State Farm Commission Structure

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State Farm Commission Structure

Postby JAM » Wed Oct 20, 2010 5:09 pm

Can anyone tell me what the SF commission structre is?
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Re: State Farm Commission Structure

Postby Vic » Thu Oct 21, 2010 8:47 am

I can only give you roughly what the new agent contract is for personal lines. It starts at 7%, then with some factors most of which is financial services sales they can get up to around 10%. They pay all the bills and get almost half of what independent agents get. The biggest perk is when agents retire they give some premium to the new agents and give the rest to the senior agents in the area. Possibly someone else can be more accurate.
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Re: State Farm Commission Structure

Postby randrew54 » Fri Oct 22, 2010 11:35 am

State Farm's new agent contract is terrible and don't believe them when they tell you you'll make more money on the new contract with the bonus. Agents used to get paid 15% but over the years State Farm has cut commissions down to 7%. Let's do some simply math, if you take over a 2 million dollar agency the agency was generating $300,000 per year but on the new contract it's only generating $140,000. Agents can not survive on 7% and State Farm knows it, but they don't care. If you are still in the decision process, get out!
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Re: State Farm Commission Structure

Postby OmniSure » Fri Oct 22, 2010 6:32 pm

Are you kidding. The NEW State Farm contract IS the GREATEST! It allows you to open an INDEPENDENT AGENCY on the SIDE and use the STATE FARM SIGN and LOGO to get TONS of people into your State Farm agency, then just write them within your INDEPENDENT agency for TRUE OWNERSHIP and HIGHER COMMISSION. PLUS, once you open your INDEPENENT AGENCY "on the side"... State Farm Corprate CAN'T TOUCH YOU because they know you can ROLL all of the STATE FARM AUTO and LIFE business to your INDEPENENT AGENCY if they "squeeze" you too much. AND... when you're ready to retire, if ever, you can collect your retirement commission (100% gross commish for 12 mos) then, right at the end of the 12 month term, after you have collected ALL of your State Farm retirement commish... ROLL all of that MUTUAL AUTO BUSINESS and other lines right over to your independent agency. The poor State Farm agent or agents that receive your accounts via 4521 transfer when you retire will THINK they got your State Farm accounts... but you have ALL of the X-Dates and can call YOUR clients and write them within your INDEPENDENT agency. Any State Farm agent that doesn't have an INDEPENDENT AGENCY "ON THE SIDE" IS FINANCIALLY FOOLISH and is much more vunerable to State Farm Corporate's mandates and control. You get your State Farm "CAKE" and eat it too. All of the FLORIDA STATE FARM Agents are doing this and are having a GREAT TIME using the State Farm name to write the business in their Independent agecies for higher commish and true ownership. As a STATE FARM AGENT you can open your INDEPENDENT AGENCY RIGHT NEXT DOOR to your State Farm agency so it is very convenient to move the State Farm client/lead right over to your Independent Agency. IT'S GREAT! If you're considering a State Farm Agency in Florida, after your State Farm appointment, contact BRIGHTWAY Insurance (they are VERY EXPERIENCED at setting up State Farm Agents with Independents on the side) or CROSSLET (They can set you up with your Independent "on the side") or, just stop into any Florida State Farm agency.
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Re: State Farm Commission Structure

Postby FFA » Mon Oct 25, 2010 10:34 am

Is that just for FLA? St Farm wants out of ther anyways.
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Re: State Farm Commission Structure

Postby VineryInsureGal » Mon Oct 25, 2010 1:22 pm

I thought the SF contracts had non-compete clauses which 1) limit what additional types of businesses that you can own/operate while acting as a SF agent and 2) don't allow you to own the book, i.e. they (corporate) owns the book & you can not take it with you.
Smartest move I made was not being chosen to be an SF agent. :-) Would have been a square peg in a round hole.
Cheers,

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Re: State Farm Commission Structure

Postby Rochambeau » Tue Oct 26, 2010 5:02 pm

Well, at least now there is a name (albeit an alias) to go with the rants. See Omni there has been ranting against SF for some time in the article comments sections when the subject of SF and FL comes up. Not quite sure what his beef is, maybe he's a SF FL agent that feels shafted or something, dunno.

