Building Value and Commissions Through Partnering and Subagents


Brokers looking to move their agency to a higher level have many options — ranging from basic to advanced — but in all cases centered on building business relationships that can produce significant results over time. Below are my recommendations.


Creating an override on sales from subagents is an opportunity for some brokers. Brokers who like to recruit and manage subagents and have products that are competitive and can be sold to existing clients are an ideal fit. When a buyer is looking for in-place systems that have organic growth potential, an override revenue stream from a subagent network adds value to an agency. Buyers who have products to add to the downline agents look to an established subagent network as a significant opportunity. This is an agency growth opportunity which leads to both higher commissions and eventually greater value to buyers. The more buyers you can attract the more offers you will get and the higher purchase price you will close on.


Working with other insurance professionals who also do health insurance is a threat which can be addressed while protecting your clients.

The first natural fit is Property & Casualty Insurance (P&C): Some brokers are in the position to either hire someone with this expertise or find a trusted agency or professional and enter into a mutually agreeable arrangement. Most health brokers with group clients look for ways to partner with a P&C agent. A friendly P&C agent or agency is a defensive move to prevent clients moving their health business to their P&C broker. The ideal P&C relationship is one where trust is high and a fair sharing of revenue is agreed upon. Never work with a P&C broker who is captive to one carrier or is an employee of an agency that also offers employee benefits. As for Medicare, be careful when working with a P&C broker who sells auto and homeowners but may also reach out to your clients for Medicare plans.

Financial planners: The temptation is high for health brokers to sell life and annuities and in some states, there is no added licensure needed. The added income is a welcome bump to the bottom line. This is especially true when an existing health client asks for help with financial planning. Individual life as well as fixed and indexed annuities are a viable income source that is hard to pass on. To be proficient in financial products it is important to find a general agency (GA) to work with on case analysis and design. A GA, or field marketing organization (FMO), will do this work at no cost and many times provide leads making it worth the effort to partner. On the other hand, managing money and selling variable products often requires additional licensure, creates more risk for errors and omissions (E&O) and has a downside when a client’s money does not grow as expected.

Variable products take time to perform the required money management process — time you may not have available. If a client experiences a perceived loss due to your advice this may lead to a loss of their health business too. Look to develop relationships with carriers and GAs to collaborate on life cases and fixed and indexed annuities. Outsource to a certified financial planner (CFP) the 401(k), mutual funds, stock picking and money management work. Find a CFP referral partner who meets the ideal collaboration criteria and is open to cross referring and even cross marketing.


Join a broker-friendly relationship that protects your group health clients from a “backdoor” health insurance competitor. Professional Employment Organizations (PEO) offer payroll, human resources and property & casualty insurance as well as employee medical, dental and vision in one package. Some PEOs are broker friendly, but several are not. PEOs that are not friendly compete aggressively against brokers in the market. The ideal PEO partner works well with brokers and protects a broker’sflank. Working with a PEO exposes brokers at some point when clients eventually look at the “perceived” simplicity a PEO offers when including employee benefits.

Many PEOs protect brokers when they share a client. In many cases it is very hard to compete with medical plan rates from a large PEO. For several years now many payroll companies also offer employee benefits directly to clients and without the PEO model. Brokers need to be an advisor for their clients at the level no PEO or payroll company can match.

Opening the door to PEOs and payroll companies you trust shows professionalism when addressing client questions about these options. It is possible to avoid PEOs and payroll companies that compete with brokers since there are several PEOs and payroll companies which are broker friendly.

Remember if the commissions are low when advising a move to a PEO, at least there is compensation and, each year on the group’s anniversary, the door is open to review and analyze options. Make sure any PEO fee sharing is transferable to a buyer in the future as you will be able to sell this revenue at a multiple.

General rule: Buyers will want to know about all referral relationships and those which are transferable will add value.

PHIL CALHOUNpresident of Integrity Advisors, is author of “The Health Broker’s Guide to Protecting, Growing and Selling Commissions”. A free eBook version is available at to California Broker Magazine readers through February 2021.

Phil and his team provide personal coaching on business planning for brokers. Phil’s team includes legal and accounting professionals with experience working with brokers and health agencies. For ideas on growing commissions go to You can also call Phil at (800) 500-9799 or