Becoming a State Farm Agent

[wfs]

Here's a fun little analogy for you...

State Farm = Term Insurance. You are renting, and less than 1% of all policies (SF agencies) ever pay a benefit.

Independent = Permanent Insurance. You are building equity, is guaranteed to pay out, and you can cash out anytime and get its current value.

 

[sf agent]

My opinion is anyone who would read this thread from start to finish would come to the objective conclusion to steer clear of the SF opportunity. My opinion is the only ones who would suggest otherwise are unaware of how much the SF contract has changed. Either that or they SF management or someone who has already drank the SF koolaid and are only seeking confirmation not facts.

I agree. 10 years ago good opportunity today not so much.

 

[FirstTimer]

Re: Becoming a State Farm Agent - So how do you go indy?

Hello everyone; it's been a while since I've been on here. I ultimately passed on the SF opportunity and am interested in going indy. Here's the rub; how does someone with no experience get appointments? In my limited exploration, without experience it's extremely difficult to keep appointments even when buying an existing book/agency. Is going indy feasible without experience? Any guidance/recommendations are greatly appreciated.

 

[ewilkins]

Re: Becoming a State Farm Agent - So how do you go indy?

Hello everyone; it's been a while since I've been on here. I ultimately passed on the SF opportunity and am interested in going indy. Here's the rub; how does someone with no experience get appointments? In my limited exploration, without experience it's extremely difficult to keep appointments even when buying an existing book/agency. Is going indy feasible without experience? Any guidance/recommendations are greatly appreciated.

Depends. Are you talking appointments for p&c, Indy or both? Appointments for life are easy to get even with no experience.

 

[AgentThomas]

This has been an interesting read. I respect the opinions of those who have posted here and value the perspectives that have been shared. It does appear however that this thread is based on the negative experiences of what numerically would be the vast minority.

State Farm has somewhere around 18-20 thousand agents, many are new and are on the new contract. Most are doing well, some very well.

Some background on me for the sake of credibility...

I have been in the insurance industry for 30 years. I was an agency owner (Independent) until 2012 specializing in commercial P&C. I employed two (licensed) CSR's and had two producers. The vast majority of the book were commercial accounts, but we also did a fair amount of personal lines as well.

State Farm is geared towards that model albeit with a focus on writing life and banking business as well.

Most of the complaints in this thread are from people who had a different paradigm. The LinkedIn article that was referenced is a great example of that. The author of that post was clearly not suited for that position. He flatly stated that he hated writing P&C business and that he did not want to be anyone's boss. I don't know how he made it past the KSAO assessment with that mindset.

There are many factors and variables that make each situation different. Markets are a huge factor and are widely variable based on location. One persons experience from a specific geographical location does not necessarily equate to another's from a different market.

I started out as an agent for Mutual Of Omaha years ago. I became a district manager and my job was hiring and training future insurance agents. The attrition rate was about 75% and many left the business blaming the company for their lack of success. The training and support that was provided was excellent and the compensation was extremely lucrative. The most common problem was that people assumed it was all just going to drop in their laps and when it didn't, well... sour grapes all around. I believe there is a special flavor of Kool Aid called sour grapes

The point to all of this is that a person should do their due diligence by investigating all factual information available to them. Seek the opinions of both those who have had positive and negative experiences. Be honest with yourself regarding what your expectations are and what kind of effort you are truly willing to put forth to achieve your goals. Know what your goals are and what you want.

Don't let the opinions voiced on an internet forum thread be your deciding factor in making any decision.

 

[FSF]

So here is my story. I've been a successful sales managers for nearly 20 years. Im considering a career change to cut down on travel, etc.. Out of the blue I'm contacted by a SF recruiter who seems desperate to hire an experienced entrepreneur sales manager type because as she puts it, the older SF agents from the 70s are getting old and retiring all at once. Sounds legit, so I go ahead and pass all of the assessments and meet with her in person.

