Allstate V State Farm - Worried Wife

[holly_sue]

Hello! My husband left his upper management bank job after 34 years. Now he is in touch with both Allstate and State Farm - both that have contacted him through LinkedIn regarding opening an office. My questions are:
Is one company better than the other?
If he does should he start his own or take over existing (buy the book)
How much $ are we talking if he starts his own over buying in existing.
Obviously I am concerned. We are older (over55) and we have $ but I worry that if we spend it we won't get it back anytime soon or in our lifetime. We have no kids. Thank you all so much for your help in this. God Bless.

 

[holly_sue]

I thought this posted but I am new and do not see it so here it goes again.
My husband left his 34 year banking career. Both Allstate and State Farm have contacted him through LinkedIn regarding opening a branch. My questions are:
1. Allstate v State Farm - which is a better company to work for in this capacity?
2. New branch v Existing branch - how much for each and which is better considering:
We are older (over 55). We can wait a bit for a return but not a long, long time. Which brings me to my last question:
3. Do either of these companies pay you or is it all on you? Signing bonus?
I am super worried, we have $ to invest but I worry it won't work or we will go broke before we see any income. Thank you so very much for your reply. I am a Worried Wife. God Bless.

 

[VolAgent]

I would tell him not to do it and it has nothing to do with Allstate or State Farm. If you are that worried, it will definitely affect him. The stress you place on him at home as he gets started and is running negative will really sour his mood and outlook which will effect his performance. It may be enough such that he will fail when he otherwise might have succeeded. Plus, who needs a miserable home life?

So again, I would simply tell him not to do it. There are plenty of issues with both Allstate and State Farm, but he could also succeed with either one. However, a horrible home life only stacks the odds against him.

 

[NinjaNic]

I second VolAgent.

If he doesn't have any experience in the insurance industry, marketing, sales, prospecting etc. it will be a failure. If he is interested in insurance, he should go work for a firm that he can get some training from. Think of it this way, if someone is reaching out to him via LinkedIn, they need him more than he needs them...

Both SF and Allstates will not allow the types of marketing needed to succeed in today's marketplace (social media, buying adspace, etc.) without going thru rigorous compliance review. You don't see a single SF guy marketing on google or bidding on terms like "state farm austin texas" and furthermore, people aren't searching out SF in the numbers you would think. My office is next to a state farm office and I overheard them talking about trying netquote leads...poor souls.

IMO, I would check out something like NYlife, Principal etc. to get the training and go the life insurance and financial planning route vs. the P&C route with carriers with limited market reach and low policy approval rates.

Btw, the State Farm office next to mine - I have never seen a single person come in to get a quote...in 6 months.

 

[DHK]

I thought this posted but I am new and do not see it so here it goes again.
My husband left his 34 year banking career. Both Allstate and State Farm have contacted him through LinkedIn regarding opening a branch. My questions are:
1. Allstate v State Farm - which is a better company to work for in this capacity?
2. New branch v Existing branch - how much for each and which is better considering:
We are older (over 55). We can wait a bit for a return but not a long, long time. Which brings me to my last question:
3. Do either of these companies pay you or is it all on you? Signing bonus?
I am super worried, we have $ to invest but I worry it won't work or we will go broke before we see any income. Thank you so very much for your reply. I am a Worried Wife. God Bless.

I've been in banking. I was a personal banker, then branch operations manager, and later I was a financial advisor in a credit union. There are way too many types of jobs in banking to make an informed decision about such a transition. I would need more clarification before making a decision and comparison.

First, your stress and worry... is understandable. The only way to feel better... is to have and execute a sound marketing plan.

Second, assume there is NO SALARY. Even if there was, don't ASSUME anything! Assume no signing bonuses either. (I haven't heard of that in the P&C world, but that's not my area of expertise. I've heard of that in the investment world for well-established advisors with clients to move to a new firm.)

Third, while I don't have P&C experience, the key to this isn't the products (although it's more involved than selling checking accounts - that's why it requires licensing), but the MARKETING plan.
- WHO does he plan to market to in order to sell policies? In this case, I mean an "ideal client profile".
- HOW will he contact them?
- WHAT is his differentiation from what they have now?
- WHY will people see him?

BONUS question: Will he have an existing list of bank clients he can contact? Technically, he may not be ALLOWED to have such a list, but it's for a non-affiliated line of business, so it would be a great way to start, assuming he has been in a client-facing position, had some stability in a local market, & built some relationships.

2nd BONUS question: Does he have a SPECIFIC skill and plan of getting bank clients to refer him to other people?


If he has never asked for a referral outside of his customer base before, I would HIGHLY recommend getting Sandy Schussel's Mastering Client Referrals for only $37. It's inexpensive and the BEST I have ever heard.

http://sandyschussel.com/products/


Both Allstate and State Farm also require life insurance and other financial services (subject to how things unfold regarding DOL fiduciary ruling) to be sold as ways to qualify for bonuses, etc. So it's not all just about selling auto, homeowners, business policies, workman's comp, etc. Gotta sell life insurance, annuities, and other things.

