We All Have Principles

I’ve been working with a client for a little while now.  Long story short this client was sold a bad policy as part of her estate plan.  The policy is not going to last so it needs to be changed.  I was asked to help figure out how the best way she could pass X amount of dollars onto her kids.  She’s worked hard for her money and she wants them to have it.  Great!

After a few meetings and some research work, one of the things that I talked with the client about is consolidating a couple of accounts.  She has a current contract with Aviva and it worked out best for her to consolidate into this contract.  I am purposely not going into too much specifics because they aren’t important.

My next step was to talk to Aviva, who I had never done business with directly before.  I called up Aviva and got all the paperwork to help my client with the transfer.  I then talked to licensing and commissions over at Aviva to make sure I was set up to receive the commission generated by this transfer…

Their response was, “we do not pay commission to servicing agents.  Any commissions generated would go to the writing agent”

Now in this situation, I’m considered the servicing agent because I didn’t put the contract in place.  I have been put on the contract by the client to help service the needs of the client.  The writing agent is the person that put the contract in place.

Mind you, I’ve never heard of this before.  Every other insurance company that I’ve worked with pays the commissions to the person that generates them, that does the work. In this case, I’ve been doing the work to help this client and help Aviva keep this contract and they are going to pay the commission to some guy the client hasn’t heard from since she got the contract?

Aviva’s answer is again “yes.  This has always been our policy”

I was flabbergasted (how’s that for a word?).  How does this make any sense?  Why would a company pay commissions to someone that might not even been in this business any more?  Or more importantly, why would they pay commissions to the guy that is not servicing their clients instead of the one that is?

To me, this supports the old way that insurance people use to do business, they use to sell you a policy and go away.  The only way they would come back is when it was time to sell you another one.  There was no such thing as service.  Times have changed.  In today’s marketplace service is more important than ever and it is something that every successful small business owner values.

I was left making no money for the time and work I put in on the client.  There’s nothing I can do about it, so it’s not even worth worrying about.  I know I’ve done the best thing for my client.  Karma.  I also learned something, I will never do business with Aviva until they change their policy. Unless, of course, I meet another client that it is in their best interests.  Stuck between a rock and a hard place I guess.

Tagged as: Aviva, commissions, estate planning, servicing