Service to be provided:

Pinnacle will assist you in determining the most appropriate means (fee vs. commission) to compensate your broker, along with our recommended range of compensation that we view as being both fair and reasonable for the services to be provided.

Why should such a service be considered?

The traditional means of brokerage compensation has been by way of a commission, meaning the broker receives a percentage of the gross annual premium on each line of insurance that the broker places on your behalf. These percentages can range from 3% to 15%, and possibly more. A commission or percentage based compensation arrangement places any broker in a perceived conflict of interest position, since the lower the insurance premium, the lower the commissions earned. Conversely, a fixed fee or incentive based fee, will provide the broker with a fair, agreed upon level of compensation for the work performed or results achieved. Therefore, the lower the insurance premiums, the higher the ratio the insurance broker has earned for a fee.

Such a compensation strategy, allows you to more closely evaluate the value of the services provided to the compensation paid. We view such an analysis as a part of overall management's responsibility to effectively manage business expenses.