I've been an agent for 10 years. Have grown by an average of about 160 cars per year. My overhead is about 200 grand with three staff in a rural area. Of course, $24,000 of that is rent to my wife and I.
When I read these stories about how TICA's are treated, it just blows my mind. I've seen some heavy handed treatment here and there, but overall, it just doesn't look like the State Farm I know and love. However, when I tried to go out of Region/Zone to be an agent way back when, I was a bit taken aback. There are all kinds of management people out there, some very moral and some not. Some competent to advise and mentor and many, not.
If you run the numbers and see where your income is going to be worth the sweat and investment within a reasonable amount of time, stick with it, guys!
It sickens me to think I almost went forward with the SF hiring process. I am at the phase where I have to create a Business Plan. I have owned an independent brokerage for just over two years now. I cannot imagine investing any money in a book of business I don't own, my recruiter never mentioned anything that was mentioned above particularly the investment from my pocket. I was looking into the SF alternative because I felt my agency wasn't growing fast enough for what I have invested and wasn't a good return for what I am currently receiving in pay.
I have invested nearly $100k into my business, I am at the point now where my book of business is $600k in premiums per year. This grosses me about $2,500. per month in my pocket each month clear after expenses, although I must add my expenses are pretty low. I have two full time licensed staff in which I pay one $11. hr and another $15. hr. I also have 3 agents who work on commission. I was looking into SF thinking the potential may be greater or there was a better future (ie they provided a retirement program or benefits). I guess I should tell the recruiter to take a hike and be happy and content that we are growing at the rate we are even with the economy the way it is.
I can't believe anyone would want to put so much money into a program like this. To me it appears like you have bought a job. If any of you want to come to work for me, I can pay you 2k a month if you give me 50k up front, chalk it up to a loss and sell tons of insurance for my book. Im not trying to sound rude but this appears to be the stance that SF has taken. I know your not giving the money directly to them but its definitely in their best interest. As an independent, I don't have anyone looking over my shoulder, if a company makes me angry I can roll the business to another company I am appointed with. If a company lowers commissions or demands production levels I drop em and move on. I am a member of a cluster and have over 40 different companies I can write business with, most of whom seem to have better commissions on their renewals than SF gives. I don't know what SF is thinking but I guess I know where to start recruiting for my next agent.
Last edited by Independent : 10-24-2008 at 02:08 AM.
It sickens me to think I almost went forward with the SF hiring process. I am at the phase where I have to create a Business Plan. I have owned an independent brokerage for just over two years now. I cannot imagine investing any money in a book of business I don't own, my recruiter never mentioned anything that was mentioned above particularly the investment from my pocket. I was looking into the SF alternative because I felt my agency wasn't growing fast enough for what I have invested and wasn't a good return for what I am currently receiving in pay.
I have invested nearly $100k into my business, I am at the point now where my book of business is $600k in premiums per year. This grosses me about $2,500. per month in my pocket each month clear after expenses, although I must add my expenses are pretty low. I have two full time licensed staff in which I pay one $11. hr and another $15. hr. I also have 3 agents who work on commission. I was looking into SF thinking the potential may be greater or there was a better future (ie they provided a retirement program or benefits). I guess I should tell the recruiter to take a hike and be happy and content that we are growing at the rate we are even with the economy the way it is.
I can't believe anyone would want to put so much money into a program like this. To me it appears like you have bought a job. If any of you want to come to work for me, I can pay you 2k a month if you give me 50k up front, chalk it up to a loss and sell tons of insurance for my book. Im not trying to sound rude but this appears to be the stance that SF has taken. I know your not giving the money directly to them but its definitely in their best interest. As an independent, I don't have anyone looking over my shoulder, if a company makes me angry I can roll the business to another company I am appointed with. If a company lowers commissions or demands production levels I drop em and move on. I am a member of a cluster and have over 40 different companies I can write business with, most of whom seem to have better commissions on their renewals than SF gives. I don't know what SF is thinking but I guess I know where to start recruiting for my next agent.
Nobody that is a good potential SF agent is going to come work for you. I also doubt you'd make it as a State Farm agent as well. Despite some of the negative posts here (not necessarily a representation of the entire company) State Farm tends to hire top notch people. Sorry dude.......
