Statefarm

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Mar 7, 2006 5:22 pm

Statefarm is recruiting FAs to replace retiring agents. They just called me.They'll give a book of about 1.5- 2 mill in P&C business, which will net about 130k before expenses, and help with startup costs and signing bonus. Obviously they want FAs to be the next generation of agents since their agents have done no good at the financial service biz.  What do you guys think?

Mar 7, 2006 6:09 pm

How would your current clients feel about signing an ACATS to State Farm?  Stick to what you know and have succeeded at, look at independant or wire.

Mar 7, 2006 8:47 pm

I have used State Farm for 15 years with a renters insurance policy,
and when we started my agent said he would do the whole deal...you
know...the family check up.  That lasted until I bought my first
home and bought my first life insurance policy.  Now I pay him
about $8k per year in permiums and I have not talked to him in 3
years...



A broker would do well at State Farm....and I hate them.

Mar 8, 2006 8:24 am

State Farm is "best of class" as far as public view of P&C goes...My next door neighbor makes BANK specializing in P&C for trucking companies, it is unbelievable.

Mar 8, 2006 8:38 am

I don't know, probably not much worse than when they signed the acats for BAC. The way I figure it if they gave me a large book that would pay me a nice salary and cover office expenses while I continue to build the business, I might look seriously at it. At least I wouldn't have the liability of getting sued everyday as I do in this industry. That is unless I started selling their financial services.

Mar 8, 2006 9:17 am

I really think p&c is a goldmine...I mean, you sell something that BY LAW everyone has to own!!


If one had the right opportunity (like above) it might be worth checking out.

Mar 8, 2006 9:49 am

I heard the  old state farm guys made out great but the new ones are under a different pay scale?


I have a buddy from my AGE training class working as an FA for Allstate and he's ecstatic  about it. He just works the P&C guys books from an investment angle.


In the end I'd say trust your gut instinct...

Mar 8, 2006 8:36 pm

Go for it.


You know what kind of home the guy has (you, or somebody in your office writes the homeowners policy).  You know what kind of cars they drive (you, or somebody in your office writes the auto policies).


Then when you get them in front of you, you realize that State Farm has their own bank.  That means that you can refinance the mortgage, pull out some equity, and use the margin created to do a systematic investment.


Think about it.  Once you have taken some high income, low net worth yuppie, to financial nirvana by eliminating the credit card payments and making the auto payments tax deductible then they will have a side fund for emergencies.  Then you raise the deductibles on the homeowners policies and auto policies to increase their cash flow for you to invest.


Believe me...you can still make several thousand dollars off of each middle class client and not work too hard.  Hell...if you are doing a mortgage then they will reveal all of their assets to you in an attempt to qualify for a lower rate.  Additionally, you have bank products such as CDs.  Yeah...it ain't glamorous but you never have to let a piker walk out of the door because what you are selling "ain't got no FDIC".


Of course, you could stay at the bank...and continue hating life.

Mar 9, 2006 7:38 am

The problem is because State Farm only has proprietary State Farm mutual funds I would be literally turning my back on my 27 mill book. They have no other product choices to put my clients in. They are also very hokie. Reminds me of EJ but worse.

Mar 9, 2006 10:04 am

If you want to be a P&C guy, go for it.  But you have no chance in hell of being a successful financial advisor if you're going to be competing against the rest of us with State Farm mutual funds.<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

Mar 9, 2006 8:31 pm

Mike,


People that buy State Farm mutual funds don't care about the Fidelity Canada fund or XM Satellite Radio.  They simply want to be told what to do.


If a State Farm client makes $150,000/year leading a sales team for a home improvement company selling covered gutter systems, he is not the same as a $150,000/year guy that real estate finance guy at a large bank.


First, the real estate finance guy will want all the exotic investments.  Second, the real estate finance guy will probably be a do-it-yourself micromanagement guy that is a pain in the ass as a client.  Third, the real estate finance guy will probably spend more than he makes because he is trying to keep up with the Joneses all while losing his ass in the market and paying off college loans.


The home improvement sales guy probably landed the job out of high school.  Besides a bass boat, a dually pickup, and a six-pack each night he probably doesn't need anything else.


Now...who would have more disposable income?  Who would listen to what you say because he didn't hear the hot stock of the day while driving home?  Who lives in the city and doesn't own sh*t?  Who lives in the country and has P&C coverage on his home, bass boat, and dually pickup? 


They run credit checks before issuing auto insurance nowadays.  Thus, you know if the guy is overextended.  You know the value of the home, boat, and pickup so you should know about how much income he has.  Further, if you refi the mortgage you have all the assets revealed.


Pick your poison.


Hell...each has its pros & cons but there are certain dumbasses on here that think being nothing less than a stock jock is immoral.  Hell...I know P&C only guys that make a sh*tload more than most "stockbrokers" and do it without working anywhere near as hard.  Hell...once you have a staff in place the P&C part runs itself.  If EZ would have a seasoned P&C staff then he should be good to go.  Especially if there is a good commercial P&C guy with the office. 

Mar 11, 2006 1:43 pm

State farm is inferior as a financial advisory firm and bank. Excellent at PC insurance. That is it. What an excellent opportunity to be an FA for them and be able to work all those clients....that is if you don't have a conscious selling their crappy investments.

Mar 12, 2006 12:38 pm

jonesir: You're at jones and you wonder about a "conscience?" (Note correct spelling, jonesir.)

Mar 12, 2006 4:18 pm
JonesIR:

State farm is inferior as a financial advisory firm and bank. Excellent at PC insurance. That is it. What an excellent opportunity to be an FA for them and be able to work all those clients....that is if you don't have a conscious selling their crappy investments.


Yeah, EDJ has all of those fabulous 5.50% 30-year bonds paying 3 points complete with an estate feature to prey upon little old ladies in addition to their 7, errrrrr I mean 8, preferred mutual fund families. 

Mar 12, 2006 10:41 pm

Revealer and Soothsayer- What the JonesIR said was true about State Farm although he did misspell conscience. Do you really think Jones IR's sell only preferred fund families?

Mar 12, 2006 11:30 pm
noggin:

Revealer and Soothsayer- What the JonesIR said was true about State Farm although he did misspell conscience. Do you really think Jones IR's sell only preferred fund families?


According to your own latest statistics, well more than 90% goes to preferred families.  2/3 goes to American Funds.  Scary.  Really scary.

Mar 12, 2006 11:42 pm

Why is that scary to me? I probably have a more diversified mf business than you do for instance. My largest fund company is only 30% of my total fund business, is that scary? Your point about other brokers is well taken but my concern is for my clients and my family. If a broker wants to disregard what they know to be true and overconcentrate their assets in one area or one firm we all know that that is a dangerous decision but certainly not one that has any effect on my business.

Mar 13, 2006 10:02 am

Noggin: I wake up every morning being happy for you.

Mar 13, 2006 6:35 pm

Noggin, don't take it personal.  I'm not concerned about your business per se.  I would be concerned as a firm if 2/3 of total fund flows were going to a single mutual fund family.  If you have less than 30% with any one family, then you are way, way ahead of the average Joneser. 


Mar 13, 2006 9:31 pm

So is everyone else.