I guess you need to be clear on what you want out of your insurance career.
DO you want to be a 'company man' and be under the thumb of a large corp for the rest of your life?
The biggest drawback to the Farm is that your not really building any equity, and you are still under their jurisdiction if they decide they don't like you, etc. They CAN fire you, you don't own your agency.
On the flip side owning an independent agency can be great, for all the reasons mentioned above, but there is more risk, more stress, and it's tough to get markets.
So, I think an important question to ask is "where do I want to be in 10 years?" believe me, starting out and then deciding to change course after 5 or 10 is a major, major pain in the neck.
I took the test to become a State Farm agent, got accepted, was going to start their training program...
But then I spoke to a good friend of mine and he encouraged me NOT to do it.
Sure if you work their system and play with their balls and bats, then yes, I imagine you can make money.
However I wouldn't want to deal with all the red tape.
Matter of fact I just called my friends office and I spoke to his secretary and she told me that she feels that at times he thinks he made a mistake.
I am sure it can go both ways. Do you want to work for a large company that has a little more red tape or do you want to work as an independent? I would look at my skill set and my risk tolerance level and go from there.
My husband is a TICA scratch agent for over two years. We never were offered a loan at the start, and there was no salary paid for my husband for a year, he had only a few months of training. SF didn't license our employees. When did that start? I guess our timing was really off.
As a scratch agent it difficult to staff -- no advice on how to find people...just spend more money on Monster. The financial promises made by SF fall very short. Their business model in recruiting agents is off the mark considerably. We are very much in debt and the afo does nothing to offer support but threaten to let us go. Its a big secret on the forumula to get your permanent contract. It seems to be at the whim of the AFE.
Never a word of encouragement or advice...just sell more life and bank products!!! You could add a 1000 car to your book in a month, but you will still be hassled to sell the products older agents refuse to sell -- loans and bank products. No tools or resources to make it happen, just continued threats.
Other TICAS are in the same boat. A friend is a TICA in another state and its the same story. Business is good, its the pay that stinks! The debt comes from marketing and paying salaries, we don't pay ourselves --still! We are not giving up, we hope state farm makes good on their promise and we start reaping the rewards on our hardwork.
Wow, what different views on SF. I am considering it, but based on what has been said here I am not so sure? I am going to go through the interview process, just to learn more, but will have serious questions before I would jump in.
Wow, Sailor have you had any good experince with SF? I know 4 STA's and a few that went to management one happens to be my best friend and they have nothing but good things to say. Sure they worked hard in the begining but it is all paying off now. I am also going through the process and my eyes are wide open. I'm in an area of sales that is not very stable right now (Real Estate) and I know there are risk but when you do any type of sales it's always about the numbers.
My negativity is directed at the recruiting process, and the relationship between management and the agents.
SF has been fantastic to my family. I am very fortunate. I have no debts, and have the freedom to spend time with my young children. The agents, claims and underwriting partners are fantastic.
My beef is with the treatment of the new tica agents. It is not ethical in my opinion.
Good luck to you. Use your real estate contacts to write HO's. We have had good luck, getting referrals from mort brokers/realtors by getting dec pages to them asap, and giving $10 gas cards for their referral. Also the Phoenix first to die policy is very competitive (at least in my area) to cover the mortgage.
I ran into all of the above and more as a Captive Farmers Agent. I looked at the Allstate process and it is the same. It is really difficult to make a living with any of these programs for the first 5 years. At that point your renewals are paying your expenses, but you still have to hustle the financial and life to make a good living.
I hit all my numbers, won the plaques and awards and even then decided it was too long a road to travel. I was never told the whole truth and a lot of things were brushed over or not mentioned at all. They have tightened the programs so much it is nearly impossible to make it.
The most useless person in the Farmers organization? The District Manager.
