Contracting
LOA vs Independent: Which Contract Should You Sign?
July 24, 2026 · 5 min read · By UplineReview
Before arguing about commission percentages, settle the question that actually determines your career economics: who owns the business you write? That is the real difference between an LOA (Licensed Only Agent) contract and an independent direct-appointment contract through an FMO.
What an independent contract gets you
As an independent agent you hold direct appointments with each carrier, the carrier pays you directly at street level or better, and you own your book — renewals keep paying you as long as you stay licensed and appointed, even if you change uplines. The trade-off: you fund your own leads, E&O, and overhead, and nobody owes you training.
What an LOA contract trades away
Under LOA, the agency holds the carrier contract; you write business under its appointment and receive a percentage from the agency. In exchange the agency typically provides leads, CRM, office support, and training. The costs are structural: lower effective comp, agency ownership of clients and renewals, and non-solicitation language that limits what you can take when you leave.
How to decide
LOA is defensible when you genuinely need funded leads and mentorship, and the agency actually delivers them. It is a bad deal when you are effectively independent — sourcing your own clients — while the agency keeps ownership anyway. If you are new, read our guide to choosing the best FMO for a new agent, and check what verified agents say about an agency's LOA terms in the FMO directory before you sign. Pay special attention to reviews that mention what happened when agents tried to leave.
Frequently Asked Questions
Do LOA agents own their book of business?
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Usually not. Under most LOA contracts the agency owns the client relationships and renewals. Some agencies offer partial vesting after a set period — get any vesting promise in writing.
Is LOA bad for new agents?
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Not inherently. If the agency genuinely funds leads, training, and overhead, LOA can be a reasonable way to learn without capital. It becomes a problem when the agency takes the ownership trade-off without providing the support that justifies it.
Can I switch from LOA to independent later?
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Yes, but you typically leave your book behind and may face non-solicitation clauses. Plan the move before your client base gets large, and check each carrier's transfer rules.
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