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BROKERS SAY:��The ��۱���������ϴ�ȫ group benefit scale commission calculator, is an integral part of my sales and renewal process.

I use it as tool to keep clients and prospects alike apprised of how we are compensated in the marketplace. In an environment where “disclosure” is the order of the day, I find my clients appreciate the professionalism. They also seem to like that I can simply go to the ��۱���������ϴ�ȫ website on my iPhone and plug in their premium and they can see what the average commission should be.�� ��Kevin M. Wallwork – Benefits Management Group Inc.

Commission Examples:

Premium is $2,000 a month ($24,000/yr) – advisor is paid $2,400 or approx. 10.0%

Premium is $20,000 a month ($240,000/yr) – the advisor is paid $15,750 or approx. 6.56%

Premium is $100,000 a month ($1,200,000/yr) – the advisor is paid $35,750 or approx. 2.98%

Frequently asked Questions and Answers

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Is there an industry standard for the amount of commission a broker is paid?

NO.�� There have been a number of�� formulas used, but many tend to fail for smaller and larger groups.�� The new GBS scale tries to provide a method to calculate a midpoint for what brokers charge.

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Is the “Crown Scale” from the 1980’s a good standard to use for small employer plans?

Not really.��Many brokers have been setting the commission for smaller groups at a flat 10, 12 or even 15% commission and disregarding the scale altogether.�� The reason is that the effort required to implement and administer plans, as well as educate and service both administrators and employees has increased dramatically.

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So does the “Crown Scale” work better for larger employer plans?

NO. Many brokers have used the “Crown Scale” as a guide for calculating commission, but then multiply the result by 2 or 3 times to calculate what they will actually charge.�� The new GBS scale better reflects the increased costs, risks, inflation and overall downloading of costs to advisors.

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Are all advisors required to charge commission based on this scale?

ABSOLUTELY NOT.����This is merely a guideline to help employers understand what many brokers are charging across the country.�� Many brokers may use this scale to estimate and and then set a flat percentage amount.

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Can I negotiate commission, higher or lower, with my broker/advisor?

Of course.����This is only a guideline and advisors are free to charge above or below this level.�� ��Brokers and Consultants may also charge “Fee for Service” on top of, or instead of this scale alone.�� Remember, that the lowest cost may also mean a lower level of service, education and experience.

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Why is there not a standard commission range like home, auto or business insurance?

Each broker adds differing value to client relationships and as such may charge more or less than a “average”�� broker.�� Those specializing in employee benefits that take the time and effort to educate themselves to a superior level, or those that assist with HR functions, or plan administration, may for example, charge higher amounts than this.�� As a result, there is flexibility to meet clients needs.