Before anyone get the idea that I am a SF lover, nothing could be further than the truth. I can't stand the bastards but as an independent, I do enjoy eating the lunch of the local SF agents as they are not competitive in this area at all.

SF agents can do OK under the new contract IF they sell all the products, (including life, health, financial products, etc..). Problem is, many of those products are very uncompetitive, in price and/or benefits/performance. If you are not a financial products sales master, good luck, you'll need it.
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Re: State Farm Commission Structure

Postby FFA » Wed Oct 27, 2010 10:35 am

My Dad did St Farm for 35 years. He is making more from retirement then he did as an active agent. In the mid west anyways, if your offered a turn key agency, the rule of thumb is to take it.
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Re: State Farm Commission Structure

Postby Rochambeau » Wed Oct 27, 2010 11:01 am

Problem is, the retirement plan that he enjoys is loooong gone with the new contracts.
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Re: State Farm Commission Structure

Postby FFA » Thu Oct 28, 2010 10:21 am

Thats too bad. Never though I would hear them screwing their agents. Ed Rust Retire & they hired Paul Hopkins?
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Re: State Farm Commission Structure

Postby OmniSure » Thu Oct 28, 2010 7:27 pm

OK Rochambeau... I blew my cover! Yikes. But these aren't rants, they are TRUTH. It is inconceivable to me that Corporate State Farm in Bloomington is allowing their "captive" agents to open independent agencies "on the side" so blatantly as... next door, the next floor, or an adjoining office. Look, I just called the State Farm listed phone number of a recently RETIRED or FIRED State Farm agent. The letter that went out from the "retired/fired" agent indicated he was "moving on to new ventures". This SF agent was about 10 years established and probably about late 30's for age. His SF agency probably had close to 10 mill in TOTAL PREMIUM (he had good connections for plenty of 4521's over the years)... Why would you RETIRE form $1mill/year or more gross income in your late 30's? Anyway, he did "RETIRE", but... as I digress, when I called his State Farm listed Phone Number... the number was picked up by the INDEPENDENT AGENCY which was operating by his borther in law, right down the hall. Guess what... all of his existing State Farm book, especaially the State Farm Mutual Auto... is being HEAVILY marketed by his Independent Agency and being written away form the other State Farm agents that got these accounts transfered (4521'd) to their books.
How can State Farm corporate be so nieve? It seems like all of the State Farm Agents in FL have INDEPENDENT AGENCIES "on the side". If it's OK in Florida, EVERY STATE FARM AGENT in EVERY STATE should have an Indepenent Agency on the side, to LEVEL the playing field against Bloomington. When Bloomington realizes that ALL of the AUTO, LIFE and HOMEOWNERS could be ROLLED right over to the "Captive" State Farm Agent's INDEPENDENT AGENCY... Corporate will most surely back off on the requirements for: Life/Financial Services, etc... as corporate will have LOST CAPTIVE CONTROL of thier STATE FARM AGENT. Of course, if this recently "RETIRED", young SF Agent was really FIRED, then Bloomington has finally figured it out and I'm sure...more terminations will follow. But don't expect those 4521's to go uncontested.
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Re: State Farm Commission Structure

Postby Rochambeau » Mon Nov 01, 2010 1:26 pm

For the uninitiated, 4521 is State-Farm-speak for Broker of Record letter, in other words the form a SF policyholder signs to change from one SF agent to another.

Omni, if you don't belong already, you should join NASFA.

Good luck to you.
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Re: State Farm Commission Structure

Postby JAM » Sun Nov 07, 2010 1:12 am

You guys hijacked my thread. at least answer me this,
How does their bonus program work. I heard something to the tune of 11k per month from SF to help you get started. Is this a loan and how long do they give you this money?
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Re: State Farm Commission Structure

Postby magazine » Mon Nov 22, 2010 6:48 am

There are different structures they can use for new agents. It varies with the number of policies they start you off with. If you are taking over an existing book, then you will not get the additional start up money and it scales according to premium. If you are considering any opportunity, make sure you get the offer in writing up front before you committ to the training process. I was a long time employee with a successful career, and I took the word of the managing agent. The actual deal when I went to start the agency was not what had been offered verbally. Make sure you protect yourself.
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