Since transitioning from commissions to fee based consulting in 1997 I’ve often found plan sponsors reluctant to accept our fee schedule. “That’s too much! We don’t pay our broker anything, the carrier pays his fee!”
Losing track of what current market commission rates are these days I asked a TPA sales rep. what brokers expect when they make a sale. “Bill, the going rate is between $25-$50 pepm” he said. “On top of that many earn bonus commissions too.” Floored, I asked him to repeat it again.
So I decided to calculate the pepm equivalent rate based on my standard consulting fees schedule to see just where they are in comparison. Depending on the size of the group our pepm equivalent fees range from $2 – $25 with an average mean of less than $10 pepm across our book of business.