They say you should hear it from someone that has actually been there. Then that is me . I was a TICA & I did earn my contract. What has been said is true. This AA05 contract has ruined lives, it has caused divorce and bankruptcies. I know an agent that started around the time I did and he is leaving agency after 3 years of trying to break even. You WILL go $100,000+ in debt with an average book much less one of less than 1000 cars. They will show you template of what you are supposed to make, but you won't come close to that. I know of TICA that were in the top 20 in the nation that didn't make that so what about the other 800-900? I easily got my contract, it was never in question.
Most of the money is spent on payroll and marketing. In the past with these books of business they would have let you have 2 staff. Now they "suggest" you have 3 full time and a one or two part time "team members". My payroll was over 65% of my gross my 1st year. Show me a business model that shows that will work. If you don't sell enough the first year be prepared to hear you won't get your contract. I personally know of an agent that was almost on time to travel & they told him in month 11 that he was NOT getting his contract. He had borrowed over $50,000 and had a multi year lease.
The contract is very ambiguous & the CO. can basically change it at anytime. They are not sending prospective agents to agents that have been around over 3 years that started as TICA's. Go see like was said 5 of them before you make this mistake. If you are willing to go for it then have NO debt going in a spouse that makes more than what you need to live on. Think twice and think again.
Now then you may ask about me? Finally after all this time I have started to make progress on my debt so for me its worth it to stay. There are some benefits but you ask me if I would do it all again with my knowledge and I would say "absolutely NOT"
Originally Posted by Sailor
My negativity is directed at the recruiting process, and the relationship between management and the agents.
SF has been fantastic to my family. I am very fortunate. I have no debts, and have the freedom to spend time with my young children. The agents, claims and underwriting partners are fantastic.
My beef is with the treatment of the new tica agents. It is not ethical in my opinion.
Good luck to you. Use your real estate contacts to write HO's. We have had good luck, getting referrals from mort brokers/realtors by getting dec pages to them asap, and giving $10 gas cards for their referral. Also the Phoenix first to die policy is very competitive (at least in my area) to cover the mortgage.
Maybe things are different in CA. FYI I traveled my first two years and the regular way not the alternative way. I know several agents besides me that are close to or over $100,000 in debt. You haven't gone through it. Sure you can always say "sell more" that's the DAFO's answer to everything. I have been in the top 10% of my regular AFO every month and I am just now working to pay off the debt. You know how ? By cutting expenses to the bare bones, still working 12 hour days cutting staff in half. Working every referral and X-date and not spending a dime to do much of anything else. My spouse and I have not exchanged any gifts since I started here, now that may seem insignificant but on Christmas day to not give anything is painful. We were promised so much and very little was delivered.
Sales are good but pay is not. You go be a TICA and put your money where your mouth is or get some better info so you will be really informed as to the truth of it all. Many of the TICA bought the furniture package they "suggested" it cost from $15,000-$23,000. Yea they supply the computers but not the ink, toner or paper. They don't even pay postage on the many things you still have to mail in. Most of the telephone numbers to the regional or corporate are not toll free.
As for the business plans you give them an honest good plan and the tell you to try again. They want numbers that have never even been closely accomplished by any previous agent. They want you to continue to grow your P&C by 5 times the state average to maximize your compensation. Bottom line here is you can tell us all you want about what it "should or could" be like , but you are just talking the talk, go start walking and the come back and tell us !
Originally Posted by Recruiter1
It would be safe to say that most debt in the first year comes from primarily marketing expenses. Office expenses aren't usually at the top of expenses since you get assistance on all office materials, desks, computers, etc, from SF. Some individuals do incur debts on office furniture because they would rather get their own rather than the furniture available through SF. At that point, it becomes a matter of wants verses needs. Again, a solid business proposal can essentially help you budget your first year.
Depending on where you are, the debt incurred will obviously be different. SF realizes that, so signing bonus are different according to the market you are entering. The current minimum is 18k. I am recruiting to an area that right now where I can offer a minimum of 24k for example.
It is also possible to quality for additional marketing bonuses on top of the signing bonus, but that is at the discretion of the Field Executive you are aligned with and how much budget he has been allocated.