I highly recommend checking out the online video training from the Insurance Pro Shop for $35 per month. There is some GREAT training on how to properly conduct a fact-finding session and conveying complex financial concepts in a very simplified manner.
https://www.insuranceproshop.com/insurancemarketing/insurancemarketing.html

This guy's testimonial found on the IPS website may help you feel a little better about learning from these guys:

"A while back I found the Insurance Pro Shop and signed up for their (FREE) weekly newsletters and started applying some of their techniques, and they worked. So, nine months ago, I decided to visit with them to meet Lew and Jeremy. After meeting them, I decided to purchase their Found Money Management System and their Fact Finding DVDs. However, with the holidays and running my P&C business, I didn't get to begin to earnestly study their materials until a few months ago, and then I attended their Found Money Management Boot Camp. In the past three months, I've sold more life insurance premiums, than I did in the previous 8 years. I've placed 12 policies with annual premiums ranging from $800 - $30,000. Their systems and training work. And, now I'm here at their Advanced Fact-Finding Techniques Sales Skills Boot Camp to learn as much as I can from them. Lew Nason has the marvelous ability to make the complicated, simple. He gives small practical helps that can only help to make your agency grow. What a mentor!” John Stewart, FMM - GA (P&C Agency Owner), (16 years) July 2009

When he met with them, he was almost bankrupt. Then he earned all his bonuses, sold his agency... and bought three more!


I know this was long, but let me sum up:
1) I don't know what he's bringing into the job in terms of skills and resources, etc.
2) Yes, the path can be risky and some (many) don't make it.
3) Without a solid plan that can be adapted to "company training", he actually has MORE risk than not having a "supplemental" plan.
4) I have provided two VERY INEXPENSIVE links to help supplement his skills.

Don't rush into anything. Take your time. Review the inexpensive materials and see where it leads. Only by getting new information can you make a better, more informed decision.

However, if you predict that you're going to be a nervous and/or terrified wife and hound your husband each day... this may not be for you. This needs to be a decision that you BOTH make together... or it could tear your marriage apart. Don't ask me how I know, but I know.

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One last thought: PLEASE look at this as a BUSINESS and NOT a job. That's the most accurate way to view how this profession works. Investigate and make this a BUSINESS decision - just like buying into a "franchise" or something.

I did a blog post on my site regarding whether or not it can be a smart decision to finance a business in retirement. While my post was not specific to P&C insurance, you may still find it helpful.
https://david82496.wixsite.com/davi...t/2017/04/29/Finance-a-Business-in-Retirement

 

[holly_sue]

Thank you all so much! Some clarity - He was Regional Mortgage Lending Manager/NY + many other jobs. He was making upwards of 200k. He is a big kahuna as they say. Banking wore him out after 34 years. He has taken all licensing exams and now holds his NYS insurance license. Been looking into this for a year and he is very bright. Regarding having a miserable home life - if my husband decides to do this I am behind him 110%, we are a team

He has experience in all the markets you mentioned + some.

 

[DHK]

He should ask what kind of work ethic and time it would take to replace that $200k/year gross income.

How much income would you be comfortable living on at a MINIMUM?
- How much savings are you willing to deplete to make this work?

How long should he take to replace that $200k/year?
- Can he replace that income in 3 years or less?
- What would it take?

Will the local market demographics support the marketing plan?
- Or will he need to expand his marketing geography to incorporate enough of a population to get the right kind of business?

What kind of time commitments will it take? Do NOT assume that this is a "9 to 5" job. Maybe one day it can be, but I wouldn't assume that in the beginning until he finds his "groove".


Knowing and considering these kinds of factors and asking the "recruiters" and the compensation of various products... will be the most important part of putting a marketing/business plan together.

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BTW, State Farm & Allstate are not going to lead "by price". This isn't a "In 15 minutes save 15% or more" company. The market for these companies is based on their company reputation and is more quality sensitive than price sensitive. So that needs to be factored into the marketing demographics.

 

[WLTHKR8R]

Hi Holly.
First, congrats on your husband's wanting to be on his own. Second, don't listen to any negative information from people that tell you can't make it. It's up to the person. Every company you go with will have their own challenges.

As for the difference...Last time I checked and that was few years so their structure may have changed:

Allstate-you can go in as a scratch..thats starting fresh with 0 policy..or you can purchase existing agency. The price varies on how many existing policies, its mix of clients, etc...with this model- you will start generating income right away.

Statefarm-you will be provided a book of business of at least 2 million book so you get a stream of income from the start . This is only after several months or even years after being an apprentice earning a salary. And the business does not belong to you and cant sell it like Allstate.

If I were him, I would look at the Statefarm model since he will be paid a salary while learning and have opportunity to decide if this is for him.

Im in NJ but licensed in NY as well, PM me with your phone number and perhaps there's other options that I may be able to direct him on.

 

[holly_sue]

He has never worked 9-5. I get it. I appreciate your comments but I really need answers instead of more questions My questions are the same:
1. Allstate v State Farm - which is a better company to work for in this capacity?
2. New branch v Existing branch - how much for each and which is better considering:
We are older (over 55). We can wait a bit for a return but not a long, long time. Which brings me to my last question:
3. Do either of these companies pay you or is it all on you? Signing bonus?

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Thank you sooooo much WLTHKR8R!! He has talked to both and both offer scratch or book. Which is better, looks like you are saying book which is what I heard. Starting from scratch at over 50 seems ambitious to me. Not that he isn't ambitious he certainly is! Book also seems like a safer bet to me - but what do I know - not a lot about this or I wouldn't be here In General - which company has a better profile and does one treat their people better than the other? In other words, what's the word on the street??

 

[WLTHKR8R]

The downside of Statefarm is that if you dont produce and hit certain target, the agency can be taken away-I think..you have to confirm..Also, Statefarm offers so many other products and you need to sell all to get a bonus--also need to confirm..I have a good friend at Statefarm..
Allstate, I dont think there is a target to hit but you need buy purchase the business...need to pay at least 500K to make anything worthwhile.
As far as commission, not sure but I would think they both pay similar range.