As it turns out, anyone can be a Field Marketing Office now, just print it on your business card and it’s done. Ok, it’s not that easy. If you are confused, you are not alone. It seems that the system is bent on making it more muddy rather than on standardization. There are offices that have the field force of a MGA but call themselves a FMO.
I know an agent who is proud to have a website and LLC with FMO in the title, but he has less than 25 active producers and works in one state. Obamacare muddied the water even more when ACA carriers gave the top FMO contracts to anyone who could fog a mirror.
One top, national carrier told me they were so hot for business in the gravy-days that they appointed 150 FMOs — and now they are making agents mad by terminating most of those contracts. A reasonable number of top contracts is usually 15–20 (which is the number they are paring down to). Ask your potential FMO for a resume. He can fake the title but he can’t fake the awards a real FMO should be winning from the carriers. Check out Gordon Marketing’s FMO awards here.
To make it even more confusing, consider this:
- Mutual of Omaha calls it’s top level distributor a MGA
- United Healthcare uses the term NMA
- Anthem Blue Cross and Blue Shield sticks with the FMO title
- While several sneaky companies have several levels: FMO 1, FMO 2 & FMO 3
- And especially in the health markets, IMO is common
How is an agent to know who truly is at the top when the system is bent on avoiding standardizing the titles?
Why does it even matter? Because someone — and often many people — are making money off your production.
If someone is making money off of me, I want to know what I’m getting from them. It seems fair to ask and it should be expected that an FMO offers more than just a contract. Once a rep from Continental Life (before they were sold to Aetna) tried to recruit Gordon Marketing to distribute their Medicare Supplement. When I asked if he was offering us the top contract, as we did over 8 million in Med Supp sales in those days and warranted the top level, he brushed me off. “Well actually you will have the TOP contract that I can offer but there is a guy in Tennessee who will be making 1 point on top of you, but he’s basically retired and we are just giving him a point because we’ve known him a long time. You won’t have any dealing with him.”
Are you kidding?
How is that for the good ol’ boys takin’ care of themselves!
I refused to contract and sent him on his way. He would have been better off lying to me (there would have been no way for me to know the truth and ignorance would have been bliss). If someone, anyone, makes any money off of us, they have to earn it. Agents should demand that, too.
True FMOs typically work with thousands of agents, in multiple states, have a large staff to help agents and offer a variety of services and perks.
I had a hot-shot FMO from South Carolina tell me once that Gordon Marketing was going about recruiting all wrong. He told me to only recruit SGAs, and then “make them do all the work. There is no need for a FMO staff and if the SGA needs anything, give them the 800 number to the carrier.” I immediately left the meeting and called my sister to tell her we were going to be very successful in the face of competitors like that.
You have to give to get and he wasn’t planning on giving anything. That might work, but agents eventually find out that true Field Marketing Offices are offering marketing support, back office services, business cards, custom websites, videos, social media assistance, continuing education classes, leads, sales systems, legal assistance, trips, prizes and much more.
Gordon Marketing was awarded the #1 FMO United Healthcare Medicare 2012 & 2015
Every product needs distribution and Field Marketing Offices have serves the life and health insurance industry for decades. FMOs are large offices with marketers and administrative staffs trained to handle many of the tasks for the insurance company. FMOs in turn can appoint the SGA, MGA, GA and direct agents. Some companies save money by requiring sales agents go through a FMO. The carrier can write one check and let the FMO sort out compensation. The FMO handles contracting, training, supplies, teaching agents about the websites, carrier benefits etc. Carriers love FMOs because we only get paid if we produce sales and have no lasting overhead costs. With no benefits and no FICA, FMOs are cheaper than setting up carrier employees to do the same tasks.
Most agents don’t understand the role of the FMO
Many agents have no idea they are under an FMO and if they know the name of their FMO, they might never have had much contact with them. Typically an agent sees a solicitation for a new product, returns the contract and then languishes without support. A deft FMO later comes along and offers a slew of benefits for transferring the contract and the orphaned agent jumps at the chance. Just like traditional aristocracies, I inherited the crown. Which isn’t to say I’m not worthy of the title, as my sisters (Rebecca, Theresa and sister in law, Danita) and I have taken a small Health FMO and built it into a national company in the past 15 years. Clearly we had a leg up, but we didn’t build Gordon Marketing by coasting. In fact, the major medical business that we were founded on went bankrupt with Conseco in 2001 and we had to reinvent our company.
Did doors open because people knew and respected our dad, Dick Gordon, yes. THANK YOU DAD AND MOM
There are about 25 actual Field Marketing Offices in the independent life and health markets today, about 15 in the Medicare market. Many agencies want to know how to break into this group and there isn’t a road map to be had. Which is why I wrote a White Paper on “How To Become a FMO.” We are also offering a two day class on Agency Building in January for $500 we will explain the road to growing your contracts, keeping your contracts and making more money in distribution.
Not everyone wants to grow from a MGA to a SGA to a FMO. It it not necessarily true that you can make more money at the next level just because the compensation is higher. I know of several independent agents make $400,000 a year and have no staff or downline agents to manage. They work, they keep all the money and don’t bleed out any to overheard. I know of FMOs who rake in the money, own several airplanes and a fleet of cars, but there are also FMOs deep in debt and taking home less than some with lower contracts.
If it were easy, everyone would do it! It is not easy, but you CAN do it.
To become a FMO, you will need focus, capital and a game plan. I’d love to help you, email me if you’d like my advice. Others have helped me and I’m happy to help you.