If you’ve never done it before, there’s a good chance broker fees and premium financing revenue share hold a potentially uncomfortable place in your process.
Maybe you’ve thought about how great it would be to have built in margin on almost every policy sold and never worry about service volume. But then, you start asking yourself questions.
“I’m going to have to explain that fee if a client asks.”
“What about compliance?”.
“My commission should be enough, right?”
The reality? Agents who charge fees or take a financing spread on a regular basis rarely run into pushback. The fear is louder in your head than you’ll ever hear from your client.
Yes, some states regulate how fees are disclosed or capped. You’ll obviously want to check the rules in the states you operate in. But in most cases, broker fees and financing spreads are legal as long as you are transparent.
Want help with fee compliance and guidelines? (link to landing page)
That means the real blocker is not compliance. It’s confidence.
It doesn’t matter if your fee is $50 or $5,000, as long as it’s relative to the overall premium, it will rarely stand out or get called into question.
Let’s take a step back for a second.
On a $20,000 premium, a $200 to $400 fee is only 1 to 2 percent of the total. Most clients won’t see anything out of place. Their main goal is to make sure their insurance is “taken care of” and to not think about it again until next year. When you frame it as part of delivering flexibility and support, they rarely give it a second thought.
You are more than likely going to care more than they do.
Let’s also not forget that carriers haven’t been shy about adjusting compensation in ways that aren’t great for you.
The service work is still there regardless of how low the commission goes over time. The gap gets even wider when renewal commissions don’t match first-year commissions, which is something that gets missed in many forecasts.
On top of it all, commissions are only good as long as the policy is in force. That means you're a cancellation, coverage change, or even an AOR away from everything going to zero, even though your team has already done the work.
Broker fees create a safety net of compensation to make sure these situations aren’t worse than they need to be.
Example 1: Broker fees
Let’s add a simple $200 broker fee on 500 policies. That adds up to an extra $100,000 of annual revenue. Make it $400 and we’re flirting with a quarter of a million dollars. Even $50 drops $25,000 to the bottom line.
More importantly, that revenue gives you the margin to service every policy the way you want. No more avoiding a small account because “the commission isn’t worth it.”
With a consistent fee policy, every account pulls its weight and you can focus on delivering the same quality service across the board.
Other businesses do this every day. Restaurants add margin to food. Contractors add margin to materials. Software companies include it into licensing. Setting prices to support the service and experience you want to deliver is simply good business.
It also means you are in control. You decide how much margin is needed to serve your clients well, instead of letting carrier commission schedules quietly decide which accounts deserve your time.
Example 2: Premium financing
Let’s dive a little deeper on financing. What if you added a two point revenue share on $500,000 of financed premium? That easily turns into $10,000 in recurring revenue.
That small adjustment in APR barely registers for your client, but it is the difference between just covering the billing workload and having the margin to proactively handle endorsements, certificates, and renewals without cutting corners.
If we’re really being honest, you’re the one doing most of the work to make this loan happen.
Just remember, they aren’t calling the finance company if they have a problem or question. That’s coming straight to you.
One agency only charges fees on agency bill clients, where the extra workload is most easily justified, and when the compliance is relatively straightforward.
Their fees usually fall between $350 and $500 and often with the intention to instantly turn a C-grade account into a B.
Here’s the surprising part, they’ve only had one single client object.
Even then the explanation was simple: “We make about $30 an hour on this. I could drive Uber instead. We’re betting on your growth, but we need to make sure the relationship works for us today too.”
That kind of transparent, matter-of-fact framing diffuses the tension quickly and earns respect from clients.
Most clients don’t push back. You do.
There’s hesitation because you think your commission should be enough. Even though you’ve made plenty of decisions because it wasn’t.
You avoid the conversation because it’s uncomfortable defending your value. Or because it feels like fees and financing are nickel-and-diming clients. The reality is it’s about aligning your pricing with the real cost of operating the business you want to run.
When you present it confidently and transparently, you build trust. It’s possible they start to question why other agents haven’t charged them before.
If this still feels uncomfortable, that’s why we wanted this to be the first project we pulled into the lab.
Insurance Nerds Labs is your safe space. A place where you can try scripts, workflows, and fee structures alongside other agencies without the fear of messing it up.
In the Lab, you will validate what works, refine how you explain it, and walk away with a repeatable process you can bring back to your agency.
Of course, you won’t be alone. You’ll have 20 insurance friends optimizing and refining every aspect of this process with you.
We’re taking the first 20 agencies to join Insurance Nerds Labs to spend 90 days working on this together.
If you have ever wondered whether broker fees and premium financing revenue share are worth it, this is your chance to prove it in a low-risk, high-support environment.
Reserve your spot. First group limited to 20 agencies.