The bottom line is that you are opening a business. As with any other business, you should be prepared to incur some debt. But a well planned business will obviously do better.
I personally haven't seen someone with that much debt, and I'm in California.
Do the math...if you are using 18k cash from State Farm, 25k line of Credit from SF Bank (which every agent receives), and 50k of your own funds (required), then that is nearly 100k of investment in your business already. If your going into further debt then the obvious answer is that the agent is not producing at a sufficient rate.
They say you should hear it from someone that has actually been there. Then that is me . I was a TICA & I did earn my contract. What has been said is true. This AA05 contract has ruined lives, it has caused divorce and bankruptcies. I know an agent that started around the time I did and he is leaving agency after 3 years of trying to break even. You WILL go $100,000+ in debt with an average book much less one of less than 1000 cars. They will show you template of what you are supposed to make, but you won't come close to that. I know of TICA that were in the top 20 in the nation that didn't make that so what about the other 800-900? I easily got my contract, it was never in question.
Most of the money is spent on payroll and marketing. In the past with these books of business they would have let you have 2 staff. Now they "suggest" you have 3 full time and a one or two part time "team members". My payroll was over 65% of my gross my 1st year. Show me a business model that shows that will work. If you don't sell enough the first year be prepared to hear you won't get your contract. I personally know of an agent that was almost on time to travel & they told him in month 11 that he was NOT getting his contract. He had borrowed over $50,000 and had a multi year lease.
The contract is very ambiguous & the CO. can basically change it at anytime. They are not sending prospective agents to agents that have been around over 3 years that started as TICA's. Go see like was said 5 of them before you make this mistake. If you are willing to go for it then have NO debt going in a spouse that makes more than what you need to live on. Think twice and think again.
Now then you may ask about me? Finally after all this time I have started to make progress on my debt so for me its worth it to stay. There are some benefits but you ask me if I would do it all again with my knowledge and I would say "absolutely NOT"
Wow! What and eye opener! This post is a must read for anyone considering going with SF. Thanks!
Jesus Christ Superstar, this is some crazy sh*t. We don't want anyone buying the farm trying to sell the farm now do we? Like a good neighbor, give me a beer. SF just presented a 47% rate increase on homeowners in FL. Palm Beach is taking it without the KY. Granted, we do live in hurricaneland but can we just dump some big ice blocks in the Atlantic off the coast of Africa?
------------------------------------
Michael R. Hrad
Principal Managing Partner
Insurance Benefits Group
Health Insurance Professionals LLC
I am new to this forum and in the VERY beginning stages of trying to become a state farm agent. This thread started out optimistic and positive and as I kept reading turned a little negative and there seems to be some tension.
Although I do have a very successful agent as a friend and mentor I also have cards stacked against me... age, credit, and education... I have a lot of sales, management and entrepreneurial experience though, I have a strong business plan and I am numbers driven. I have literally dropped everything in my life to focus on getting my own agency- but not just any agency... I have fallen in love with State Farm culture.
Now, back to the process... does anyone have suggestions for business plans, the interview process, a time line from start to finish ect? From your experience what worked well and what didn't. I'd just like to gather other opinions besides my mentor's to make sure I'm as prepared as possible.
Thanks so much!!!!
Birdie
Last edited by Birdstheword84 : 08-01-2008 at 11:57 AM.
Sba.gov will have sample plans and good tools and resources to help you design a plan. Also check out your local library and bookstores. I bought the "Dummies" Business Plan Kit. It was helpful but you need to do your market research. Look at local government sites for demographic info. AND PLAN TO SPEND HOURS AND DAYS creating your plan. Good luck.
Okay again its not negative its reality. Some of the agents on the older contracts really don't have a clue as to how the "new deal" works Before 2004 they paid your staff & many expenses for start up now just a sign on bonus and some marketing money. You can have the best business plan in the world but its not going to keep you out of deep debt. You better make sure you can borrow or have saved up to $100,000 and your spouse can support your household for at least 5 years.
