KW will cut profit sharing for agents who joined rivals

Ex-agents who joined a competitor will see profit sharing cut to 5%

Keller Williams is going with the carrot and the stick approach. The franchisor just announced a significant adjustment to its profit sharing program, aimed at rewarding agents who stay with the company and punishing vested agents who left for competitors.

Keller Williams President Marc King last week wrote in an email that the company will cut the profit share distribution for vested “former” KW agents (agents who joined the company before April 1, 2020) who jumped ship to another brokerage from 100% to 5%. Previously, vested “former” agents benefited from a 100% profit share distribution even after their departure.

However, an incentive to go back to Keller Williams remains: former agents who return to the company within six months of the effective reduction date will have their profit share restored to 100%.

Also, former KW agents who have retired or left the industry altogether will retain their full profit share distribution.

In February 2020, KW had already introduced a more restrictive policy. It essentially stated that associates who joined the brokerage on or after April 1, 2020, and subsequently jumped  to a competitor would lose their revenues from the company’s lifelong revenue program. However, that policy did not impact agents who joined before April 1, 2020. The change introduced in 2020 also extended the wait period to become a vested member. 

The new policy will be implemented on or before July 1, 2024. The new policy was approved by the company’s International Associate Leadership Council on Aug. 16 at KW’s Mega Agent Camp.

Gary Keller, founder of Keller Williams, introduced the concept of profit-sharing for agents in 1986. Gary Keller and Keller Williams’ first Associate Leadership Council (ALC) created the profit share system and an early version of the program was officially launched in 1987.

“We created a program that would treat our real estate sales associates like legitimate partners in the business. We created a program that allows associates to build a business inside a real estate company that is as powerful as if they owned the company themselves,” said Gary Keller.

The tenets of the program are simple: owners of individual Keller Williams market centers allocate roughly 50% of their monthly office profits to associates who play an instrumental role in attracting new talents to the company’s fold. When an associate (agent) joins any Market Center at Keller Williams, they have to name their sponsor. On the 21st of the following month, a portion of the Market Center’s profit is automatically deposited to the sponsor’s account. To clarify, the sponsor is not getting a portion of the associate’s commission. They are sharing in the owner’s profits. Of course, month over month, a Market Center must be profitable for profit share to be paid.

As of July 31, 2023, Keller Williams has dispensed more than $1.58 billion in profit share, since the program’s launch, to associates that have aided the franchise to grow.

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