Becoming a State Farm Agent

[fastrack1]

What a joke, SF "charges" you Wheel of Fortune prices for the "free" trip. You end up paying more in taxes for it than what it would cost you to travel by yourself with people you like.

While it might be hard to quantify the exact cost of the trips and thereby hard to know if what they are charging you for tax purposes is correct, I sincerely doubt that you can go on the same trip yourself for the cost that you pay in taxes. I guess it depends on your tax bracket - but most of you sound like you have low income and high expenses, so your tax bracket is not very high.

Also, I don't like paying the taxes, but that isn't a SF rule. It is an IRS guideline. Part of being an independent contractor. Seems like it always turns into something for everyone to gripe about - funny how most of you LOOK for such things. However, many times, I'd love to have the money instead.
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Boards like this will play a role in causing change at SF for scratch agents. There is no doubt that many potential SF recruits who have read this forum are viewing the opportunity much, much differently and some have dropped interest all together. Imagine what a SF recruiter thinks reading this thread.

Based upon everything I have read there are only two kinds of people who will pursue the SF opportunity. First, those who have drank the SF koolaid, and take the opportunity based upon the old contracts and who do not understand the implications of the current contract. This is like buying past performance on a mutual fund when the manager and objective have changed. The other is someone who is just plain "nuts" or a glutton for punishment!

Maybe you have mentioned it somewhere else, but I'm to lazy to look for it. What do you sell and who do you sell for? Seems like you like to jump into these State Farm conversations with the standard statement of "after reading these posts, I don't know why anyone would want to pursue a State Farm agency"

This board isn't going to do squat to change the way State Farm approaches future agency opportunities. You think State Farm actually cares about what a few disgruntled TICA's and some outsider like you have to say? Give me a break. However, it is very educational for those considering becoming SF agents.

A SF agency isn't for everyone and some opportunities are crap and some are good. Lets look at both sides of the table before we act like you would be "plain nuts" to pursue the opportunity.

 

[moonlightandmargaritas]

Also, I don't like paying the taxes, but that isn't a SF rule. It is an IRS guideline. Part of being an independent contractor.

Correct, but misleading.

I am an independent contractor, and have been on multiple producer reward trips where the insurance company has provided a cash bonus along with the trip to take care of the tax bill.

 

[fastrack1]

Correct, but misleading.

I am an independent contractor, and have been on multiple producer reward trips where the insurance company has provided a cash bonus along with the trip to take care of the tax bill.

True, SF doesn't do that and it would be nice, but then you pay taxes on the cash bonus along with the taxes on the trip. Either way, if your are independent, anything they give you is taxable, whether a trip, a plaque, or a watch. Grossing up your income to cover those items can also hurt you as well, particulary if it moves you to another tax bracket.

 

[moonlightandmargaritas]

True, SF doesn't do that and it would be nice, but then you pay taxes on the cash bonus along with the taxes on the trip. Grossing up your income to cover those items can also hurt you as well, particulary if it moves you to another tax bracket.

Right, but one thing based in reality that you've omitted is that you've got the cash.

If you're the one that was "accused" of being in management (what do you guys call them? "AFE"? Agency Field Executive?), I think they're right, that's a comment that could only come from a manager...

I've been silent, but highly entertained, on this whole thread. You guys from the Farm are so highly incestuous, it's very comical!

Let's see if we can "call-a-spade-a-spade" on the entire State Farm "opportunity".

First, to disclaim: I am not, and never have been a SF agent or manager. I HAVE worked closely with SF and have some insight as to the "inner workings".

The entire "You have to have an office so people can come down and buy (read - deal with my not very experienced support staff) auto/homeowner's insurance and they can try to ram a hospital income or overpriced term life policy up their wazoo so they can get a discount" model is seriously passe! Will anyone argue that the direct writers (GEICO and Progressive come to mind) have continued to hurt them? Think the guys in the HO don't know? Why the pressure for life insurance, etc. then?

State Farm is full of CFPs that have never sold a mutual fund, and CLU/ChFC's that couldn't sell life insurance (even after 20 years!) if their life depended on it!

State Farm (and Allstate too, to be fair) have this crazy idea that everyone that buys car insurance wants to have a "relationship" (which will lead to "financial services" production) with the agent. A lot of them just want to buy car insurance. Most of 'em have never even met the agent for crissakes!