All she wants to tell me about is how wealthy most of the agents are, their book of business is over $3 million and with the commission structure they are pulling in $300k per year. Keeps telling me about how one reps scorecard bonus alone was over $80 grand etc. Most of these older reps never even come into the office anymore, so they want to replace them with younger folks who will grow the book.

All sounds great.... Too great in fact, so I did some research and read 100 pages of posts on this forum. I compiled a list of questions to ask that recruiter and when I hit her with direct questions she almost sounded apologetic.

What I learned:
The $3 million book of business I was being recruited to take over would actually be cut down to $1.6 million. That is the goal at SF to give new agents taking over for old ones just enough to break even before paying themselves so they are hungry, literally and figuratively I suppose.

That book of business with the 10% commission in the first two years is just enough to pay for employees, marketing, the office, and taxes.... Hopefully. If you intend to live any lifestyle outside of a cardboard box, you WILL go into debt.

Better have $100k set aside up front just to keep you afloat for the first 2 years. After that in year 3-5 you may grow your business enough to earn a measly salary equivalent to the people you employ, hopefully. The average on the variable compensation goes down from 2% guaranteed to somewhere closer to 1% typically.

Finally after 5 long years of going into massive debt and stressing yourself out you get the AIPP bonus of 5% which means I would then go back to making what I make now, roughly. After 5 long years and having drained my life savings plus accumulated debt I now can make my old salary, maybe more, possibly less.

Who in the hell would ever sign up for this? Why would anyone with the skill set and financial means SF is looking for ever do this to themselves? When it was first presented as taking over the book from a retiring rep with $3 million in sales it sounded like a good deal. I could work the business and support my family. When they told me they'd divide up the book I crunched the numbers and realized I'd be better off financially going on welfare for a couple of years then getting back in the work force. I'd hate to take over a SF agency then have to panhandle on weekends to feed my kids.

I consider these recruiters to be the scum of the earth. Had it not been for this forum i would not have asked the questions I did and put my families entire financial future at grave risk. What a different song they sing when you know the answers going in.

 

[agentusa]

So here is my story. I've been a successful sales managers for nearly 20 years. Im considering a career change to cut down on travel, etc.. Out of the blue I'm contacted by a SF recruiter who seems desperate to hire an experienced entrepreneur sales manager type because as she puts it, the older SF agents from the 70s are getting old and retiring all at once. Sounds legit, so I go ahead and pass all of the assessments and meet with her in person.

All she wants to tell me about is how wealthy most of the agents are, their book of business is over $3 million and with the commission structure they are pulling in $300k per year. Keeps telling me about how one reps scorecard bonus alone was over $80 grand etc. Most of these older reps never even come into the office anymore, so they want to replace them with younger folks who will grow the book.

All sounds great.... Too great in fact, so I did some research and read 100 pages of posts on this forum. I compiled a list of questions to ask that recruiter and when I hit her with direct questions she almost sounded apologetic.

What I learned:
The $3 million book of business I was being recruited to take over would actually be cut down to $1.6 million. That is the goal at SF to give new agents taking over for old ones just enough to break even before paying themselves so they are hungry, literally and figuratively I suppose.

That book of business with the 10% commission in the first two years is just enough to pay for employees, marketing, the office, and taxes.... Hopefully. If you intend to live any lifestyle outside of a cardboard box, you WILL go into debt.

Better have $100k set aside up front just to keep you afloat for the first 2 years. After that in year 3-5 you may grow your business enough to earn a measly salary equivalent to the people you employ, hopefully. The average on the variable compensation goes down from 2% guaranteed to somewhere closer to 1% typically.

Finally after 5 long years of going into massive debt and stressing yourself out you get the AIPP bonus of 5% which means I would then go back to making what I make now, roughly. After 5 long years and having drained my life savings plus accumulated debt I now can make my old salary, maybe more, possibly less.

Who in the hell would ever sign up for this? Why would anyone with the skill set and financial means SF is looking for ever do this to themselves? When it was first presented as taking over the book from a retiring rep with $3 million in sales it sounded like a good deal. I could work the business and support my family. When they told me they'd divide up the book I crunched the numbers and realized I'd be better off financially going on welfare for a couple of years then getting back in the work force. I'd hate to take over a SF agency then have to panhandle on weekends to feed my kids.