The statement about recruiting State Farm agents was a joke, but even if it wasn't why not? I pay my staff more than most of these agents are making and my staff doesn't even have to invest $50k into my business. I wasn't trying to put anyone down or seem negative to State Farm agents, I have several friends who are SF Agents. It just seems like you all should have had a little more due diligence while proceeding through the process.
Fasttrack you can go ruffle your feathers all day long and insist you are so much better than everyone else around you because you are a "State Farm Agent". You are the chosen one! But I hate to tell you, there are independents out there snagging your clients left and right all day long right out from under your nose because your to busy sticking it straight up in the air. Lose the ego and get to work, you have a quota to make!
Last edited by Independent : 10-25-2008 at 01:15 AM.
Let's back up a little here. I apologize if that came off as a "Flame" on my end. I know that my book isnt much to be proud of just yet, which is why I sought out a State Farm recruiter to begin with, I THOUGHT I might have it better by going with State Farm than continuing on as an Independent. Then I saw all of you guys ranting and saying how bad it sucked to be a State Farm agent and by the time I was done reading your posts I was ready to hit Ignore the next time the SF recruiter called me.
The way you all are making it sound is like I am essentially buying myself into a regular average job. State Farm wants you to put yourself $50k to $100k in debt for what? So you can work for them, be harassed about your sales and when you leave the company they tell ya not too let the door hit your butt on the way out? Pack your desk up in a box and see ya later? What about my investment? Couldnt I achieve the same fate by working for another employer and I wouldnt have had to go into debt?
Maybe I am missing something, misunderstanding the reasn behind why you guys are so angry with the company, but you talked me right out of the respect I have for the company. My wife worked for a State Farm agent for 4 years and she loves the company and how it works, but the agents she worked for were older... seems State Farm isnt treating the younger agents well at all. What do we have to gain in the end?
So, I am still willing to talk to the Sf recruiter, you guys have given me some VERY good questions to ask so that I can consider whether or not I want to give up the independent agency I've built over the last 2 years. I am at a point where I earn enough to cover my overhead, its profit from here and Im not in debt at all. I am glad I came to this forum to learn more, that it might not be all that I was being told it is.
If State Farm is the way you all portray it for new agents, I am wondering what is so top notch about becoming a SF agent- it sounds like you all regret your decision.
I haven't heard one person who was happy with what they got into. I would LOVE to hear the positives so I can make an informed decision. My wife and I have ALOT to offer State Farm, but we arent willing to go $100k into debt just so we can build them an office. We are under the impression that State Farm agents own their own businesses but according to ya'all, they dont.
Let's back up a little here. I apologize if that came off as a "Flame" on my end. I know that my book isnt much to be proud of just yet, which is why I sought out a State Farm recruiter to begin with, I THOUGHT I might have it better by going with State Farm than continuing on as an Independent. Then I saw all of you guys ranting and saying how bad it sucked to be a State Farm agent and by the time I was done reading your posts I was ready to hit Ignore the next time the SF recruiter called me.
The way you all are making it sound is like I am essentially buying myself into a regular average job. State Farm wants you to put yourself $50k to $100k in debt for what? So you can work for them, be harassed about your sales and when you leave the company they tell ya not too let the door hit your butt on the way out? Pack your desk up in a box and see ya later? What about my investment? Couldnt I achieve the same fate by working for another employer and I wouldnt have had to go into debt?
Maybe I am missing something, misunderstanding the reasn behind why you guys are so angry with the company, but you talked me right out of the respect I have for the company. My wife worked for a State Farm agent for 4 years and she loves the company and how it works, but the agents she worked for were older... seems State Farm isnt treating the younger agents well at all. What do we have to gain in the end?
So, I am still willing to talk to the Sf recruiter, you guys have given me some VERY good questions to ask so that I can consider whether or not I want to give up the independent agency I've built over the last 2 years. I am at a point where I earn enough to cover my overhead, its profit from here and Im not in debt at all. I am glad I came to this forum to learn more, that it might not be all that I was being told it is.
