Is Joining Big Brokers Right Thing To Do?
Is it just matter of preference, or do national firms offer better opportunities?
Independent agencies thinking about joining other firms don't just look at big national brokerage firms, of course. Numerous agencies across the country also merge or get acquired by regional firms and local competitors.
Which is better? Two brokerage firm executives offered two views to National Underwriter recently.
"You know, a lot of smaller firms just getting together don't always solve their problems. Actually, they may end up acquiring new problems," said Warren Vandervoort, corporate vice president and director of mergers and acquisitions at the Itasca, Ill.-based Arthur J. Gallagher.
"National brokerage firms like ours offer new opportunities to agencies, to help leverage their careers and business and their investments," Mr. Vandervoort said. "We bring a whole new dimension to their organizations that they simply would never experience by merging with another small organization just for volume growth."
He argued that today's market situation is much more demanding and that oftentimes it may be very difficult for smaller firms to merge together and get better in ways they need to compete in today's environment. "So I think there's a better alternative for those organizations seeking out partners such as our organization."
But on the other hand, Ed Bowler, senior vice president of corporate development at U.S.I. Holdings in Briarcliff Manor, N.Y., suggested that deciding whether to join a national firm or a smaller regional business just comes down to individual preference.
"You know, it's an individual choice some people just may want to be part of a smaller organization and they may actually do better at an organization of that size," said Mr. Bowler. In such cases, he said, "they shouldn't think about joining a national organization that has 4,000-to-5,000 employees, because with size, you have to have structure, and some people just don't work well with structure."
"So the agency people have to be really honest with themselves going into the process," Mr. Bowler advised, noting that they need to know what they enjoy doing, and what types of organizations they enjoy working with large or smaller ones.
"They should just be extremely honest with themselves before embarking on such a momentous process," he recommended.
Reproduced from National Underwriter Edition, July 29, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.
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