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I recently started talking to a State Farm recruiter, and have been cleared for the credit. Next step is having informal meeting (full day). Recently ...
I recently started talking to a State Farm recruiter, and have been cleared for the credit. Next step is having informal meeting (full day). Recently I have been reading other users comments about State Farm agency, and they were not very encouraging.
Everyone here has said that the new State Farm contact sucks, but noone said specifically why? Is it that they are expecting to spend a lot on marketing, or are requiring certain number of employees etc, or what? I mean, how can an agent go in 150k debt, when State Farm gives a book to cover the overhead, and the agent works to make money.
I would request any specifics, as what makes the agents into debts.
I'm in full time job, and was looking to make more money by stepping into the State Farm agency. The other option I have is to conitnue with my job, and start an independent agency with some other carrier.
I recently started talking to a State Farm recruiter, and have been cleared for the credit. Next step is having informal meeting (full day). Recently I have been reading other users comments about State Farm agency, and they were not very encouraging.
Everyone here has said that the new State Farm contact sucks, but noone said specifically why? Is it that they are expecting to spend a lot on marketing, or are requiring certain number of employees etc, or what? I mean, how can an agent go in 150k debt, when State Farm gives a book to cover the overhead, and the agent works to make money.
I would request any specifics, as what makes the agents into debts.
I'm in full time job, and was looking to make more money by stepping into the State Farm agency. The other option I have is to conitnue with my job, and start an independent agency with some other carrier.
What would you suggest?
It depends on your expectation of income from the insurance business. In general, a new agent will not make much money unless the agency provide good training and the agent spend money for leads or have a way to get leads free. So you do some calculation and would be able find out if it is worth to quit your current job or not.
Only a fairly new State Farm agent would be able to answer this question. Of course, there are some obvious things....
You need to lease an office space
You need to furnish the office space
You need to 'open' your agency, which means advertising
You need to have staff, which means payroll
You'll have E&O overhead, utility overhead, supplies, etc.
So, if I understand correctly from my brief interview with State Farm, they MAY give you an assignment large enough to cover the rent and employees, and you grow from there.
Some risks:
- Are you sure you'll get the assignment? I know they have scratch opportunities which don't provide this.
- You're book will shrink somewhat after its been assigned to you. During my interview, they admitted this, clients will use the assignment of another agent (remember, you are at least second since their agent retired) to shop their policies. You will have to make sure this is minimized, which shouldn't be hard if you are proactive.
- Can you do things on a shoestring and still make it work? Paying employees a little to much and it takes away from the little you earn. Pay them to little and someone will hire them away from you.
- Do you have a solid advertising philosophy? From what I understand (and what I receive), State Farm agents send out a LOT of mail looking for new clients.
So you'll go into debt, but hopefully, you will have enough business to pay for the debt service. To make the point simply, figure you spend $25K on furniture and signage. I think State Farm finances that for you. They take a payment out every month. Eventually, you own it, but you are initially $25K in debt before you even open your doors. Same thing with the office lease and other parts of getting the door open.
I recently started talking to a State Farm recruiter, and have been cleared for the credit. Next step is having informal meeting (full day). Recently I have been reading other users comments about State Farm agency, and they were not very encouraging.
Everyone here has said that the new State Farm contact sucks, but noone said specifically why? Is it that they are expecting to spend a lot on marketing, or are requiring certain number of employees etc, or what? I mean, how can an agent go in 150k debt, when State Farm gives a book to cover the overhead, and the agent works to make money.
I would request any specifics, as what makes the agents into debts.
I'm in full time job, and was looking to make more money by stepping into the State Farm agency. The other option I have is to conitnue with my job, and start an independent agency with some other carrier.
What would you suggest?
Welcome! Is it my imagination or are a majority of the new people joining this forum from Alabama?
Only one thing I would suggest you consider, who wants a part-time P&C agent? How are you going to insure that service and claims go smoothly if you have another job to worry about too?
Only one thing I would suggest you consider, who wants a part-time P&C agent? How are you going to insure that service and claims go smoothly if you have another job to worry about too?
I thought about that, and had considered hiring someone. I also considered making some kinda sub-contract with some another agent, where I find and refer the clients to other agents. The other agents write the application, and we share the first year commission, and the agent keeps the renewals.
But no other agent (of good rating company) has agreed to do so.