So what do you do? Try to sell 'em seriously overpriced term life insurance? Move the "high net worth" to Phoenix (that worked out pretty good didn't it)? Health insurance? Assurant isn't even competitive in most markets. How 'bout an IRA with one of the what, three mutual funds that you offer? Or how about a HELOC that almost nobody can qualify for?

How many people, do you think, are asking their stockbroker for advice on auto insurance?

Gawd, at least Allstate has the Motor Club....

Anybody considering the State Farm "opportunity" whether it's TICA, FICA, MICA, ICA or whatever, before drinking the kool-aid, should consider that the entire business model is a dinosaur.

 

[fastrack1]

Right, but one thing based in reality that you've omitted is that you've got the cash.

If you're the one that was "accused" of being in management (what do you guys call them? "AFE"? Agency Field Executive?), I think they're right, that's a comment that could only come from a manager...

I've been silent, but highly entertained, on this whole thread. You guys from the Farm are so highly incestuous, it's very comical!

Let's see if we can "call-a-spade-a-spade" on the entire State Farm "opportunity".

First, to disclaim: I am not, and never have been a SF agent or manager. I HAVE worked closely with SF and have some insight as to the "inner workings".

The entire "You have to have an office so people can come down and buy (read - deal with my not very experienced support staff) auto/homeowner's insurance and they can try to ram a hospital income or overpriced term life policy up their wazoo so they can get a discount" model is seriously passe! Will anyone argue that the direct writers (GEICO and Progressive come to mind) have continued to hurt them? Think the guys in the HO don't know? Why the pressure for life insurance, etc. then?

State Farm is full of CFPs that have never sold a mutual fund, and CLU/ChFC's that couldn't sell life insurance (even after 20 years!) if their life depended on it!

State Farm (and Allstate too, to be fair) have this crazy idea that everyone that buys car insurance wants to have a "relationship" (which will lead to "financial services" production) with the agent. A lot of them just want to buy car insurance. Most of 'em have never even met the agent for crissakes!

So what do you do? Try to sell 'em seriously overpriced term life insurance? Move the "high net worth" to Phoenix (that worked out pretty good didn't it)? Health insurance? Assurant isn't even competitive in most markets. How 'bout an IRA with one of the what, three mutual funds that you offer? Or how about a HELOC that almost nobody can qualify for?

How many people, do you think, are asking their stockbroker for advice on auto insurance?

Gawd, at least Allstate has the Motor Club....

Anybody considering the State Farm "opportunity" whether it's TICA, FICA, MICA, ICA or whatever, before drinking the kool-aid, should consider that the entire business model is a dinosaur.

I agree with the fact that the system is a dinosaur. However, it has been good to me, but I'm not a TICA, so I'm not complaining.

I also am not management. I'm an agent and have stated that several times here. Its seems that if you don't badmouth SF people don't think you are an agent.

There is no way I would become an agent under the current system. Many of the points you made are correct and I recognize them and don't drink the "SF koolaid" in my office. We try to make business decisions by understanding the shortcomings of SF. There still are plenty of people out there that do want to buy based on relationships and not just on price. Thank goodness SF has the reputation and relationships that it does or I would have gone out of business a long time ago.

I'm happy with my SF career because they have been good to me. I don't work 40 hours a week and I come and go as I please. I don't care that I don't "own" the business. I knew that coming into the deal. Started this with $0 money and have fed my family well. I also own other businesses, because I don't stick all my eggs in one basket. It is more than can be said for most of my friends who are stuck in jobs they hate.

 

[xrac]

.....State Farm is full of CFPs that have never sold a mutual fund,......

Might have been the case but not now: ....."In December, State Farm Mutual Automobile Insurance Co. of Bloomington, Ill., ordered its 270 independent-contractor agents to relinquish their designations as certified financial planners because the Washington-based Certified Financial Planner Board of Standards Inc. imposed a fiduciary standard this year for its CFP designees......"

Fiduciary issue attracts SEC interest - Investment News

 

[cv3]

Hey - "way back when" - we were approached - about NASFA (National Association of State Farm Agents) - you might want to consider a silent membership in this... Believe it or not - we were approached "Way back when" about being a member... Thought they were nuts - but, they were not.. Honestly, really nice people, and - they have helped your cause. My causes w/SF are long and gone. But they are a good thorn in SF's side.

or dont - not a big deal to me - as i enjoy the independent agent side of life now. Glad to be out of "The Farm" or as one of my clients said "Snake Farm".

