Why joining an aggregator or cluster group could stunt your growth as an independent insurance agent

1 When you join a cluster group you will still have your own individual production requirements. Granted these requirements are often less than if you had a direct appointment with the insurance company, but nonetheless, you still have to produce or the threat of losing your contract is very real.

2 Many of the best insurance companies do not work with aggregators so if you join one, you lose out on some great products. There are a lot of insurance carriers in the market place. Many of them have chosen not to work within cluster groups for one reason or another. If you are part of a cluster you won’t have access to some of the best companies out there because they just don’t do business with cluster groups.

3 Fees. Some of the cluster groups out there have large start-up fees and ongoing monthly fees which can be somewhat cost prohibitive. Others have massive buyout clauses so that if you ever want to leave and move your book of business, it will cost you up to $25,000 just to get out of the arrangement.

4 In some instances, the cluster may limit your access or not give you access to ALL of their carriers. Many agents have reported that certain aggregators, although they have access to 30 carriers for insurance, will alone allow the new agent to work with 5, for example, out of the 30. The new agent is put on a “prove yourself first” kind of trail platform.

5 Training and communication. Joining a cluster can leave you without a lack of training. That is because a cluster is designed to appoint other agencies, not individual producers. If you join a cluster, you are expected to operate as your own agency and be in charge of your own training, which can leave you without any real support.