and relationships are more important than money. Money is cold comfort when you need help and you don’t have it.
A great relationship, top quality business development support and training and commensurate compensation are the major deciding factors in choosing an MGA or even a career agency. In spite of all the changes, top MGAs are a lot like the top career agencies of the past. Today’s best MGAs are really multi-company career agencies. And, it’s not a bad thing.
How do I know if a business coach can help me?
High performance is not an option today. You’re either at the top of your game or you will become irrelevant quickly. Irrelevant advisors don’t last long. The question is how to become high performance. Just try harder or get someone to help? Coaching can be the answer for you, if you are the right person.
Coaching is just having experienced and expert help to determine and achieve your highest level of performance more quickly and effectively than you could on your own. Your coach is your potential activator and accountability partner.
Coaching can help if: You’re stuck at a level of performance and can’t get ahead – despite doing all you know how to do. You are inconsistent – your performance is hot and cold and you don’t like the swings. You have excess capacity in your operation – you know you can do more with your time and staff than you are achieving. You need a new approach or are entering a different market – and want to get a fast start. You want a breakthrough to another level – you’re sick and tired of being sick and tired.
But, unless you are ready for coaching, you’ll just waste your money and annoy the coach. Not everyone is a candidate for coaching either. Coaching only helps if you are: Committed to the business and your part in it. Ready to be and do more than you have done. Serious about high performance and the effort and discipline it requires. Can make good use of advice – are coachable. Prepared to work diligently while being coached. Have the open mind and courage to change what you are doing in favour of new ways to get ahead. Have the patience to let new systems work for you.
There are many different approaches to coaching but I believe that your coach has to follow a goal achievement strategy so you make good progress. Your coach should take you through these key steps: Results – what does success look, feel and sound like to you? You need a very clear picture of the puzzle if you want to put it together. Understandings – what are the underlying rules you work by? Your values, standards and beliefs may even recalibrate the first results you considered. Targets – what are the interim and ultimate activity, performance and production objectives you have to meet to achieve your desired result? Break down your goal into achievable goals. “By the inch it’s a cinch, by the yard it’s hard”. Finally, Actions – what different actions will you build into your daily activity to generate the necessary targets? If you keep doing what you’ve been doing, you’ll keep getting what you’ve got. No magic there.
A good coach will help you achieve more, faster, learn more from the mistakes of others, make better decisions, build a winning attitude and achieve your highest possible performance. Ultimately, it’s a big improvement over just “trying harder”. Be bold and be great.