Every office has a producer who is never there. The advent of fee based accounts and the decline of transactional business has meant that producers are not tied to their screens. And the advances in secure technology functionally means that any account can be run from anywhere.
Ellen had a big producer named Dan who wanted to spend time in Arizona. A lot of time in Arizona. As in half the year. Ellen successfully managed that situation for years. How? Once the initial compliance hurdles were overcome, there is one simple word to describe the relationship: trust.
Trust is a very different attribute than naiveté. Trust comes from track record. Trust comes from experience. Trust comes from verification, meaning that Ellen would take what the producer said and line it up verses reality. Remember the old way we dealt with the Russians on nuclear missiles: trust but verify. Taking their word for something may work sometimes, but it is not a business model. Ellen was able to have this arrangement work because she trusted and verified. As a result, the revenue (almost completely fee based) kept flowing.
Alf had two ghosts. Ken wanted to spend a bunch of time with family in Las Vegas. For a while, he would be in the branch for two weeks and then in Sin City for two weeks. But Alf could not quite get comfortable with this. Some things didn’t feel right but there was no evidence of any misbehavior. Ken’s business was not growing much but it wasn’t going down either. So when Ken wanted to spend even more time there, Alf orchestrated his transfer to a Las Vegas office thus losing all the revenue. Even worse, as he had been recruited to Alf’s firm by his predecessor, the amortization of the signing bonus was hitting the branch. The regional refused to fix this and Ken actually then went to a competitor. As a result, not only did Alf lose the revenue, he was stuck with expense. Too bad.
Alf’s second ghost was one he actually fired. Willie said he was out on appointments trying to build his clientele. Constantly. As in most of the time. Meanwhile, his production was declining from a pretty low number. Willie finally confessed he was having personal problems (which was probably true) and simply didn’t feel up to coming into the office. The termination was because he was at the mall. And at the movies. And sleeping in. And not willing to change. And unhappy as his income was declining. And saying that the firm was corrupt (well that may have been partially true.) In short, he was a liar and could not be trusted. Did we mention his production was declining from an already low base? But he didn’t feel he had to come to work as he had been given an above market deal by Alf’s predecessor with lots of up front money and was still under that deal. So Alf fired him and filed to recover the unamortized signing bonus and was successful. He was a bad hire. To his credit, Ken paid the money back from his income as a beach-located preacher. No kidding.
As the population of producers continue to age, there will be increasing pressure on managers to deal with the semi-retired producer who wants winters in warmer climates. Plans to transition these ghosts into retirement are complicated and a topic for another day.
So what did we learn here? To justify extended work time away from the office there better be:
- Plenty of revenue.
- Track record of trust and open communication.
- Mostly fee based business.
- No complications from recruiting deals.
- Your gut telling you this will work out.
- Some kind of verification available.
- Branch office infrastructure to support producer and appropriate technology skills in place with the producer and the office.
- Out of sight should not mean out of mind.
- And yes, compliance approval.
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