Thought Leadership

BroadStreet’s℠ Unique Business Model Ensures Smooth Agency Perpetuation

“The dreaded ‘P’ word: Perpetuation” is how a recent article in described independent agents’ reactions to the subject of succession planning.

The article detailed the dread of most principals: “It’s the one issue that directly determines the fate of thousands of insurance agencies, but few principals like to think about it. Some avoid thinking about it at all costs. Others bristle at the very mention of it.”


No Perpetuation Plan

There’s a good reason that the lack of perpetuation planning is a hot topic in the industry. There are about 35,000 insurance brokers throughout the U.S., and research estimates that some 85% of them are in their late 50’s with no perpetuation plan.

For agents who are ready to retire and have no plan, the choice is usually to consolidate with another broker or agency and sell their interest.

But there are other agents who are not ready to retire, but want to realize the intrinsic value of their agency, while continuing to grow their businesses.


Seeking Entrepreneurs

These are the agents we seek as core partners. These are the entrepreneurs that fit the BroadStreet℠ model: it’s the leader who is not done yet – not done leading, not done growing, not done building and not done working.

Since our founding in 2001, BroadStreet℠ has partnered with 18 such agencies as core partners, who have 140 offices in 20 states. These partners have continued to grow their agencies through organic growth and the acquisition of 230 smaller agencies.


Ensuring Perpetuation

By partnering with BroadStreet℠, our partners ensure their businesses’ perpetuation, while the agency’s principals can individually realize the value of their retained equity and over time transfer their interests to the next generation within the firm.

When BroadStreet℠ makes an investment, the agency’s ownership is often distributed among the agency’s management team, which provides a strong financial incentive for the agency’s leaders to increase the value of the agency.

By partnering with BroadStreet℠ they gain economies of scale, access to markets, industry expertise and shared programs. They continue to maintain their existing brand identity and unique corporate culture while participating in the growth of the equity stake of their own operation.


Access to Capital

To continue their agency’s growth, our partners also receive access to BroadStreet’s℠ bank facility, which provides principals access to capital for their acquisitions without personal recourse.

Our bank facility creates an advantage for our partners: they never have to worry about where the money is going to come from when an opportunity arises to make an acquisition.

It doesn’t matter if the opportunity is a book of business or a multi-location agency, they have the support of BroadStreet℠ as a stable and reliable capital partner.


Perpetuation Strategy

In summary, perpetuation doesn’t have to be a painful process. It can be an opportunity.

BroadStreet’s℠ business model provides a viable perpetuation strategy for agency owners who want to individually realize some of the value of their retained equity while continuing to work and grow their businesses.


If you’d like to learn more about our unique business model and approach please contact us.

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