The structure broker negotiates a better split for himself by whining to a settlement planner representing the defense settlemnet planner that he's got to take care of the financial planner who brought him into the case to participate for the plaintff instead of the settlement planner already working on he case that was brought in by the plaintiff lawyer. Moreover it is represented that any split percentage would have to be agreeable to the financial planner. He represents to the defense settlement planner that a higher percentage would not be agreeable to the financial planner and that the whole structure might fall part. In good faith, the defense settlement planner relies on this and agrees to a lower split than usual. As an aside, the defense settlement planner also agrees to split his reduced share with a previous plaintiff broker out of his share.
It is then learned that the financial planner represents to the guardian ad litem that it is not being compensated from the structure.
When questioned by plaintiff lawyer in a courthouse hallway, in front of witnesses, plaintiff broker unconvincingly mumbles that there is no formal agreement with financial planner and would only pay it if licensed. During questioning by the defense settlement planner, in contradiction to the tactic used to negotiate his favorable split, plaintiff broker now claims that he hasn't discussed commissions with the financial planner since September 2010. The conversation also reveals that the plaintiff broker knows that the financial planner is licensed in the relevant states, a contradiction to what he said to the plaintiff's lawyer only minutes earlier in the hallway. Furthermore, in the same conversation,the payment of commissions to the financial planner is stated as possibly a conflict of interest by the same plaintiff broker. Talk about the Texas two-step!
Who is telling the truth? The financial planner; the structure broker brought in by the financial planner; or neither?
The young turk in question may feel smug for an illusory feeling that he has got over a more experienced broker and the guardian ad litem . But to do so through apparently deceptive means is shameful. The parties in question know who this individual is and the agency he's affiliated with. One can be sure some attorneys in the jurisdiction won't forget him either.
If you are going to negotiate, do so in good faith.
Note: Generally, you cannot split with or pay commissions to someone not properly licensed at the time the business is produced. On February 23, 2005 the Office of General Counsel of the New York State Insurance Department issued an opinion on point, in response to a question posed by the structured settlement watchdog, John Darer.
Post Script: In response to this story the structured settlement watchdog heard from the general agent of the broker in question. He verbally confirmed that the financial planner WAS being paid, or WILL be paid a share of the structure commission all along. With respect to the statement to the guardian ad litem, it was explained that the financial planner listed 4 entities in an email to the guardian ad litem that were not receiving compensation from the structure, none of which was his firm, and thus leaving wiggle room. The general agent threw it back on the shoulders of the guardian ad litem, who he alleged did not ask if the financial planner or his firm was being compensated. I'm not sure why there was lack of transparency, or the reason for the lack of transparency, and why the broker retained by the financial planner could not have been more forthright when questionned. There's a lesson learned in here somewhere.