If State Farm is the way you all portray it for new agents, I am wondering what is so top notch about becoming a SF agent- it sounds like you all regret your decision.
I haven't heard one person who was happy with what they got into. I would LOVE to hear the positives so I can make an informed decision. My wife and I have ALOT to offer State Farm, but we arent willing to go $100k into debt just so we can build them an office. We are under the impression that State Farm agents own their own businesses but according to ya'all, they dont.
You make great points here and I would like to address a few of them. The problem with the agents on this site is that you are only hearing from the ones that are dissatified. You will always have a certain percentage of people dissatified, no matter what organization you are talking about. I'm also not saying that some of their complaints aren't valid. However, I know plenty of TICA's (I'm not a TICA) who are happy with their situations. I also know plenty of really smart people who have done their due diligence and really want to join the SF team, despite the neysayers on this site.
State Farm is unique in that you don't "own" your book of business, but you also didn't "buy" it to start with. You earn income and retirement from it over your lifetime. You are an independent contractor who can come and go as you please, while having excellent health insurance benefits, free marketing, incredible resources, free help on about anything you can image and the ability to make a decent amount of money compared to the amount of work that you have to do.
Everybody's situation is different. Some new SF guys have gotten screwed while some have hit the jackpot. I've been an agent for 6 years and I know TICA's that just started that are making more than me. Just a matter of circumstances.
My only concern with SF is that I think you can make really good money with them, but not great money. But I have the freedom to pursue other financial interests and I have done that.
Go ahead and talk to the recruiter and every TICA that you can find. Don't just listen ONLY to the people on this site. Just do your own research and make your own decision and then be prepared to live with it. It's easy to bad mouth an opportunity when it didn't work out for someone. Noone ever thinks they might be to blame for any of it (and maybe sometimes they are not).
State Farm is looking for good people and we need good people. If that is you, I wish you the best of luck....
It is always wise to seek out the ugly too, that way you know what you COULD be getting into and in order to help you determine which questions you need to ask. As long as one has an open mind they can process the info they gather accordingly Kinda like a consumer report for insurance companies!
Nepotism is gone. SF is so desperate for agents they are taking people that they never would have looked at in the past.
There largest source of new agents has dried up. The current agency force has stopped referring family and friends to the company. You will not get assigned a book of business large enough to make ends meet. All they care about is slapping up more storefronts.
Keep in mind you do not own a thing. SF owns the policys, and controls the data. I would not "invest" 100k in an SF agency. Put the money into an agency you actually own.
One guy just north of me is the largest auto producer in the zone. He started scratch 4 years ago and still is not making enough money to get his contract. SF is still paying his bills.
Two, new contract agents in my town are top AFO producers. They are in their 3rd year. Both are having severe financial problems.
With the new contract, you are an employee that ends up chasing your tail playing catch up for the rest of your career. Every one of them feels that they were mislead to put it lightly.
Why do I even take the time post this? I am shocked, that SF continually misleads these young kids, with no regard for them.
Direct you questions to me. I will give the no BS answer.
Sailor
I saw the same kind of things from the 1-4 year old Allstate agents I use to work with. I was a Financial Advisor for Allstate working to help the agents with life and financials. I am embarking on a independent agency with 6 carriers. What has your experience told you about how long before an independent agency is financial sound?
It is always wise to seek out the ugly too, that way you know what you COULD be getting into and in order to help you determine which questions you need to ask. As long as one has an open mind they can process the info they gather accordingly Kinda like a consumer report for insurance companies!
Great advice. Unfortunately, the ugly is all that is on this site and I think he understands that. I was just trying to give the other side of the coin.
I have recently been approved to go into the approved candidate pool. I have read these post and they do make someone think twice or more about this opportunity. The reality is it is an opportunity that has risks as with any business. If you don't do well you'll go broke or you'll have to close your doors. I have heard of TICA agents in this market that have been cut in their last month etc with a great amount of debt but were counseled in reviews before it happened.