GO TALK to some Agents that started in 2004 or just after that were NOT previously in management. The company is losing agents IMO at a record pace more than anytime in history. In months 3 (in pre-TICA and month 14 (Last month of 12 month TICA phase) they are being cut loose they are told "you didn't make it". These are people who put their entire lives at risk and are $50,000 in debt & have 2 more years or more on a lease that is $1700+/- a month.
You want the path of all this. 1. You are sold on being an agent for them & it looks Awesome 2. You do it all business plans, panel interviews, site interviews etc and you are HIRED ! 3. You train & do field development & get assigned unless they think you won't make it then you are cut loose here (remember month 3) 4. You sign your TICA and away you go. They make many "suggestions" as how to run your agency & as how to spend your $. You may be given a book ( or some are scratch & we can discuss that another time just ask) but other agents will raid it to the point some are less than 50% of what you walked in on day 1 (they will DO NOTHING to preserve the book for you) they will tell you they own the policies but see what happens when the policyholders start switching (they will do NOTHING) just tell you to "sell more." 5. In month 11 of TICA phase after you are $30,000-$50,000 in debt you will either get your contract or be sent out. 6. After 2 years the default rate on P&C commission is variable and MOST take a pay cut (ask them what the % is and you will not get the same answer twice , they will just ask " you are not going to be an average agent are you?") and it can be up to 1.5% REDUCTION on P&C. This could be enough to pay for one "team member" or what most real people call staff 7. After you get the default removed and you pay is cut all you can do is cut expenses. Hopefully you have done this in time to save yourself & family from financial ruin. You are still working 12 hour days but instead of 3-4 employees you have one or two. You hope each 1st & 15 th your compensation is enough to make payroll and pay expenses. You hope your spouse still believes this is a "great opportunity" You hope you can survive another year and you hope they will wake up & pay you closer to industry average. You either tuff it out and realize its a job that pays what you could get working for someone else without all the risk and debt after 5 years, and if you work hard and can sell eventually you get out of debt and start saving for retirement because this contract provides NO retirement and you will NEVER be able to retire unless you save enough $$$.
IS this a clear enough picture of agency with THEM, Wonder why fathers that are agents are mostly discouraging their sons and daughters from being agents? What once was one of the most sought after jobs in the industry is one that is no longer. For all intensive purposes you are an employee except you are disposable and they will send you out and plug another person in if you don't make it. When reality sets in after 3-4 years and the Grape Kool-Aid has all been drunk then you will remember, hey it wasn't like I wasn't told this would probably happen. No this is not the way it happens for all. Some get a break on a retiring agent & due to logstics get a much bigger than average book. Others go in to management which can be a good deal if you can be a robot for 3-4 years. Good luck
Originally Posted by Birdstheword84
I am new to this forum and in the VERY beginning stages of trying to become a state farm agent. This thread started out optimistic and positive and as I kept reading turned a little negative and there seems to be some tension.
Although I do have a very successful agent as a friend and mentor I also have cards stacked against me... age, credit, and education... I have a lot of sales, management and entrepreneurial experience though, I have a strong business plan and I am numbers driven. I have literally dropped everything in my life to focus on getting my own agency- but not just any agency... I have fallen in love with State Farm culture.
I have been lucky enough to join my mentor on his speaking tour- going to a few State Farm agent planning meetings and seeing what goes on behind closed doors. This company and it's agents are amazing- I would give ANYTHING to be a part of it! I've had the opportunity to speak candidly with some of the top agents, some of the most experienced agents and some very green, brand new agents- I've heard about their struggles and frustrations and their success and good experience more than over compensates for it.
You can start from scratch and go into debt, make very little money for the first few years and then become a great success, or... if you're lucky you can take over an existing book/office and receive instant gratification for your hard work. I'm obviously hoping for the latter.