I consider these recruiters to be the scum of the earth. Had it not been for this forum i would not have asked the questions I did and put my families entire financial future at grave risk. What a different song they sing when you know the answers going in.

I don't even know what I'm spending my time doing this but I randomly came across this and I really felt like I needed to chime in.

Being a State Farm agent is definitely not for everyone, and not everyone goes on to become super successful. Some agents decide to not grow their business and hire one team member in the office so that they can maximize their bottom line (short term thinking). Others however, continue to grow their business and stay balanced between all lines and products and end up making great money while continuing to grow year over year.

My question for you regarding the $3 million dollar book is, what makes you think you deserve a $300k base salary right off the bat without even working for it? You said the retiring agent built it up to $3 million, so why is it that you think you can just step in and take over a book that another agent has worked long and hard to develop? The fact that State Farm is even giving you the $1.5 million book is such a blessing. Go and look at Allstate and Farmers, companies that either make you buy the book of business or loan you money to run your business and then come knocking on your door for it when you don't do well in the first few years.

Just so you understand what you're getting with State Farm... by the time you finish training you will have received $25k+ in bonuses, plus another $25k+ for starting your office. So that's a $50k bonus right off the bat on top of a $150k base compensation package. What other company will give you that?

I guess this is why State Farm agents always say this is the best kept secret. While many people write it off and say negative things about the opportunity on forums like this, many State Farm agents are quietly reaping the benefits. I'm not trying to convince you to become a State Farm agent, I'm not a recruiter. But keep in mind that recruiters have a job to sell the position no matter what it is, so it's not nice to call them "scum".

I've been around other State Farm agents for the past 4 years and even with the new contract there are many successful agents out there making $60-200k on their scorecard bonus alone, more than most people make in an entire year.

 

[agentinn.c.]

Hi all, first and Im betting my last post with my .02. I was speaking with my recruiter from 11 years ago today. I just helped one of my team members get selected for agency. We discussed why it was hard to find qualified candidates and he said of course theres negative things on the net as well as some people just not having the guts to go through becoming a business owner. I was curious so I had to look and found this post so I signed up to share my thoughts. I see a lot of the same messages so Ill try to address them as best Im able.
Is this the same company it was. Absolutely not. Please name me one that is. With technology so rapidly evolving there will be changes, good AND bad. Its life folks, we must prepare for change in any industry. Despite the change, I still feel this is a good opportunity but no, its not as good as it once was.
Is INDY better? Wow, no idea here. Lots of times I wished I would have explored it. Frankly Id say these are two separate business models. If you are an incredible go getter and know how to be a top producer, go INDY. My guess is SF is an easier way to go and of course there is an old saying that I love. With risk comes reward. My guess is INDY is harder but provides a better financial opportunity IF you can do it.
I won't make any money right away. Um, no kidding. If this is your thought you should go find another business to open where you can walk in debt free and make a six figure income.
Lots of people have failed losing lots of money. True. However I bet the percentage of failure is substantially less for SF than starting a business in general. They have a time tested system. In my class about 40% did not make it 5 years. Two were canned before their TICA year ended. One was the right call, one I truly believed would have been a great long time agent. I think that was a mistake but it wasn't my call. Another was fired and he even told me he had it coming. I know he regrets it. Another quit because everything SF did was trying to screw him over and it was all a bunch of bs in his mind. Ive stayed friends with him as well and watched him change positions several times since he left us. Ive never asked him and I won't due to his ego but Id bet money if he were honest with me he'd say he made a very big mistake.
All they want me to do is spend money marketing. I find this to be true but with a reason. You need to spend money and see what works for you in your market. Some folks they hire are just too dumb to figure out what works and they throw money away. Its sad for sure but some folks aren't destine to be business owners and some of these slip through the cracks to be chosen. Do it wisely! I wasted a lot of money but I also found things that worked and made me a lot more money than I wasted.
Folks, its an OPPORTUNITY. Maybe not as great as it once was, maybe not the best on the planet, maybe its not for you and candidly, maybe you aren't made to be an agent. But its an opportunity and I think its still a good one.
Life was tough when I started ten years ago but I did it and I was wise about it. Now Im loving life and my agency. I work 30 or so hours a week. Last year my income was over 300k and I expect it will be 350 this year. I have new seasoned people coming in my agency this Fall and will probably go semi retired so I can spend more time flying my plane, or spending time at my beach house using one of my couple boats. I don't say that to be bragging, a lot of you have a lot more than me but I want you to know this is an opportunity and it can be what you make of it. My state V.P. gave out coins many years ago. One side had "victim" on it, the other had "opportunity". Attitude is which side of the coin you looked at. I chose opportunity.