As far as the company goes I feel it is the best choice out there for this type of career. I have also looked at Allstate's program and was approved through them also( much easier) and their training program is a lot shorter with less pay during. Yes you own your book through them but it is only worth what you may be able to sell it for to someone else or back to the company for 1.5 times yearly earnings. They also push hard for financial services. If you buy a book of business most agents expect 2 to 3 times yearly earnings. So a million dollar book paying $100000 in commissions will cost you $200000 to $300000. If you have that kind of cash going in more power to you but more than likely you'll have to finance it with a business loan that over 10 years will have a payment of $2400 to $3700 a month depending on the price of the book. Do the math on that one. We'll say you get it on the low end at 200k.
Monthly Income from purchased book:$8333
Business loan: $2400
Rent estimate: $2000
1 staff @ $10 per hour $1700
1 staff @ 15 per hour $2600
Advertising $1500
Business insurance $ 150 month
Taxes on employess $250
Utilities $ 250
Phone $ 300
Postage $ 200
Office supplies $200
Plus other expeneses not listed I'm not even putting in here
And you don't take out a check for yourself.
Is a loss of $3217 a month. or profit of $817 if you paid cash.
This does't take in any lapse or cancel rate either. You'll be buying these customers only to have them leave you at 10% to 20% per year. More than likely the $200000 you spent you'll still be making payments on for a good 4 or more years after they are gone.
This all said... YOU HAVE TO PRODUCE AND GROW TO MAKE IT WITH ANY COMPANY. You have to keep ahead of the lapse/cancel percentage and grow above it.
So with Allstate you could be in debt almost $250000 or more at the end of the first year or worst with a smaller book than you started with and how long will it take you to sell it to get out? There are a lot of books for sale all over the US. Scarey!!!
With State Farm they Give you a book this size most of the time in an opportunity other than New Market.
From my research and talking to New Market Ticas with 3 or less years in it I have come to the conclusion that a Scratch agency is very difficult and costly. You'll go into debt the quickest with this one. I would not nor recommend anyone to do a scratch agency with ANY COMPANY not in this day and time and the great amount of competition out there today. Plus you will not get your permanent contract for 5 years with a new market opportunity from State Farm.
With the traditional you only have a year of TICA. Make it through it get your contract and do what you need to to make it happen for you and make your goals happen what ever they may be.
State Farm is not a bad company. They are evolving like all companies are today. They make changes that they feel will better the likelyhood that the company will survive and prosper as an entity and restructure making changes in pay and benefits to do it. How many companies out there are paying their CEO's and executives millions upon millions in bonus when the company is loosing money but laying off the little man making $24000 a year or less? How many workers could keep their jobs if these guys took the cut?
All you new people thinking about this opportunity don't worry about what the older agents contracts are. Some are better some are worse than the current one but if you want this then you go with what they have now. You have to realize that unless you didn't make very much in your old career you WILL have a lifestyle change. You have to get back to the bare minimiums in life and scratch and maybe eat mac and cheese 3 or 4 nights a week to make it. Get rid of all your personal debt. Down grade your autos,down grade your home. Do what you can to go into this with as little needed personal expenses you can manage. If your spouse works cut back to the point that they can cover your living expenses and if possible some of your business expenses also.
All being said in this long post ... I'm very excited about this opportunity and have thought about it for over 10 years just never did it. I hope my perspective may help someone in their lifes decisions.
Thanks to all and good luck to all the old, new, and perspective agents of State Farm!
Excellent, well-thought out post that provides at least a realistic look at SF vs. the competitors. I have posted before here that I get tired of all the SF bashing. Sure, you go into debt, but in what business do you not? SF is not the welfare system.
I wish you the best as you start out. I'm sure you will do well.
Excellent, well-thought out post that provides at least a realistic look at SF vs. the competitors. I have posted before here that I get tired of all the SF bashing. Sure, you go into debt, but in what business do you not? SF is not the welfare system. I wish you the best as you start out. I'm sure you will do well.
At least Newly Approved seems to be going in with his eyes open. It seems that many recent SF agents haven't done that!
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.
Can not agree with you more. I am leaving Farmers, it sadden me that I wasted two years.
My ex DM also has a mortgage company and a title company all under the same roof....
Re: Becoming a State Farm Agent
Kinda like a consumer report for insurance companies!
Re: Becoming a State Farm Agent
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