OR- How to Move Your Agency from the Older to Younger Generation

We were recently contacted by a 40 year old agent, a minority owner of his family agency in a rural community. The agency was five generations deep in the family business and each generation went out either “screaming or scratching” or deceased.

The agent called me because the PAIN indicator (you know, the one that the doctor asks you to rate the pain on a 1 to 10 scale) is at an 8 on good days and at 11 when the agent was really frustrated. He loved and respected his father but was celebrating his 19th year in the agency and was still earning 50% of what his father was taking. He was doing all of the commercial lines, customer relationship work, and all of the management (when he was allowed by his father).

The phone call to us was after the most recent attempt at upgrading the office systems and procedures to a scanning system and a paperless environment. For a year the agent was basically told to do whatever he wanted to do in the way of running the agency. Now, as it came time to invest in the technology and implement what had become a full-fledged, agency-wide project, dad stepped in and said that it was a waste of money and should be shelved until the agency could ‘better afford it.’ A year of effort, education of the employees, participation of their agency management system support and review, quotes, demos and on-site visits by four different vendors quickly went down the drain, and all because a 72 year old agency owner (who refused to participate in the project since his son was running the agency) felt that it wouldn’t help the agency operate better.

The agent told us, “I love my dad, but I can’t stay under his thumb until he dies! I’ve got to be given the opportunity to grow the agency and make it pay more or I’ll never be able to educate my kids and live the kind of lifestyle that I need.”

That’s when I asked the agent to rate the PAIN LEVEL. Until he felt frustrated enough, he would not act on the need for agency perpetuation and succession. It sounds disloyal, but he was seriously considering leaving the family business and starting an agency. The agent was severely conflicted about doing this to his parents but the alternative was to live the life of a serf, “farming the land” for someone else for the rest of their lives and expecting to be a loyal and loving “subject”.

This agent was learning that the difference between a career and a life sentence is the frame of mind and control he has over his environment.


Yes! It began with a call to Agency Consulting Group to set up (for all practical purposes) an intervention with dad. We, as outsiders, conducted a GPP (Growth, Productivity & Profitability) Analysis (the baseline analysis that we conduct in every new client agency) with a goal of Succession and Perpetuation Planning. During the wrap-up, which confirmed pretty much everything that the agent was trying to do with the agency to move it forward (and a little more), we sketched out a Contingency Succession Plan (in the event that something bad happens) and a buy-out succession plan. Then we defined the ‘what-if’ scenarios that were available to both in the event that the Succession Plans WERE put into effect and if they were NOT implemented.

Dad, seeing some of his friends fall by the way-side, was all in favor of a Contingency Buy/Sell Agreement that would assure the orderly transition of the agency in the event of his demise. The ‘What-If’ scenarios we proposed included the orderly transition of ownership in the agency in a way that was totally non-threatening to Dad, but assured the agent rights to both own and operate the agency. Dad needed a place to come every day. For the last 10 years he had been paring down his actual day-to-day involvement with clients and the family member was already handling ALL of the daily management. Dad’s primary goal was to continue to get paid. However, his lifestyle didn’t NEED the kind of compensation he was getting and we helped him identify the compensation level that would keep him secure in his lifestyle and made sure that that compensation level was guaranteed to him (and to his wife if he were to pass).

Dad is still coming into the agency for a few hours a day. But his SON is now the legitimate owner of the business and if a disagreement occurs, the agent reminds Dad that all the family interests are secure and will be aided by the growth and efficiency measures that the agent is implementing to make the agency better.