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February Is I Love NAIFA Month

A successful agent in the insurance business has built their business by making and keeping promises to their clients, staff, family, and themselves. However, an individual may decide to retire, their situation may change, or something else may arise that makes it necessary to cut back or stop their activity in the insurance business.

Finding ways to keep those promises means you need a good game plan for succession. There is far more to be considered than a simple financial transaction. Relationships must be transitioned and maintained. Let's examine a few items to consider as you build your game plan.

Setting realistic expectations

A good succession plan takes time to design and implement, so don't expect it to happen overnight. You will also need to put your "house" in order for someone else to step into your role.

Financial considerations

Are your finances in order? When looking at succession, you need to be aware that a serious buyer will want to look at your financial statements and tax documents. Go through your finances and make sure your documents are prepared and available for review.

It would help if you also remembered that your renewal income would be part of what they will be buying, so be prepared to budget for the change in your income flow.

Speak with your accountant to discuss the tax implications for receiving the purchase price. You may want to negotiate with the buyer to distribute the purchase price over an extended period. 

The transition of care for your clients

Many buyers may be looking only for a financial transaction with no intent to provide ongoing customer care. If you desire to see your clients cared for after you sell your business, you must have extended conversations with the buyer about how they will provide sustained customer service to your clients. Remember, you will likely still live in the same community as your clients, so they will expect you to provide for their needs when you retire or leave the business.

Contracts with carriers

Since your contracts with insurance carriers will be part of what is being sold, they must be in order. Get copies of your contracts and have them available for the buyer to review. If you have been using commission advances, remember that it will impact the value of your business since those advances are considered an outstanding debt to the carrier.

Your staff

If you have staff, you must determine how the sale of your business will impact them. Be sure the buyer understands and agrees to your desires for handling the staff post-sale. You will also need to determine how and when they are informed about the pending sale.


Don't underestimate the emotions involved in selling a business you have put your heart and soul into. Prepare yourself mentally for a change in how you spend your time and mental energy. Often being an agent is part of defining ourselves to others and ourselves. Focus on the new opportunities that selling your business will create for you and your family.


Regardless of who you are selling to, even if it is family, do everything in a legal and documented fashion. Have a professional valuation, a written purchase agreement, and carefully outlined financial arrangements.

You have worked hard for the success and relationships you have. It should be treated with the respect it deserves. When done correctly, succession can be amazingly rewarding. It is a true comfort to know you have created something that will live on well after you are no longer directly involved. We spend our careers helping others prepare for the future so that they can relax. You have earned the same thing. Relax and enjoy your retirement.

Dan Mangus is the Vice President of Growth and Development at Senior Marketing Specialists and a contributing columnist for Advisor Today.



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