What to ask before contracting with an IMO.

Contracting conversations follow a familiar script. The organization describes its carrier menu, mentions its support, references its technology, and moves toward paperwork. Most of that is true and most of it is not decisive. The questions that predict whether you will still be satisfied in two years are more specific, and they tend to go unasked because they feel adversarial.

They are not adversarial. They are the ordinary due diligence of choosing a business partner, and a good organization will answer them without friction. Below is the list, grouped by what it tells you.

Carrier access and contract level

• Which carriers do you hold, and specifically the three or four I place most of my business with?
• What contract level would I start at with each of those carriers?
• What moves the level, and is that discretionary or defined?
• Is there any carrier where you cannot appoint me, and why?
• Do you have any arrangements that would create pressure toward a particular carrier?

That last question is the important one. Every distribution organization earns more on some placements than others, which is normal. What you are testing is whether they will say so plainly. An organization that acknowledges its incentives is easier to work with than one that claims to have none.

Support: who actually does the work

• Who would be my point of contact, and how many producers do they support?
• Is case design handled by a dedicated person, or by whoever is available?
• What is the background of the people on the case design desk?
• How is a case handled after submission, and who chases the carrier?
• What happens on a case that requires coordination with a CPA or an attorney?

Support is the most oversold and least verifiable claim in contracting. The way to verify it is to use it before you commit. Bring a real case and ask for help. What comes back, and how quickly, is the actual answer. Case design support and what it actually means covers what a substantive response looks like.

Contract terms you should read yourself

• May I see the release provision before I sign?
• How are renewals treated if I leave the hierarchy?
• Is there any vesting schedule, and what triggers it?
• Is there exclusivity, and what exactly does it cover?
• Are there production minimums, and what happens if I miss them?
• What client and producer data do you hold, and how is it used?

Read the document rather than relying on the summary. Recruiting descriptions of contract terms are usually accurate and occasionally optimistic, and the document governs either way. The ownership implications of these clauses are unpacked in what a producer owned book of business means.

Ask for the paperwork before the pitch is finished. How an organization responds to that request is itself a useful data point.

Fit questions that reveal the most

Three questions consistently produce more insight than the rest combined.

What kind of producer should not contract with you

An organization that cannot answer this is either not paying attention to its own strengths or is unwilling to say. Any specialized firm has a fit profile. A firm built for advanced planning cases is a poor choice for someone who needs high-volume lead flow, and the reverse is also true.

Tell me about a case you could not help with

This surfaces the boundaries of the capability. A good answer describes a specific case type and where it went instead. A vague answer suggests the capability has not been tested at the edges.

What has gone wrong for producers here

Everything has failure modes. Processing delays, a case that got stuck, a producer whose practice outgrew the arrangement. An organization willing to describe one honestly is more credible than one presenting an unbroken record.

Operational questions that matter later

• What is the realistic timeline to be appointed with the carriers I need first?
• How is commission paid, on what schedule, and who resolves discrepancies?
• What technology am I expected to use, and is anything mandatory?
• What happens to cases already in underwriting when I contract here?
• Is there a cost to anything: technology, marketing, events, or leads?

The last item deserves attention. Some organizations charge for tools or programs, some subsidize them, and some bundle costs into compensation structure. None of those is inherently wrong, but you should know which one you are in.

Deciding

After these conversations, you will usually find that two or three organizations are competent and differ mainly in specialization. At that point the deciding question is simple: which one is best at the kind of case you intend to write more of over the next three years. Not the case mix you have today, and not the one they are best at selling.

For what happens after the decision, including transition timing and in-force business, read moving your book to a new IMO and what to expect.

If advanced planning is where you are heading, request a conversation and ask us every question on this list.

Written for licensed life and annuity producers. This article is educational and is not financial, tax, or legal advice. Confirm current figures and client-specific outcomes with a qualified tax professional.