- 274
Good place to learn the business working for an agent but then take your knowledge and run.
Becoming a State Farm Agent
- Thread starter shawn17ths
- Start date
- 344
You should not consider State Farm unless you have at least $100,000 in cash/credit and you are willing to have it reduce down to $0 and go at least $50,000 in the hole. if your stomach can take it, and you ride it out for 2-3 years, you may break even and then start to make money. As long as you are committed to selling life and health, you can make it work. If you want to only sell P&C then go somewhere else. You will lose everything.
However, if you love financial services and sell life and health, you can do very well. It will take a minimum of 3 years and be prepared to not make much money during this time. $100k and the willingness to lose and go into the red is the key. Stay away if you have any less. The $18k sign on bonus is not nearly enough.
And one more thing... Stay away from New Market unless you have at least $200k. Take over a book. It's the only way to go in this day and age.
However, if you love financial services and sell life and health, you can do very well. It will take a minimum of 3 years and be prepared to not make much money during this time. $100k and the willingness to lose and go into the red is the key. Stay away if you have any less. The $18k sign on bonus is not nearly enough.
And one more thing... Stay away from New Market unless you have at least $200k. Take over a book. It's the only way to go in this day and age.
This applies primarily to those who are considering an insurance career that includes financial services.
I was lied to constantly by insurance and financial services companies about how quickly I would be making money. Finally, a seasoned agent who'd seen enough of the crap and new that I was a realist told me the truth: It usually takes at least three and more often five years to get to a good place in the industry. There are a lot of variables that affect success:
Do you have a natural market? If you still live in the area in which you grew up, have a wide swath of friends, families, and acquaintances who respect and like you, and are actively involved in your church and other social groups, your chances of success are exponentially better.
Does your background make you more qualified? If you're doing anything in the financial services realm, your background and experience are crucial barometers for prospects. I see "kids" right out of college or whose only professional experience is working at Office Max ask prospects to place their retirements funds in their hands. I could only shake my head, admiring their courage, but amazed at their naivete.
Are you able to swallow everything your company feeds you? If you can put aside your values and execute every sales strategy your company gives you, your chances of success are huge. Personally, I've always been on the side of the consumer. I try not to "sell" anything, but focus on uncovering and defining needs and wants, so that their buying my products and services is a decision made based on their values rather than my manipulation.
Are you able to clearly discern reality from hype? Your company is good at sales. That means they know how to spin pitch so that it sounds/looks good to you. The company I was with constantly rolled out new sales strategies on almost a daily basis, and often fed us strategies for products we weren't yet selling. I walked away thinking, "Great, thanks for showing me something else I can't sell." You'll have sensory overload if you can't focus and ignore the chaff.
How well do you read people? I'm not just talking about prospects, I mean people you work with. If you're part of a larger firm or have been brought on by a "mentor," how well do you really know them, and how many of their qualities are you assigning them because you want them to be the key to your success? I can't count the number of schmucks I have met in the industry, some of whom I did some joint work with, only to have them eventually to steal my clients. One manager brought in a CFA as part of our "team," and suggested we work with him on all cases. Little did I know until later that they had a dba going on the side, which was set up to collect all the business that was orphaned when newbies left. And to think I thought he was looking out for my best interests!
Know that few people in this industry are altruistic. They want their share, and then some. Be very wary of those who want to "help." They want to help, all right--help themselves.
As mentioned before, having the financial resources to survive the first several years in the business is crucial. Few businesses are created without a financial investment. If you look at your insurance/financial services career as being similar to starting up a bakery, you'll understand how substantial the investment can be.
I wouldn't touch State Farm with a 10-foot pole, nor would I a P & C company that tries to fold in financial services with their products. I'm an independent financial advisor, and I can beat any life or disability insurance product that State Farm offers. And it makes me sick to see new guys in the P&C business, not just with State Farm, offer to manage a client's IRA when they hardly know anything about investments.
Sorry for the diatribe, but the dialogue here has been disconcerting at best. Financial services companies are complaining about how few young people are going into the business, yet they stick with the old models of suckering people to become agents, knowing full well that they will waste a year of their lives trying to succeed in a business they have no business being in. It sickens me.