Now, back to the process... does anyone have suggestions for business plans, the interview process, a time line from start to finish ect? From your experience what worked well and what didn't. I'd just like to gather other opinions besides my mentor's to make sure I'm as prepared as possible.
Sorry but I didn't answer you question. There is a template for that business plan asks your friend the Agent for it. The business plan is important but mostly they want to see how well you take criticism after you submit it the first time. A lot of the things you won't have a clue about and they know that. Things like internal marketing systems, actual compensation (not that template they show most people), start up costs etc .I would call a few agents that have been around less than 2 years and they will share their plans and give suggestions. Most people stress over this with them but the content is not any more important than how you present it to them.
A business plan is an important part of any successful business but they are not looking for a 50 page plan with charts and graphs just a clear concise plan that has the high numbers and action plans as how to get them. They will want to know how much you will spend and how much you need to sell to get there. Now you won't make (earn) what they say you will, but they don't know you know that so just plug in some high numbers and constantly talk about how important you KNOW it is for absolutely EVERYONE to have more life insurance and they will think you are just awesome. Have real life stories about how having or not having life insurance impacted people's lives and you will be 3 steps ahead of your competition.
AgentZ, I appreciate you shedding light on this "opportunity." At first read, I figured you were just negative but after reading more of your posts, esp. this last one, I think you are really speaking truth from experience. I have talked to a couple of agents in my state who are TICA and they still seem excited (but why would they tell me something negative - --it wouldn't look good on their behalf). They have all told me that they haven't taken a paycheck (most are coming up on one year) and that all compensation after expenses, including salary, is put back into the agency. But they also add that SF "takes care of them" sort of like, don't be concerned about finances.
However, I have several calls into other TICA agents who won't return my call....makes me wonder.
Because P&C and Life is what I know best (been in it for 10 years), this is what I want to do, own an agency. Have you heard anything about opportunities with other carriers? I know Farmers pays much better commish but apparently the company sucks. I'm considering American Family. Have you heard any news on this agency opportunity.
Again, AgentZ, thanks for your insight; it's really got me thinking and I truly hope that things work out for you so you can actually share in the gift-giving with your spouse this Christmas.
MM
</IMG>
Are you off the 2 year default yet ? What is their P&C comp after the first 2 years compared to the 3rd and 4th ?
Remember this contract only really got going in October 2004 and those agents were on default for 2 years. They do get 1% now more on default than those that started back then did but the bonus is different. I really have worked hard and done well as far as sales in my agency its just the compensation is not close to what they promised and I have a good book of business. WE keep hoping they will wake up, but as long as Ed is in charge We doubt it. There is still opportunity there and it a pretty much permanent career just that agents now will never make close to what agents did 15-17 years ago or even the ones on the previous contract.
My old Boss said " watch out those BIG companies just look out for themselves these days" Boy was he ever right.
I will ask any questions I can. Good Luck !
Originally Posted by magicmarker
AgentZ, I appreciate you shedding light on this "opportunity." At first read, I figured you were just negative but after reading more of your posts, esp. this last one, I think you are really speaking truth from experience. I have talked to a couple of agents in my state who are TICA and they still seem excited (but why would they tell me something negative - --it wouldn't look good on their behalf). They have all told me that they haven't taken a paycheck (most are coming up on one year) and that all compensation after expenses, including salary, is put back into the agency. But they also add that SF "takes care of them" sort of like, don't be concerned about finances.
However, I have several calls into other TICA agents who won't return my call....makes me wonder.
Because P&C and Life is what I know best (been in it for 10 years), this is what I want to do, own an agency. Have you heard anything about opportunities with other carriers? I know Farmers pays much better commish but apparently the company sucks. I'm considering American Family. Have you heard any news on this agency opportunity.
Again, AgentZ, thanks for your insight; it's really got me thinking and I truly hope that things work out for you so you can actually share in the gift-giving with your spouse this Christmas.
MM
</IMG>
Re: Becoming a State Farm Agent
Linear Mode
