State Farm Offer

[Turbodiesel]

My questions were a little different from the recent post by another individual. I've been a successful financial advisor for the past five years. My wife and I are desperately wanting to move to the country and raise a family and there is no way that I would be able to do that as a financial advisor without having to start over or luck into a retiring Edward Jones broker's office.
Hence, I've been looking at insurance agencies. I've been approached by State Farm and have talked to an existing agent. I'm supposed to have an interview with a recruiter next week. I was wondering if folks could give me some advice as to rather or not this would be a wise decision and also some questions that hopefully weren't answered on the previous topic post.
1) I would only go here to take over a retiring agents office and it's my understanding I'd be at the front of the line since I have the ability to cross sell LTC, LIFE, Mutual Funds successfully AND because I want to live in the country and I guess nobody else wants to anymore. I assume this is correct as they wouldn't waste there time interviewing me knowing this is the only way I'd come on board.
2) I was told for the first year I'm paid a salary and it is whatever I was making in my last year of my previous employment. This would be a major draw as I did 100k this year. I've never heard of a company willing to do this, is it a salary or actually some kind of forgiveable loan or draw?
3) What to look for if I did get the offers to take over an office in small towns? I get the impression I need to be the only shop in town. Do any of the old timers really cross sell? I was wondering if there is a way of finding out how many existing homeowners and car policies there is per capita for the counties ahead of time and how many existing ltc, and life policies there are in place?
4) I expect to make 85-115,000 at my peak in a small town. Is that normal or higher than I should expect? .
5)This should have been the first question. It is my understanding that you don't have to buy a retiring agent's book but when you retire you don't get to sell it or give it to your kid either, where other companies you buy the book and then get to sell it. Correct? Are there other companies I should be considering for the market I'm wanting?

Thanks for everyone's help.

 

[TXINSURANCE]

Re: State Farm Offer.

I was told for the first year I'm paid a salary and it is whatever I was making in my last year of my previous employment. This would be a major draw as I did 100k this year. I've never heard of a company willing to do this,

Really? What a great deal.

So if you made $1mill last year they would simply match it for giggles... This doesn't pass the smell test....

Get it in writing, this stinks or you misunderstood.

Sorry not trying to be negative but you see where I am coming from I hope...

 

[Agent5913]

Re: State Farm Offer.

Um, Im kinda new but I have to make a little statement If I can.

If.......

"4) I expect to make 85-115,000 at my peak in a small town. Is that normal or higher than I should expect?" .

Then, I think I might tell the wife shes gonna have to wait a few years to get out in the country.

Seriously, I love what I do but Its gonna take me a few years to get to $100k I think.

Good Luck.

 

[David C]

Re: State Farm Offer.

Turbo,

Point number three you suggested being the only shop in town. In Georgia, in my county of 45,000 +/-, my town of appx. 24,000, there are four State Farm offices. But they all seem to do fairly well.

Old timers cross selling??? The last SF agent who retired here did a fantastic job of cross selling life. A large percentage of his P&C clients had life with him.

In point five you asked about owning the book. When the last guy here retired I was told his book was split amongst the other SF agents here. Don't know if that's true.

 

[djs]

Re: State Farm Offer.

Hmm, ask some very specific questions. As I understand it, you have a few things slightly incorrect, but related to the truth. I am not a State Farm agent, so I can only base this on what I was told when I interviewed, and in a few conversations with State Farm agents.

Salary during the first year is based on your previous employment, but does not necessarily match it. I assume this has some geography basis as well, so ask a lot of questions about this. Good news is, I doubt they will hide how this works, they do a good job of trying to make sure people make informed decisions.

It is doubtful that you would directly inherit an existing agents book of business. It might happen if he is the only agent in a broad area, and the size of the book doesn't warrant having another agent in the area. In essence, you do take over the current agents book of business, but it may not be policy for policy.

Do some real number crunching on what you want to make. You need to include office rent, salaries for the help, e&o insurance, etc. You'll probably have to make closer to $200K (or slightly above) to get that number. Make sure the town will support it, though almost anyplace will.

Territories are not exclusive. Even if you are the only State Farm agent in town, another agent will own several policies in your area, and you'll own some in his/hers. That's okay.

You're right, you are given a book of business, but it belongs to State Farm, not you. I believe you have some sort of vesting in the business, but I have no idea how that works. State FArm agents tend to be around for forever, so I'd assume they take care of the agents when they retire somehow. Either that, or they can't afford to retire, and that's why they are there for forever

Most P&C agents cross sell, or they don't survive. Some oldtimers haven't gotten into the financial solutions stuff, but they still cross sell home / auto / life. Count on it.

You are likely not going to be happy with having State Farm as your broker dealer. I'm guessing here, but if you are used to being a financial planner, you'll find the opportunities here somewhat limited. Ask during the interview what they have to offer the clients. Make sure you are okay with it.

Overall, State Farm agents tend to do well.

Dan

 

[jmmauthe]

Re: State Farm Offer.

Dan you hit the nails on the head!!!

Former SF Team Member myself and alot of what Dan is saying is very true. An agent I knew had his son working for him for a few years and when the son wanted to apply for an agency he didn't even make the cut, not much his dad could do about it either--so no 'inheritance' or 'willing out the business'. In addtion to 'taking over an agent's book', when agents have moved in on other books, SF Corp. will disperse the book within the area so the agent doesn't just soak in the goods from work done prior to his arrival. Definitely have to earn your keep...however, what Dan said about being in a remote location you may have a better chance of not loosing too much of the already exsisting book.

 

[SME]

Re: State Farm Offer.

My father in law recieved a full SF book because he was willing to move into a town no one else wanted. (Gallup, NM is not known for it's great scenery). But most agents start out as either scratch, or with a partial book.

 

[djs]

Re: State Farm Offer.

Define full book vs partial book? When I interviewed with them, they were talking about a reasonable size book of business, but it wasn't necessarily a direct transfer from any particular agent. It was a variety of 'house' policies that they pushed back out to the agent force.

Basically, I was told it would cover my overhead (pretty significant if you think of a State Farm office) but not necessarily make me much money. I'd have to grow it to make my money. Pretty good offer in reality.

Dan

 

[SME]

Re: State Farm Offer.

There are 3 types
1. A full book with enough policies to cover overhead and an income. (these are very rare)
2. A partial book with just enough to cover overhead, but not your income.
3. A scratch agency with a very small book that does not cover expenses.

It also possible to be somewhere between and partial and scratch agent. With any of these be prepared to cover some expenses.

 

[HomeService]

Re: State Farm Offer.

I recall being told at one time that you must have a 4 yr college degree to become a state farm agent. True or false? Also Allstate -I think.