I was lied to constantly by insurance and financial services companies about how quickly I would be making money. Finally, a seasoned agent who'd seen enough of the crap and new that I was a realist told me the truth: It usually takes at least three and more often five years to get to a good place in the industry. There are a lot of variables that affect success:
Do you have a natural market? If you still live in the area in which you grew up, have a wide swath of friends, families, and acquaintances who respect and like you, and are actively involved in your church and other social groups, your chances of success are exponentially better.
Does your background make you more qualified? If you're doing anything in the financial services realm, your background and experience are crucial barometers for prospects. I see "kids" right out of college or whose only professional experience is working at Office Max ask prospects to place their retirements funds in their hands. I could only shake my head, admiring their courage, but amazed at their naivete.
Are you able to swallow everything your company feeds you? If you can put aside your values and execute every sales strategy your company gives you, your chances of success are huge. Personally, I've always been on the side of the consumer. I try not to "sell" anything, but focus on uncovering and defining needs and wants, so that their buying my products and services is a decision made based on their values rather than my manipulation.
Are you able to clearly discern reality from hype? Your company is good at sales. That means they know how to spin pitch so that it sounds/looks good to you. The company I was with constantly rolled out new sales strategies on almost a daily basis, and often fed us strategies for products we weren't yet selling. I walked away thinking, "Great, thanks for showing me something else I can't sell." You'll have sensory overload if you can't focus and ignore the chaff.
How well do you read people? I'm not just talking about prospects, I mean people you work with. If you're part of a larger firm or have been brought on by a "mentor," how well do you really know them, and how many of their qualities are you assigning them because you want them to be the key to your success? I can't count the number of schmucks I have met in the industry, some of whom I did some joint work with, only to have them eventually to steal my clients. One manager brought in a CFA as part of our "team," and suggested we work with him on all cases. Little did I know until later that they had a dba going on the side, which was set up to collect all the business that was orphaned when newbies left. And to think I thought he was looking out for my best interests!
Know that few people in this industry are altruistic. They want their share, and then some. Be very wary of those who want to "help." They want to help, all right--help themselves.
As mentioned before, having the financial resources to survive the first several years in the business is crucial. Few businesses are created without a financial investment. If you look at your insurance/financial services career as being similar to starting up a bakery, you'll understand how substantial the investment can be.
I wouldn't touch State Farm with a 10-foot pole, nor would I a P & C company that tries to fold in financial services with their products. I'm an independent financial advisor, and I can beat any life or disability insurance product that State Farm offers. And it makes me sick to see new guys in the P&C business, not just with State Farm, offer to manage a client's IRA when they hardly know anything about investments.
Sorry for the diatribe, but the dialogue here has been disconcerting at best. Financial services companies are complaining about how few young people are going into the business, yet they stick with the old models of suckering people to become agents, knowing full well that they will waste a year of their lives trying to succeed in a business they have no business being in. It sickens me.
- 344
The main 2 things are the cost of staff and the cost of marketing. Since SF subsidizes your business when you start, they expect numbers. If you are new market, you have no existing business to service, so the production expectation is higher. Remember, with SF you are not selling by yourself in a small 500 square foot office. Most offices are in retail or semi-professional space where the rents are a bit higher.
Plus since you will barely make any money the first year or two, you will need the rest to take care of your personal financial obligations.
Hello All,
I am currently in the first stages of possibly becoming a State Farm agent, after doing some research in the past week or so you can imagine the horror I feel reading though this entire thread and many of the threads at nasfa.com.
For the most part, it seems like the single biggest problem isn't selling insurance or getting new policies, its the debt that is associated with running a State Farm agency the way that they "suggest." My question is, what happens if you simply don't run your office that way? They can't force you to hire employees, so what happens if you just don't hire any. Also, with the internet these days, there are many ways to do some creative marketing that doesn't cost an arm and a leg. If I decide to move forward, my plan would be simply to start as a scratch agent on my own and rent the most affordable office possible. I read somewhere that they recommend you buy their office furniture set for around 15k, which is insane. I'm pretty sure I can fix up a suitable desk and some chairs for 500 or so. If I can keep monthly expenses down to about 2k a month, then the 18k bonus should tide me over for a good amount of time while I build up a dececnt book. Also, getting much higher commissions for being a new agent should help as well.