 

[Gooner]

Hi all, first and Im betting my last post with my .02. I was speaking with my recruiter from 11 years ago today. I just helped one of my team members get selected for agency. We discussed why it was hard to find qualified candidates and he said of course theres negative things on the net as well as some people just not having the guts to go through becoming a business owner. I was curious so I had to look and found this post so I signed up to share my thoughts. I see a lot of the same messages so Ill try to address them as best Im able.
Is this the same company it was. Absolutely not. Please name me one that is. With technology so rapidly evolving there will be changes, good AND bad. Its life folks, we must prepare for change in any industry. Despite the change, I still feel this is a good opportunity but no, its not as good as it once was.
Is INDY better? Wow, no idea here. Lots of times I wished I would have explored it. Frankly Id say these are two separate business models. If you are an incredible go getter and know how to be a top producer, go INDY. My guess is SF is an easier way to go and of course there is an old saying that I love. With risk comes reward. My guess is INDY is harder but provides a better financial opportunity IF you can do it.
I won't make any money right away. Um, no kidding. If this is your thought you should go find another business to open where you can walk in debt free and make a six figure income.
Lots of people have failed losing lots of money. True. However I bet the percentage of failure is substantially less for SF than starting a business in general. They have a time tested system. In my class about 40% did not make it 5 years. Two were canned before their TICA year ended. One was the right call, one I truly believed would have been a great long time agent. I think that was a mistake but it wasn't my call. Another was fired and he even told me he had it coming. I know he regrets it. Another quit because everything SF did was trying to screw him over and it was all a bunch of bs in his mind. Ive stayed friends with him as well and watched him change positions several times since he left us. Ive never asked him and I won't due to his ego but Id bet money if he were honest with me he'd say he made a very big mistake.
All they want me to do is spend money marketing. I find this to be true but with a reason. You need to spend money and see what works for you in your market. Some folks they hire are just too dumb to figure out what works and they throw money away. Its sad for sure but some folks aren't destine to be business owners and some of these slip through the cracks to be chosen. Do it wisely! I wasted a lot of money but I also found things that worked and made me a lot more money than I wasted.
Folks, its an OPPORTUNITY. Maybe not as great as it once was, maybe not the best on the planet, maybe its not for you and candidly, maybe you aren't made to be an agent. But its an opportunity and I think its still a good one.
Life was tough when I started ten years ago but I did it and I was wise about it. Now Im loving life and my agency. I work 30 or so hours a week. Last year my income was over 300k and I expect it will be 350 this year. I have new seasoned people coming in my agency this Fall and will probably go semi retired so I can spend more time flying my plane, or spending time at my beach house using one of my couple boats. I don't say that to be bragging, a lot of you have a lot more than me but I want you to know this is an opportunity and it can be what you make of it. My state V.P. gave out coins many years ago. One side had "victim" on it, the other had "opportunity". Attitude is which side of the coin you looked at. I chose opportunity.

So what you're saying is... you are a lazy SOB and got lucky. That and some VP gave you a gimmicky token...congrats bro

 

[Tahoe Ray]

So what you're saying is... you are a lazy SOB and got lucky. That and some VP gave you a gimmicky token...congrats bro

If I wasn't on my cell I'd give you a thumbs up just for reading that ridiculous wall of text.