 

[fastrack1]

It seems like a couple of you (like xrac and margarita moon man) out there are only on this site to take easy shots at State Farm. I can only imagine the psychological reasons why someone would lurk around a site in which struggling new agents share their pain . . .

It is true that State Farm is so big, and has so much influence on the insurance industry (and yet it is not a publicly-traded company) that if it has any weakness whatsoever, or drops the ball in any way, there are always dozens of people there watching to say, “Aha!” That’s a lot of pressure, but it kind of makes me feel like I am with the prettiest girl at the dance with all that attention.

For brokers out there like XRAC, and MOONLIGHT man (are you a broker MOON? I mean, do you really suit up and fight it out on the street and sell stuff? Or are you tucked away neatly in a dimly lit cube somewhere stapling forms together?) How much attention are your dates getting? (The carriers YOU write for?) Oh, she is not that significant to notice or pay attention to? Just another whore on the block perhaps?

What’s that you say? Oh, you have as many as two, three, or four carriers you can place clients with? Terrific! But it turns out that each carrier is a part of a part of a part of something owned by some other company that makes toasters.

Perhaps you were you like some of the brokers I know that for years exclaimed what a great company AIG is for their clients. Oh, that’s right, it was only a PART of the company that was really really bad. Well thank goodness it was only part, otherwise it might have caused a mess.

Don’t get me wrong. I, for one, am very grateful to have a couple established independent agents on my block. They come around about once a month and leave their cards and beg my staff for the risks State Farm doesn’t want to write. I gladly send over those turds I wouldn’t want in my book of business, let alone coming into my office.

Even better, when their good clients get the shaft on a claim, or get the “slow pay” treatment, or are told to call an 800 number for service (sometimes while they are standing in the broker’s office) my office is conveniently located and my staff and I are ready for a “relationship”.

While I might not be able to calculate the Beta of a portfolio of funds with a slide rule, or even its Treynor ratio, like many State Farm agents, I have set up dozens and dozens and dozens of clients in State Farm Mutual funds (a top fund family in Barron’s magazine for all of 2008—read the Feb 2009 edition). Most of these clients would never have taken an action step to grow wealth on their own. Sure, $50, $100, our $300 a month seems like chump change to the so-called “financial advisors” out there who won’t return anyone’s call unless they have a minimum of $250,000 to roll over. But being a financial catalyst in the lives of these clients my office has a “relationship” with continues to make a huge difference in their lives. For the first time many of them are getting their financial acts together.

Indeed, it is easy for a couple of independent brokers to launch critiques from the cheap seats on a site in which a bunch of State Farm new agents vent and share their pain—I suppose it makes you feel more significant in some way. For my part, I regret being so candid with airing what dirty laundry the company has, though I stand by my posts. I didn't realize others would take such delight in it.

But please be aware: though State Farm is not the most nimble and reactive company, it is working with the best minds available to “dial in the numbers” correctly so that it gets the best talent for agents, and the best clients for our mutual risk pool. Therefore, XRAC, and MOONLIGHT, and other brokers out there delighting in the struggles of others: we really don’t want all your clients. We don’t even want most of them. We just want the best ones, and we are working on having a "relationship" with them.

Friggin awesome post. There is no need to add anything to that. Legion is the man

XRAC and MOONLIGHT, reveal who you really are

 

[moonlightandmargaritas]

Boy, you Farm boys (and girls) sure get your panties in a wad quick!

I figured we would get an objective view from inside the inner sanctum....

Friggin awesome post. There is no need to add anything to that. Legion is the man

XRAC and MOONLIGHT, reveal who you really are

Sure, I'll be happy to.

But since you laid down the challenge, it's not unreasonable to expect you to go first.

Who are you?

 

[fastrack1]

Boy, you Farm boys (and girls) sure get your panties in a wad quick!

I figured we would get an objective view from inside the inner sanctum....



Sure, I'll be happy to.

But since you laid down the challenge, it's not unreasonable to expect you to go first.

Who are you?

I've already made it pretty clear on this forum that I am a SF agent. What else do you want to know?