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How Independent Agents Can Choose the Best FMO

Isi has been a successful insurance marketing director, specializing in senior market products and helping independent agents succeed.

King's Highway, Hawaii

King's Highway, Hawaii

Working with IMO, FMO, and NMO

As an independent insurance agent, it is important to have the best possible relationship with the best possible FMO, IMO, or NMO. Unfortunately, and especially for new agents, many may not understand what the meaning of IMO, FMO, or NMO is, or what these organizations are supposed to do. It can be difficult to tell which ones are best, especially when they are constantly bombarded with phone calls from hundreds of marketers. To add to the difficulty, many agents do not even know what these terms mean, so first, let's review the terms:

  • IMO: Independent Marketing Organization
  • FMO: Field Marketing Organization
  • NMO: National Marketing Organization

These terms are basically interchangeable, and many firms go by more than one. For this article, we will stick to FMO. An FMO is like a brokerage in a way. These firms have built relationships with many insurance carriers, and the best have been around for many years and worked with thousands of agents nationwide. Usually, an FMO will specialize in a specific sector of the insurance market. Insurance carriers rely on these organizations to help them appoint agents and to get product information out to agents. The best FMOs also help insurance agents with their administrative needs, educate them on products, and keep them abreast of current developments, trends and regulations.

Most FMOs, large or small, are comprised of manager(s) marketers and administrative support staff. Marketers or Marketing Directors should be professionals who excel at helping agents get the best contracts with insurance carriers. Marketers are sometimes also agents themselves and may even be able to help agents overcome hurdles to contracting, provided the agent is in good standing or can improve their status.

What have we here? Choosing for FMO carefully

What have we here? Choosing for FMO carefully

The Best FMO Will Have an Independent Agent's Best Interest in Mind

There are many reasons to choose an FMO carefully, and the first is their impact on the "Bottom Line". Without a good FMO, agents are not likely to get the best compensation. The best FMOs can get higher-level contracts since they bring in many agents to write business for the carrier. Most of the bigger carriers will not appoint independent insurance agents directly, but will rely on FMOs to bring agents in. If an agent calls a carrier about getting an appointment, they are likely to be directed to a local FMO or brokerage. FMOs are paid by the carriers in the form of overrides, and are expected to provide administrative services to agents and to recruit and handle the onboarding process for the carrier.

The best FMOs also have marketers with expertise in helping independent insurance agents with quotes, and with finding the right product for a particular client’s needs. Not every marketer will be an expert, especially if they are new, but they should be able and willing to say, “I don’t know, but I will get that information and get back to you.”

The agent's role is to be in the field selling insurance, and the best FMOs have Marketing Directors who care for their agents and look for ways to make an insurance agent's job easier and more profitable. The best FMOs will make themselves accessible and happily answer questions and provide direction.

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Agents need to get paid! Get paid well by finding the right FMO.

Agents need to get paid! Get paid well by finding the right FMO.

What Does a FMO Do?

The best FMOs make sure their independent insurance agents get paid well and are also responsible for providing information to the agents on new products emerging in the market. Most insurance carriers will contact the FMO first with all of the latest product information, pricing structures, changes to laws or guidelines regarding the insurance industry, and incentives and perks. If products are going away or changing, the best FMOs will be the first to know and relay the information to the agents. The FMO will also be the first to know of special incentives like bonuses and trips the agent can earn.

The best FMOs also supply independent insurance agents with needed information or assistance in accessing and using carrier portals, tracking their business, handling issues, and ordering supplies. Many agents can do these things on their own, but if not, the FMO should be willing to assist and teach the agent as needed.

The best FMOs have marketers who call agents daily, including cold-calling, to ensure that agents are equipped with everything in their portfolio they might need to do their job well. Reliable FMOs provide a liaison between the carrier and the agent. Independent agents should be able to count on a personal Marketing Director to intervene when there is an issue with the carrier. This could include compensation not received on time, policies not issued in a timely fashion, or supplies not received. This might also include helping with updates to contact information, adding sub-agents to an agency, or changing compensation levels.

Coconut gathering demonstration in Hawaii

Coconut gathering demonstration in Hawaii

What to Expect From the Best FMO

There is some division over what independent insurance agents should expect from an FMO. Some expect an FMO to provide leads or otherwise help them with their prospecting. But agents need to be wary of FMOs who are giving away ‘free leads’ and promising them they will make a lot of money really fast. An FMO cannot guarantee that agents will write a lot of business and get rich quick. That should never be the focus of an FMO or of an insurance agent.

There are “predatory” FMOs who pay agents very low compensation, and while they are offering "free" leads, they consider any leads they have ‘given’ the agent to be their property, and the clients their clients. Many times, these ‘free’ leads have been used many times over, or are outdated. Most agents get drawn into predatory FMOs because these FMOs use a lot of hype, have a lot of motivational meetings, and promise them the moon if they follow whatever ‘system’ the FMO has. Granted there are people who can survive and even thrive in these fast-paced, high-pressure environments, but it often involves shady people doing some shady dealing without the client's best interest in mind. Many times, agents are expected to write a policy on everyone in their family, then all of their friends, and recruit as many of them as they can, in order to meet unrealistic quotas. Commissions are very low and the agent ends up discouraged because they are not rich in six months.

The best FMOs are upright and have not only the agent's best interest in mind, but also the client's. The best Marketing Directors will help agents with genuine tips and education about the insurance industry, as well as sales techniques that will help them to become more successful as independent insurance agents. These FMOs will help agents to learn the best ways to prospect on their own, use their time wisely, and if needed, find sources for purchasing fresh, reliable leads. Competent Marketing Directors will also help agents who are struggling by sharing what is working for other, more successful agents. The best FMO will help an independent insurance agent to be just that - able to stand on their own two feet and operate successfully as an entrepreneur.

Choosing the right FMO, IMO, or NMO can mean the difference between success and disaster for an independent insurance agent. Now that you know what an FMO is, what to expect, and what to watch for, you should be able to choose the best FMO.

This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.

© 2019 Isibane Bergen

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