Interview and subsidy
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Thursday I had my third interview with a division of a large Mutual company that does full-service financial planning, it is a 3 year training program. They walked me through their planning strategy and told me I was a good fit. I was told my next meeting they will get into specifics about how things work and what is expected and the breakdown of commissions, ending with an offer of independent contractor.
My question is this, from day one they have been telling me about a $60k subsidy to open and run my business that I do not have to pay back. What exactly is this subsidy, is it to be used only for business expenses, is it a lump sum or over the course of the 3 year training program? I know this is a fairly common practice in insurance but how common is it for FA's?
I know many of you will tell me I should have asked them but I thought it was bad form to discuss in this interview, I will find out more about it in the final meeting but that will take a week and my curiosity is getting the best of me. Thanks in advance for all your kind replies.
Right off the top of my head?
Lumpsum? No one is going to give you $60,000 and say, "Go be successful."
More likely, the $60,000 is the dollar-value of the "tools" the company is giving you to succeed. For example, an office, phone, access to financial programs, etc.
It could also include your training salary for the 3 years. $20,000 per year? Yipes, if that's the case, you better get to producin' in a hurry!
[quote=doberman]
More likely, the $60,000 is the dollar-value of the "tools" the company is giving you to succeed. For example, an office, phone, access to financial programs, etc.
[/quote]
The value of the training was discussed completely seperately from the "subsidy", they also told me I "qualified" for the subsidy after I filled out a form that pretty much included my current and expected expenses. In addition they told me that my financing for the subsidy went through.
If that's the case, then you have to be sure this is what you want to do, to thoroughly know the ins and outs of the job. Research the company and its reputation. Something about this job offer and subsidy smells fishy. Go over the job offer and terms of the subsidy with someone knowledgeable, preferrably an attorney.
By the way, the word "subsidy" implies giving money toward an achievement or result. So, they aren't giving you a subsidy, they're actually requiring that you go in debt (to the tune of $60,000) in order to perform this job.
What does the $60,000 purchase for you? Since it's not a training salary, it must go for the purchase of "things". Are the "things" purchased by the $60,000 sold by the same company hiring you? What is the interest rate and payment terms on this $60,000? Is the $60,000 spent all at once or is it spent over a 12-24 month term?
What happens if you go in debt and later decide you hate the job?
You should be very careful and very thorough before signing anything with this company.
[quote=doberman]
If that's the case, then you have to be sure this is what you want to do, to thoroughly know the ins and outs of the job. Research the company and its reputation. Something about this job offer and subsidy smells fishy. Go over the job offer and terms of the subsidy with someone knowledgeable, preferrably an attorney.
By the way, the word "subsidy" implies giving money toward an achievement or result. So, they aren't giving you a subsidy, they're actually requiring that you go in debt (to the tune of $60,000) in order to perform this job.
What does the $60,000 purchase for you? Since it's not a training salary, it must go for the purchase of "things". Are the "things" purchased by the $60,000 sold by the same company hiring you? What is the interest rate and payment terms on this $60,000? Is the $60,000 spent all at once or is it spent over a 12-24 month term?
What happens if you go in debt and later decide you hate the job?
You should be very careful and very thorough before signing anything with this company.
[/quote]
The good thing is it is a subsidy that the company makes the payments on not me, I find it hard to believe that they would acquire financing just so they could pay themselves fees and then make the payments + interest, makes no sense at all.
The parent company, MassMutual has a very good reputation from everything I have seen but I would be part of a different team. One that is full-service and not focused primarily on life-insurance.
I appreciate your input, but I hope you're wrong.
I will definitely ask more specific questions on my next meeting and keep you updated.
ExProp, I am bringing this thread back from the grave too. What are the answers to all your questions?
Jeez you're really making me work
In a nutshell the subsidy is spread over three years, effectively matching your commission up to $28k the first year $17k the second year and $15k the third year.
You'll get the same thing with all of the major mutuals. It's simply a question of what needs to be done to qualify for the subsidy.
I think that the 3rd year may only be $10,000.
[quote=anonymous]
You'll get the same thing with all of the major mutuals. It's simply a question of what needs to be done to qualify for the subsidy.
I think that the 3rd year may only be $10,000.
[/quote]
My fault, you would be correct, total of $55,000 not 60