Is this a reasonable business plan? If presented to the recruiters and district managers, would they just laugh in my face and kick me to the curb? If so, what would happen if I just went along with their game until I had an office and then just did my own thing instead of drowning in debt? This seems much more preferable to me because even if they did let me go after the year, I would't have much debt and would probably have enough skills and experience to go independent. I'm very curious as to what you all think.
I am currently in the first stages of possibly becoming a State Farm agent, after doing some research in the past week or so you can imagine the horror I feel reading though this entire thread and many of the threads at nasfa.com.
For the most part, it seems like the single biggest problem isn't selling insurance or getting new policies, its the debt that is associated with running a State Farm agency the way that they "suggest." My question is, what happens if you simply don't run your office that way? They can't force you to hire employees, so what happens if you just don't hire any. Also, with the internet these days, there are many ways to do some creative marketing that doesn't cost an arm and a leg. If I decide to move forward, my plan would be simply to start as a scratch agent on my own and rent the most affordable office possible. I read somewhere that they recommend you buy their office furniture set for around 15k, which is insane. I'm pretty sure I can fix up a suitable desk and some chairs for 500 or so. If I can keep monthly expenses down to about 2k a month, then the 18k bonus should tide me over for a good amount of time while I build up a dececnt book. Also, getting much higher commissions for being a new agent should help as well.
Is this a reasonable business plan? If presented to the recruiters and district managers, would they just laugh in my face and kick me to the curb? If so, what would happen if I just went along with their game until I had an office and then just did my own thing instead of drowning in debt? This seems much more preferable to me because even if they did let me go after the year, I would't have much debt and would probably have enough skills and experience to go independent. I'm very curious as to what you all think.
- 344
The management doesn't care less about if you buy furniture from them. in fact, you should buy used furniture or some nice IKEA furniture to start. Furniture doesn't make you money. Keep your startup expenses low. Get an office that's already built out. In my opinion, your start up costs, excluding security deposit, should not exceed $5000. Any more than that is foolish. To be honest, keeping expenses less than $2000 per month is unreasonable... State Farm or not... Unless you are the only producer. You will need at least 1 other sales staff, so that itself will be at least $2000 per month. Plus utilities, insurance, supplies, etc... Add these up and realistically you are at $5000 per month, excluding any marketing or owners draws.
But this is not unique to State Farm. Any full-size multiline agency will be similar. But as long as you are writing enough P&C, your premium builder will be at least $11,000 plus your commissions. Well, that's with SF anyway. You can make more independent up front, but you do not have the financial support nor structure. It's a tough deal, but don't feel bullied to buy overpriced furniture or to spend $3000 per month on Internet leads. Do not think for a second that the $18000 is going to get you anywhere, because it isn't. And they know that. It's a little help, that's all. You will need that in your business operating account. Plan on being in the red a minimum of $50,000 year 1 of your money (not the $18,000 sign on bonus) and having enough savings to pay your personal expenses for at least 18 months. If you do not have access to this cash, you should not do it.
If the above does not sound like you can do it but you want to sell insurance, consider a company like Met Life, New York Life, or Prudential to start with, then find your way. You will not have the expenses to start and many of these companies will pay you so e sort of training salary.
Or maybe go to work for a State Farm, Allstate or independent agent for a while. See if it's something you would really like to do. Just don't piss your money away on a feeling.
- 8,707
I have no affiliation with State Farm but you ask what happens if you don't run things their way? You are a TICA Temporary is all you need to read into that you do not have a contract that can not be ended. Go back and read the threads of people making trips and not getting a contract.
- 15,041
What Peter said. It sounds great and all to do it your way, but you still are dependent upon State Farm's management. If they decide not to give you a permanent contract, it doesn't matter what you did.
Personally, that alone would be enough to deter me from State Farm. Unless there is a clear path to a permanent contract that depends only upon your production, I wouldn't endure that level of debt to be at the whim of management.
Also, the only promises that matter are those that are enforceable. And that means in writing. They can promise you the moon, the sun and the stars, it doesn't mean squat until they write it down.
Personally, that alone would be enough to deter me from State Farm. Unless there is a clear path to a permanent contract that depends only upon your production, I wouldn't endure that level of debt to be at the whim of management.
Also, the only promises that matter are those that are enforceable. And that means in writing. They can promise you the moon, the sun and the stars, it doesn't mean squat until they write it down.
