Exclusivefocus Summer 2012.pdf - National Association of ...

Then, at the Allstate Shareholders Meeting,I asked Tom Wilson the following question:“Approximately 1,200 active Allstateagents have signed a petition requesting aforensic audit of the company’s recent internalcontrols failures regarding agents’ commissions.These agents are frustrated aboutrecent mistakes disclosed earlier this year inwhich Allstate miscalculated agents’ commissionsand Form 1099 tax statements.We are concerned that these problems haveundermined agents’ faith in the company.It is the job of Allstate’s Board of Directorsto provide proper oversight of managementand to correct any weaknesses in the company’sinternal controls. What have you doneto fix Allstate’s agent commission trackingsystems? And will the Audit Committee hirean independent auditor to conduct a forensicaudit of these problems?”Mr. Wilson responded by saying that theboard had received the letter, but went on toassure investors that the financial results ofthe company were “accurate and complete.”He stated that report errors earlier this yeardid not affect agent pay and added, “Our goalis to pay all of our agencies the correct amountof money, and on time.” Referring to the requestby NAPAA for an independent forensicaudit, Wilson said that the audit committee“will determine the next steps.”We have yet to hear from Allstate, but wedon’t intend to let this matter die. We willsend a follow up letter to the audit committeeto inquire about their progress on this issue.In the meantime, it would be helpful ifyou could forward copies of the replies youreceived from Agent Comp, so we have theexact language they used to deny your requests.You can fax those to us at 866-627-2232. It would also be helpful if you couldgo back to the prior year to see if you werepaid on non-agent initiated policy increasesin the past.Heads up! RFG may be gone, but anew “disqualifier” lurks in the offing. Rumorhas it that those agents who are onlyable to get 9% commission for the nexttwo years will face a new round of threatletters and possible firings. My deductionis that there will be four or five disqualifiersand any one of them can kickan agency back down to 9%.It seems that senior managers I’ve spokento have no clue that by releasing somany of our senior baby boomer agents,the company will also lose many of itsPersonal Touch Loyalists. I guess theyhaven’t figured out that many PTLs haveloyalty to their agent – not the company –while others won’t tolerate being shiftedfrom agent to agent.I hope Matt Winter has a “secret successformula” up his sleeve to support hisclaim that Allstate will be the best smallbusiness opportunity in the U.S. of A. intwo years. Millions will be saved in agentreferral fees.Allstate has stepped up requirementsto remain T-doc and POSIS compliantand will hold that threat over agentsmore and more. I expect they will demand100% compliance – no excuses.I’m getting a bad feeling about my decisionto stay, maybe I’ll reconsider…Enclosed is a letter I received fromAllstate that basically says I now haveto have at least one “licensed” sales producerin my office in order to “qualify”for the base pay I received in the past. Ialso received a follow-up call Friday toconfirm I received the letter and that Iunderstood what it meant.At no point was I ever told that Iwould have to have a “licensed” salesproducer in order to receive my base pay.Since starting with Allstate, I’ve onlypaid myself $2,000 a month.Any excess has gone into marketing,rent, the loan on my agency and otherbasic office items.In 2009, I was at the point where I hadbuilt my agency up enough to possiblyhire a staff person, but Allstate startedits downward spiral in my state and beforeI found someone to hire, I was toospooked to commit any funds to hireanyone. Trust me, I’m worn-out from doingeverything myself and nobody wouldappreciate a second person in this officemore than me. However, I only bringin enough revenue to pay myself whatamounts to $6 or $7 an hour, so there isno way I could to pay someone else. I’veeven attempted to hire a producer on acommission-only basis, but we are so uncompetitive,they would starve.In short, I have two options here; Icould work for Allstate for free and pay alicensed staff person or could continue towork for Allstate at a reduced pay, whichI estimate would be between $5 and $6an hour.Editor’s comment: You must be putting in65 to 70 hours a week if you’re earning $7per hour and working even more if you areearning less than that. The Federal minimumwage is $7.25 per hour. With all theresponsibilities and stresses that come withrunning an agency, it hardly seems worthyour while to stay at Allstate.Many agents put in more hours than the44 hours that are required by Allstate, butif that’s all you worked and you were payingyourself $5.50 per hour, your annualincome – with no vacation time – wouldbe $12,584. At $6 per hour it would be$13,728. The scary part is that in 2010, theHHS poverty threshold for a single personwas $10,890.I would like to take a moment to commendyou and the organization for yourtremendous efforts in standing up for theagents, who have made considerable sacrificesin helping build a well-recognizedbrand. Unfortunately, it may be a littletoo late for me since I have been forcedto sell my agency.However, I would like to advise my fellowagents and business owners to pleaseview NAPAA membership and contributionsto the legal fund as an investmentto protect and grow your business.I was a union member in the past andI’ve witnessed the positives as well as thenegatives. However, I firmly believe thatsolidarity is of the utmost importance.I would like to thank you for all thesupport you have provided every time Ihave reached out to you. In life, I believewe meet good people and some not-sogoodpeople. We should always rememberthe good ones who have helped inmaking our lives better. I truly would likeContinued on page 54.10 — Exclusivefocus Summer 2012