AGENCY PLANNING
STAFF PERPETUATION: IT MATTERS AS MUCH AS OWNER PERPETUATION Written by Beth Smoller, KAIA
We talk a lot about agency perpetuation in our industry. Planning, early and often, is vital to the long-term success and continuation of independent agencies, especially as agency principals are aging.
In all this talk of agency perpetuation, let’ s not forget that not only are agency principals aging, but so is the agency workforce! Producers, account managers, account executives, claims coordinators, and assistants of all kinds are also aging and contributing to the Silver Tsunami. According to 2024 U. S. Bureau of Labor data, over half a million employees in the industry are aged 55-64 and almost 200,000 are 65 and older. 1
Perpetuation planning isn’ t just about who owns the agency but it’ s also about who does the work and who knows how to lead. In small agencies all those roles are often combined into one person. But as an agency grows, roles and responsibilities get divided amongst the team and it’ s just as important to plan for the perpetuation within various roles.
IDENTIFYING AREAS OF CONCERN
To get you in the right frame of mind, think about your long-tenured account managers that have institutional knowledge of not only the book of business they handle, but also carrier relationships and agency workings. Think about your producers for whom you haven’ t identified a successor or where a successor hasn’ t shown viability. Think about who in the agency may be an informal leader, especially with agency culture and morale. Staff perpetuation is about continuity. Continuity is crucial and it applies to institutional knowledge, client and carrier relationships, and leadership abilities within an agency.
Aaron Stocks, CEO of PFS Global, sees the lack of continuity far too often with their insurance agency clients, " Internal perpetuation is fundamentally a financial transaction, and like any deal, it requires stable collateral. It is ironic that Agency Principals, who act as vigilant risk advisors for their clients, often allow ' organizational knowledge ' to become an unmanaged liability on their own balance sheets. If operational intelligence is siloed in a few key heads, the business becomes too risky to finance. Principals must invest in centralized knowledge bases, intentional cross-training, and the right outsourced partners to convert that volatile knowledge into a tangible, bankable system that ensures the asset performs long after they leave the building."
For most agencies, the resources aren’ t available to have“ bench” players who can immediately step into a
24 KANSAS INSURANCE AGENT & BROKER