Becoming a State Farm Agent

[Premis]

After 2 days of reading I have finished this post. It seems like a lot of the information is mixed between it being a terrible idea for everyone, it being a decent idea, or it being a good idea but only for 2 years.

I am currently in the recruitment process. I am at the stage of developing a business proposal. And although this thread has provided me with several questions I want answers to, it still hasn't given me a good feel for how good (or bad) the opportunity I am looking at is. My situation is as follows:

1. I am currently in my first year as a captive scratch agent for a different company. I'm earning 36% for PC (will drop to 24% next year and 18% the 3rd, then down to 10%) and between 40-50% for life. It's a decent company, but not the cheapest for premiums and somewhat archaic. Really good people/managers.

2. I am single, in my late twenties, no kids, very little debt (5K credit cards, car payment).

3. The book I'm looking at has 2000 autos and is based in a small town in the midwest. Town population is about 11,000 but has several sorrounding communities. I would estimate my total market to be between 20,000-22,000 people.

4. I have a business degree and an entreprenuerial degree from a big ten university. I have owned my own company before and was fairly succesful with it.

5. I view my skills as more managerial than sales. In other words, I would be better at managing a sales team than actually doing all the selling.

So what do you guys think. Given my situation should I go for it? I know I need to make up my own mind but I would love some input from people in "the know"

Thanks.

 

[briko3]

If you were to build a sales team, what would the their incentive to work for you? Usually people starting out want training from a successful sales person, which you admitted you weren't.

 

[Aydin]

State Farm put me through hell (getting in the pool, Agency Intern, TICA), but they trained me and I am now an Independent Agent. Here in Michigan, I can sell Homeowner policies for 40% of what State Farm charges so price gets me in the door. Once I meet with a new client, the goal is to learn as much as I can about that person and his family. After that, if it makes sense, I ask them to consider investing (maybe just some of what I saved them) into a Life Insurance Policy or Roth IRA or Annuity (4% versus SF 2%) or whatever might fit their needs. I want to stress that my recommendations are based on their needs NOT mine.

I actually take a holistic view of their situation and make recommendations based on their needs. Maybe it is something simple that doesn't involve any of my products (i.e. advising them to set up a will or helping them devise a plan to get out of debt), but I spend some time with them and try to be viewed as someone they can trust to give them good advice. State Farm used to preach that in the classroom, but in the real world they wanted me to sell Life & Financial Services to everybody. They also said you have to take price off the table. I've been a professional sales person for 25 years and price is always on the table. It might not me the most important thing, but it is still a factor. If it wasn't, I would drive a new Cadillac instead of a new Chevy. Oh yeah, I wouldn't have researched the price of my new Chevy either.

 

[code9law]

Well put ! Lets not forget the pushing of the stupid SF credit cards, The 5 or 6 poorly managed MF's which are the end all of financial planning, some 26 yr old AFC busting your balls....ohh yeah he did 3 mill in 2 yrs but wanted to teach,ha ha.. The NECHO system created in 1968.....Ohh dont forget the bankrupcy and divorce you can look forward to and the new eager TICA in 2 yrs taking over what you started.....Go inde young man! Save yourself.......

 

[newagent2010]

Hey guys I am going throught the start farm new agent opportunity right now as we speak.

I am not an approved candidate yet..however I have been in insurance sales now for 4 years as a financial producer doing life / annuities...etc.

My question is this...if I become and approved candidate how often to positions within the company come available.

There are a 2 older agents in my area who could retire soon and then the stare farm packet says that there are other ways to start and agency..I am assuming Scratch agency.

How is the turnover in these positons?

I mean I feel like I am a very impressive candidate because I have been a top producer for another company and I think state farm will continue to like me and hire me however...I realize that once you are an approved candidate you can sit on the sidelines waiting and waiting for an opportunity.

My family and I are NOT willing to move so we know this limits our options.

That being said I didn't know if state farm had a candidate that they really believed in would look at faster ways to create and opportunity?

Any feedback would be great!

 

[CaptiveAgent2009]

Hey guys I am going throught the start farm new agent opportunity right now as we speak.

I am not an approved candidate yet..however I have been in insurance sales now for 4 years as a financial producer doing life / annuities...etc.

My question is this...if I become and approved candidate how often to positions within the company come available

Depends on the area. If a growing area, they could put a new market there. Or you would just have to wait for an agent to retire, or wait for an agency to open unexpectedly (death, taking a leadership position, etc).

