revenue and expenses will be split, and for
how long, and how decisions will be made.
Junior agents must agree to stay with the
company for an agreed-upon length of time.
Everything is in writing.
In the beginning, the junior agents are
more like assistants or secondary agents.
Over time, the senior agents hand off more
and more responsibility. They also introduce
the junior agents to their clients, sometimes
at parties or special events. Their names
appear jointly on collateral material, and
eventually the junior agent becomes the primary contact.
The money handling is similar to a referral program. With
any business that gets done for, say, the first six months,
maybe the commissions come to the senior agent. Then it
might be a 75 percent– 25 percent split in favor of the senior
agent, and later it shifts to 50–50. When senior agents retire,
they continue to get maybe 15 percent or 20 percent, and then
it tapers off.
Prepare for the Unexpected
We are very invested in each transitional relationship, but we
also determine how to unwind the plan if something changes,
for example, if the senior agent starts down the road and
decides, “I’m not ready,” and the younger agent has already
invested time and energy, or if the personalities aren’t right.
That way, we don’t make enemies or lose agents. The contract
Not Just for Retirees
spells out how a dissolving partnership will split any business
in progress and who owns future business. Typically, the
succession plans are between one and three years, depending
on the size of the senior agent’s business and the strength
of those relationships. Junior agents are not always start-up
agents. In some cases, they are very seasoned, but they still
have 10 or 15 years left on their career horizon.
So far we have helped about a dozen agents create succession
plans—and each situation is unique. In one successful case, an
agent wanted to transition her business to her assistant, who
did not have a sales license. We helped them put together a plan
that included steps toward licensing.
Not all succession plans are for retirees. One of our most
successful agents had been with us five or six years when her
husband, who is in the military, was promoted and transferred.
We helped her transition her business to another agent.
Just last year, we saved the business of seven agents who left
us. That equates to $1.25 million in adjusted gross commission.
In the beginning, we had to talk senior agents into doing this.
Now they are seeing it work, and they are coming to us.
Do as I Say
I do not have a succession plan of my own. I have four children,
and two of them work for us. They’ve both decided they’re
happy to continue being agents. They don’t want to manage
the company. I know I have to put something in place. I’m
working on it.
By Bill Hurt, as told to Pamela Dittmer McKuen
“We identify pairs of agents we feel will forge the
best partnerships, and then we help negotiate
such issues as how the revenue and expenses will be split
and how decisions will be made.”
Company ERA Shields Real Estate
Colorado Springs, Colo.
Number of offices: 2
Number of sales associates: 91
2013 gross sales: $361 million on 1,309 transaction sides
2014 projected sales: $390 million on 1,400 transaction sides