The SQUEEZE Is On

[...]improving the elements that drive revenue - like advisor productivity and retention, product mix, span of control, and compensation design - will provide much greater long-term benefits than will one-time cost cuts. [...]we should apply the portion of the field office costs applicable to Advisor A. Following the same logic, there are housing and utility costs related to the supervisor and the agency head, and there are other layers of management (regional sales managers and product specialists, for instance) who generate some related expenses. Benefit subsidies, financing costs, advertising, and so on may be paid by one product line for administrative purposes - but the benefits of those expenses affect all the sales made by individual advisors. Slowly, most companies have evolved to pay variable products using a GDC-based plan, and a handful have since moved to using the conceptior all products. 1 Alternately titled Gross Distribution Revenue or Gross Distribution Concessions. 2 For more about the GDC concept, see "In Anticipation of Rule 2311, Will GDC-Based Sales and Compensation Plans Be the Norm?", LIMRA's MarketFacts Quarterly, Winter 2007, and the 2006 LIMRA research briefing Will GDC-Based Sales and Compensation Plans Be the Norm?.