There are a 2 older agents in my area who could retire soon and then the stare farm packet says that there are other ways to start and agency..I am assuming Scratch agency.

Scratch or additional intern are the two other ways. AI means you are waiting around for a position to open up unexpectedly. Depending on the size of those older agents, some one in management could always decide to go back into production and take over a retiring agency.

I mean I feel like I am a very impressive candidate because I have been a top producer for another company and I think state farm will continue to like me and hire me however...I realize that once you are an approved candidate you can sit on the sidelines waiting and waiting for an opportunity.

Everybody that has made it through the process to become an approved candidate is 'impressive'. They dont expect to hire average agents. SF has enough of those. They are appointing what are hoped as high performers. ANd no, you cant just wait on the sidelines indefinitiely. If you dont post for an agency within a time period (2 yrs i think), you may have to go through the process again.

My family and I are NOT willing to move so we know this limits our options.

That being said I didn't know if state farm had a candidate that they really believed in would look at faster ways to create and opportunity?

if you are not going to move, you are going to have to wait for a scratch to be created in your area, wait for a traditional opening, or apply for the Additional Intern (if they have one for your area). They wont create a scratch opening based on a potential candidate. it would be based on the area - growth potential, market share, etc.

 

[newagent2010]

Thanks...can you elaborate on the additional intern?

 

[fastrack1]

Well put ! Lets not forget the pushing of the stupid SF credit cards, The 5 or 6 poorly managed MF's which are the end all of financial planning, some 26 yr old AFC busting your balls....ohh yeah he did 3 mill in 2 yrs but wanted to teach,ha ha.. The NECHO system created in 1968.....Ohh dont forget the bankrupcy and divorce you can look forward to and the new eager TICA in 2 yrs taking over what you started.....Go inde young man! Save yourself.......

I would hardly say the SF credit cards are stupid or the MF's poorly managed. Neither is true. They are quite good products. However, you are 100% on everything else!

 

[newagent2010]

One thing I heard yesterday from a buddy of mine who was an approved candidate.

He said he got the feeling going through the State Farm process to be and approved candidate that they were very "Corporate feeling".

He said even thought it was slightly corporate feeling he felt even after years and years of success and if you proved yourself...if state farm were to call your office one day and you were not there they would not like it.

long story short he didn't get you have as much freedom as the other companies.

I work for one of the big name companies now and I can tell you first hand it is virtually impossible to get fired unless you do something very wrong.

Is this true about state farm?

 

[AgentZ]

The new contract at State Farm is a recipe for Bankruptcy. They are paying about 1/2 the commission they did prior agents. Agents are filing BK in record numbers now these are agents on the AA04/AA05 contract. It's basically a 8% contract. You will get a default rate of 10% the first 2 years. Talk to 10 agents that started in 2004-2007. Prior agents on the AA97 or the previous contract have done well , but have not been thru what the newer agents have. They will tell you that all the agents on the nasfa.com site are simply disgruntled agents that failed. Most agents take a pay cut after default rate is over (2 years) . They are telling prospects that they have to borrow $250,000 now to make their agencies work. There have also been many agents that have done well only to be told in month 11 that they will not be getting their contracts. Remember you start on what is called a TICA contract which is a one year deal and after that one year you either get your more permanent contract or are sent out. Agents that have been in the top 5% in their areas are filing BK's at years 4 and 5. If it's such a good deal why is SF having so much trouble getting candidates in many areas. Now I know agents on the AA97 contract will come in here and say we are malcontents and have bad attitudes it's not the case.

The new contract is a terrible deal. It's variable comp and if you have just one year you can go from 10% to 8% or let's say 8.5% on auto and fire and your income will be cut some are taking sizeable cuts in income. If you are considering Agency with this company talk to 10-15 agents that started in 2004 to 2007 that are off the default rate. I have yet to meet an agent that stated scratch after 2004 that got their contract but I am sure there are some but they are few and far between. You must read the real accounts of what the AA04/AA05 contract has done to people's lives. I personally have talked to over 100 agents on the new contract and have only found a handful that are doing well. They are churning agents. Some agencies where agents started in 2004 and that agent quit are still not filled due to the word getting out how bad this contract is. Once again talk to at least 10 agents hired in 2004-2007 to see how they are doing and what they think of this current contract. It's a business model that leads to many bankruptcies. Please do not let this ruin your life as it has so many others. It is a recipe for disaster