I thought about that, and had considered hiring someone. I also considered making some kinda sub-contract with some another agent, where I find and refer the clients to other agents. The other agents write the application, and we share the first year commission, and the agent keeps the renewals.
But no other agent (of good rating company) has agreed to do so.
You will find this type of agreement is NOT permitted by your State Farm contract.
Everyone here has said that the new State Farm contact sucks, but no one said specifically why?
Redsquash,
Have you read the BECOMING A STATE FARM AGENT thread on this forum?......
Redsquash realize that the thread referred to above also contained several more pages of posts that were deleted because the posters were active SF agents and evidentially someone put them on notice because of some of the things they had written. They deleted their posts because of fear of big brother SF.
I would discourage you from starting an Independent from scratch. Without knowledge of the carriers, the area and the industry in general, you will have an incredibly difficult time. Most carriers here, at least coastal, are not appointing. Without products to offer, you will not be able to make a living. State Farm has an excellent reputation. However, they made a big push to financials about ten years ago. Thier commissions for personal lines P&C are very small, half sometimes of others. They want life/annuities and so on. Truly do your research before you begin a career as an independent. Even with experience, coastal, its next to impossible.
Everyone here has said that the new State Farm contact sucks, but no one said specifically why?
Redsquash,
Have you read the BECOMING A STATE FARM AGENT thread on this forum? It is 30 pages long and includes quite a few specifics. Allow me to point out one for you:
The new contract (AA05) has a component called semi-monthly variable compensation. When you start out as a State Farm Agent, you are paid 11% on the premiums. In year three, it could go down to 8% if you don't hit all of their requirements such as Financial Services (Bank & Mutual Funds) and quality of business ($500,000 house burns down). Three percent might not seem like a lot, but on a two million dollar book it is $60,000.
F.Y.I. = TICA is what they call the new Agents.
ROLL TIDE
TICA,
Thank you so much for the nafsa link and reference. So many people cannot be wrong, even though everyone at SF claims how good SF agent's career is. As I said before on a different post, I'm dropping the idea of being SF agent. My wife is pushing me for going for it, because she thinks she can have a job too, if we have our own agency. I'm not ready to invest 150k to put her into the job, when I know that this 150k will not produce any income. After three four years and 150k down, they will cancel the contract, and a new sucker will gladly jumps in. Thank you SF, and more importantly thank you to this forum and nafsa forum for helping those who are making their mind to get into SF.
Only a fairly new State Farm agent would be able to answer this question. Of course, there are some obvious things....
You need to lease an office space
You need to furnish the office space
You need to 'open' your agency, which means advertising
You need to have staff, which means payroll
You'll have E&O overhead, utility overhead, supplies, etc.
So, if I understand correctly from my brief interview with State Farm, they MAY give you an assignment large enough to cover the rent and employees, and you grow from there.
Some risks:
- Are you sure you'll get the assignment? I know they have scratch opportunities which don't provide this.
- You're book will shrink somewhat after its been assigned to you. During my interview, they admitted this, clients will use the assignment of another agent (remember, you are at least second since their agent retired) to shop their policies. You will have to make sure this is minimized, which shouldn't be hard if you are proactive.
- Can you do things on a shoestring and still make it work? Paying employees a little to much and it takes away from the little you earn. Pay them to little and someone will hire them away from you.
- Do you have a solid advertising philosophy? From what I understand (and what I receive), State Farm agents send out a LOT of mail looking for new clients.
So you'll go into debt, but hopefully, you will have enough business to pay for the debt service. To make the point simply, figure you spend $25K on furniture and signage. I think State Farm finances that for you. They take a payment out every month. Eventually, you own it, but you are initially $25K in debt before you even open your doors. Same thing with the office lease and other parts of getting the door open.
Dan
I am a new State Farm Agent and Dan is pretty much right on. I will add that it is the longest job interview ever. From the time I started talking to them until I signed my contract (you are on double secret probation during the first year of your Agency) it took me three years.
The first big step is to make it into the pool which involves a panel interview. Once you make it through the panel interview, you can apply for Agencies throughout the US. Once you are selected for an Agency location, you begin the paid training as an Intern. After six months of training, you become a TICA and open an Agency or take over one. After one year, they decide if you will receive your contract. My class of Interns had 14 people in it, of which 5 did not receive their contract. Like I said, longest interview process ever. Let me know if you have any other questions about State Farm.
State Farm or Independent
Why didn't I think of that! That also puts my mind at rest. I thought we were being invaded by Alabama insurance agents!
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