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"Transition Planning In Insurance Agencies," "What to Do When an Owner Retires," "R.I.P.: Retire In Place," "Perpetuating Your Agency Without the 'Silver Spoon' Syndrome," "Perpetuation or Succession?" These are all examples of issues discussed in this section of the VU research library.

I have unfortunately worked with the families, estates and partners of several agency owners who have passed away. Most, but not all, of the deaths occurred unexpectedly. In all cases, the person who passed left their families, estates and partners with far more problems than necessary. So my question to you is this, if you passed away tomorrow, would you leave the people around you with unnecessary problems?
Too many agents try to reap the benefits of their agency value before they are ready, selling the goose even though it is capable of laying many more golden eggs. An offer for a healthy, profitable agency before an owner is required to sell is like someone offering you 12 golden eggs if you would sell him the goose that lays the eggs with which he will pay you. Don't be tempted by the offers that abound for the Goose that Lays Golden Eggs.
Is the future positive for small, traditional agencies? As with most broad looking-into-the-future answers, it depends. It depends on knowledge, commitment, and recognizing reality. For example….
We often hear of agencies ‘merging’ as a form of perpetuation planning for an owner. When we analyze most of these ‘mergers’, we find that they were acquisitions in disguise to protect the ego of the selling owner or to keep the clients from believing that they had been “sold.”
Many agents with successors in place are not so sure that their successors can manage the business as well as the older agents or sufficiently enough to assure the older agent a secure retirement payout. What do THEY do in this very sensitive situation?
According to the 2014 Future One Agency Universe Study, 14% of independent agencies do not have a perpetuation plan in place. But industry experts estimate the number is much higher.
Some brokers have been buying dozens of smaller agencies every year. Smaller agencies have been buying each other to supplement income and offset costs for the sake of growth and profitability. Now, twenty years after this boom, the ‘Insurance Tree’ is still blooming and growing fruit, but all the low-hanging ripe fruit is already gone. If you want to participate in the harvest you must work harder to get the next set of agencies available to merge or acquire.
Parents are always parents and most parents never stop worrying about their children. Such worry, though, sometimes robs children of their success and happiness. In agencies, the parent/owner is often so worried about their son or daughter failing, they put their children in a position that definitely prevents total failure, but it prevents success too.
Patricia Fripp, CSP, CPAE is a San Francisco-based professional speaker on the subjects of Change, Teamwork, Customer Service, Promoting Business, and Speaking Skills. She is the author of Get What You Want and Past President of the National Speakers Association. She can be contacted via email at or by phone at 800/634-3035...visit her web site at
What the heck does my company do if I die on the way to my next appointment? As the sole owner of my company, this created a dilemma. Having just completed our company’s perpetuation plan, hopefully I can share some lessons learned – what not to do when completing the task of creating a plan for your firm.
When the current owners wish to perpetuate the agency without severe financial impact to the new owners, they sometimes attempt to gift, discount or bequeath ownership interest instead of charging full value for the agency’s stock and, thereby causing a taxable event to the existing owners while forcing the new owners to pay for the stock with after-tax dollars.
Planning for succession can be very rewarding IF you have the right people behind you. It can be downright dangerous if you don't. The emotional rewards of passing your agency to your next generation is very satisfying as long as that generation desires and shows talents to do the job. If not, you are committing an egregious blunder that will affect your children for their entire (hated) career.
One of the stumbling blocks we sometimes encounter in establishing a perpetuation plan is an employee (or owner) who wishes to 'Retire In Place.' Rather than disassociate from the agency, they will graciously stay on to 'help with the transition.' How do you deal with an owner or a key employee who desires to stay with the firm with less responsibility?
When FDR linked social security with retirement in the U.S. he adopted the retirement age used by Germany, 65 years old. Today our average life span is more than a decade longer than it was in FDR’s time and is still going up. The question before us is, “How will our business lives change due to the extension of productive lives of our insurance agency owners, most of whom are baby boomers?”
Agencies who have Perpetuation Plans in place that will transition agency management and ownership from one generation to another often fail to properly implement the Transition Plan or do it in a way that actually hurts the perception of the agency. There is a way to complete the Perpetuation Plan with a Transition Plan that casts a positive image on the retirement of one owner and the assumption of control by another.
If the retirement of an owner is not planned and prepared for, both the retiree and the business could find themselves in critical positions, floundering to achieve a balance from which each can continue their respective life cycle. A successful prepared retirement, whether it involves selling a business to an outside party or internally perpetuating it, will always yield better results to the retiree, the new (or remaining) owners, the agency, and its clients.

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