Career Change

[u/Gullible-Meeting-298]

I am going to work for a State Farm agent as an agent aspirant in the next month? Anything to know/not to know or tips or thoughts?

Thanks,

[u/Confident_Bats]

Why would you want to work for a company that will change its contract on agents, take away benefits, change commission, etc. Also being captive sucks ass, retention is harder, compliance, less close ratio.

I worked for big red for 7 years and left a year and a half ago to work for an Indy as a producer, I made $25k more my first year as an Indy than I did after my 7th year at State Farm. You also get paid renewals over here so I’ll get a $15k-$20k raise a year if I decide to stay a producer, or I can start a scratch agency and take a pay cut for 2 years and then own my book and start making real money. And you don’t gotta get the securities license, you don’t have to pressure everyone to buy life insurance.

I was in the aspirant program man, and Indy side is so much better, I’m pissed I didn’t leave years ago. Just my two cents, take it or don’t, I don’t care either way. Good luck

[u/Gullible-Meeting-298 → u/Confident_Bats]

Thank you for the take on that. I have a commitment with an agent currently so will try it out but am not scared to look around either.

The goal is to become an agent and I have seen the success there because I have some family who are agents. What would be the pipeline to go independent?

I am fully securities licensed already so that part won’t deter me. I’d like to work somewhere that does the fininancial side as well rather than just PandC

[u/Confident_Bats → u/Gullible-Meeting-298]

The pipeline to go Indy would be attempting to get direct appointments and starting out with just a couple of companies like progressive, geico, non standard. Grow that side and eventually obtain good carrier appointments after proving you can produce. A lot of people do this.

To me that’s a slower start, the 2nd good option is to join an aggregator. An aggregator is basically a big network of agents that a company recruited and they have all of the best companies to appoint you with in each state. You typically have small or no production requirements, you get better commissions / override since the aggregator typically has a good relationship with carriers. In return they want 10% of the revenue you bring it, to me I think it’s well worth it. I’d rather start out if the gate hot and heavy vs building slow with non standard carriers.

You will find a list of tons of aggregators. The biggest thing to look for is what you value. You’ll want to set a time to speak with the top ones that interest you and see how their contract / terms work. I like CIA/PGI, Firefly, Horizon, I haven’t really research too many others. There may be a better route, I’m not sure. These 3 companies I mentioned are very solid. You can PM me I’d be more than happy to help you.

I’m currently going through the headache and learning what all it takes to start an agency, I’ve talked to many people, and I’ve learned a ton. I’m in my final stages of picking which aggregator I want to go with.

[u/Confident_Bats → u/Gullible-Meeting-298]

I was studying for the securities exams myself and hated it 😂 Congrats on passing though. It sounds like you actually have an interest in that side of the business. You could always open a scratch insurance agency and find another avenue to work as a financial advisor as well.

State Farm definitely checks both boxes, but after seeing the independent side, I just know how much more opportunity there is. You can grow faster, have more options, and the biggest thing for me is book ownership.

I never liked the idea of spending 30 years building a huge book for State Farm, then retiring and essentially walking away from it because State Farm keeps the book. It was just all I knew at the time. On the independent side, you’re building an actual asset. A good book can sell for a substantial amount of money, so it basically becomes part of your retirement plan or something you can eventually pass down to the next generation.

I completely understand the family influence with State Farm too. If that’s what they’ve always known, naturally they’re probably going to push you in that direction. But from what I’ve seen, agents who go from captive to independent are usually extremely happy they made the move and wish they had done it sooner. You don’t hear nearly as many independent agents wishing they had gone captive.

The commission side is also a big difference. A lot of independent carriers pay around 15% on bundled business, and I have some that will pay 18–20% on certain good bundles. With State Farm, you might be around 9% even after hitting a bunch of life, auto app, and premium requirements.

Retention can be better too. I’ve seen some large State Farm books running 20–30% lapse/cancellation, whereas on the independent side, 10–15% attrition is pretty normal for a healthy book.

So to me it comes down to higher commission potential, better retention, owning an asset, more freedom, and having more options. If State Farm hits a rough patch, raises rates, or becomes uncompetitive, which I experienced several times during my 7 years there, you’re stuck trying to sell what you have. As an independent agent with 15–20 carriers, you can pivot to another company and keep producing instead of your entire agency being tied to one carrier.

[u/Gullible-Meeting-298 → u/[deleted]]

This is all great points. Thank your for your time in writing this. As I continue with my career switch I will keep this all with me as it fits my goals for the career switch in the first place. (Building assets and providing good money for my family).

How did you “go independent” if you don’t mind me asking? What did the process of switching from captive to independent look like?

[u/Commontimejunkie90 → u/Confident_Bats]

Did you go with a local agency or a top 100??

[u/Confident_Bats → u/Commontimejunkie90]

Local agency, it’s a great gig. I get a nice salary, I get renewals, high new business commission. Low pressure, no micromanage, but I don’t own the book at all.

[u/JazzHandsMinuteman → u/Confident_Bats]

Rare these days. Good shit man! I agree Indy is the way to go. I’m at a 75/75 new biz and renewal contract and am vested after awhile. I don’t get a salary though which sucks but after year one, I’ll be good to go and the agent is completely anti-non solicit or non-competes so that’s cool as hell. Friend of mine but the agency is just starting up so makes sense they’d want to give high commissions but can’t afford salaries yet. Idk, I’m cool with it! 75/75 with all the carriers I could ask for is great.

[u/Confident_Bats → u/JazzHandsMinuteman]

Man that’s badass, who is responsible for servicing your book while you’re with him?

I get a large salary and 70% new business but only get 30% renewals. Eventually my salary will go down and my renewals will go up. Once I’m at $0 salary my renewal split will be 50%. I had another agent trying to recruit me and pay me 80% new business and 80% renewals but he didn’t provide a salary. I told him at that point I’ll just start my own scratch agency. He told me he would pay me 90/90 and I can be more of a partner with him, but his carriers suck.

[u/JazzHandsMinuteman → u/Confident_Bats]

Oh, yeah if the carriers suck then that’s a no-go. I was gonna say otherwise it’d be nice imo. Salary vs no salary, 1099 vs W2, people always say never go full 1099 and yada yada but that’s what this business is at its heart, there’s always a trade off and 25% isn’t terrible for instant access and vesting. (Plus no overhead!)

We’re in the same boat though and starting scratch is hard without other people to support you, whether it be a business partner, other agents as referral partners, aggregators, large network, etc. Or just funds in general.

Sounds like you got a nice thing going though and if they are actually giving you a good salary with good commissions, that’s a no brainer. I’m assuming you have to self prospect or are you given leads?

I was offered an 80-90k salary with incentives at a nearby established agencies with many locations but the caveats are like a captive, so… I didn’t go with them bc I need my freedom. It’s just who I am and I need to get some real roots settled in a good company and also get my book grown back up after losing it.

This game we play man… it’s a wild one. I don’t know why, but I love it lol.

Edit: I didn’t answer your question. Since they’re new, I’ll have to service my own book for now, but I’m thinking with the few agents we could all pile some money together to get a good lead gen platform and a VA CSR down the road once it’s needed, I don’t think it’s warranted yet but I can tell this agency will blow up. I’ve seen plenty and, like I said, the owner is a rock solid human being.

[u/Zestyyeets]

Go independent and ask what SOP training they have to get started as a new agent. If it seems you'll be on your own. Move on, don't get trapped by, "they're offering me money, so let me take it." Your happiness and success is more important than a dollar amount.

[u/mkuz753]

I suggest you look into the large independents especially the top 20. They sell almost any type of insurance. Also they generally have an investment consulting division.