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Each week on The Download, Inman’s Christy Murdock takes a deeper look at the top-read stories of the week to give you what you’ll need to meet Monday head-on. This week: Keller Williams President Marc King warned that agents who’ve left the company will see their profit-sharing slashed unless they boomerang within six months.
The hyper-competitive real estate landscape of the last few years has seen agents wooed with sign-on incentives, marketing budgets and, often, talk of downlines and profit-sharing plans. For Keller Williams agents, this had been familiar territory ever since the brokerage company began offering a revenue-sharing program in 1987 which transitioned to a profit-sharing system a couple of years later.
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Now, however, with the growth of cloud-based brokerages and a plethora of options for agents both old and new, not to mention tougher market conditions in 2022, the company seems to have chosen to prioritize only those agents who are still holding fast to the brand, announcing last week at the company’s Mega Camp that it would cut profit-sharing for former agents from 100 percent to 5 percent.
Keller Williams cuts profit sharing for agents who fled to competitors by Andrea V. Brambila
On Aug. 16, at KW’s Mega Agent Camp event in Austin, Texas, the company’s International Associate Leadership Council (IALC) voted to change its profit share distribution policy so that vested agents who joined KW before April 1, 2020, and who “actively compete” with KW brokerages have their profit share amount cut from 100 percent to 5 percent.
In a letter to company leaders, KW President Marc King said the change was made to foster “continuous growth” within the company.
“This decision emerged from thoughtful deliberations, echoing the collective sentiment of our agents, franchise owners and team members who contribute to our shared prosperity,” King said.
“This change to Profit Share highlights our commitment to supporting those who continue to grow and journey with us,” he added, noting that “Profit Share will increase for agents that continue to partner in our growth.”
The hue and cry from both sides of the equation was intense (just check out the comments on that story for proof). Some felt that the company had broken its promises to agents while others felt that those who don’t stay don’t get a ride on the gravy train.
Whichever way you’re leaning (and I know, I know, you have thoughts), the questions are many. First, will agents feel compelled to boomerang back to Keller Williams? Next, what will agents do who were counting on that income post-retirement? And finally, what should you do to make sure your post-real estate life is comfortable and financially secure?
EXTRA: Boomerang agents causing broker whiplash? The Download
Here are some of our best recent articles around personal finance and retirement.
7 retirement milestones every real estate agent should prepare for
Believe it or not, there are some big milestone ages that impact the rules that govern a successful retirement strategy. In this article, let CFP Jordan Curnutt guide you through the seven age milestones every real estate agent needs to understand to navigate the path toward retirement. So, buckle up and get ready to understand the details of a real estate agent’s retirement timeline.
Will I have to sell real estate til I’m 70?
If you want to retire at some point and don’t plan on being a real estate agent till the day you die, then it’s time you start planning and saving for your retirement. According to agent Lorraine Beato, the most successful real estate agents are those who have invested in real estate, saved for their retirement and broadened their knowledge of other assets to invest in.
The retirement plan agents ignore (and how brokers can help)
There are a number of ways brokers can assist their agents with the process of investing in their own real estate. The first step is part of an annual business planning session in which goals are set, to determine what the agent’s personal financial needs are and how they can be met. Beyond providing the business planning, and educating the agent, some companies may offer incentives in the form of commission waivers for agent investments. Regardless of how the agent chooses to invest in their future, the reality is that the best way to true wealth and a future of financial security is through passive income — when your money makes money for you.
Retirement planning for all: A smart strategy for every agent
Your retirement plan differs depending on where you are in your career — whether you’re a rookie or top-producing, established agent. Regardless of what stage you’re at, it’s never too early or too late to start building a retirement plan. If you feel overwhelmed by the options or unsure about which stage you’re in, don’t hesitate to seek the help of a financial professional to guide you in choosing the right plan.
PULSE EXTRA: You shared your retirement plan or exit strategy