It looks like State Farm is getting ready to ramp back up the mutual funds line of business after a year-long hiatus. Makes sense in that the auto line continues to experience losses and the life line is suffering. What say you agents? Are you ready to get back into the arena? Will they bring the Field Sales Associates back for support?
19 replies (most recent on top)
Instead of an insurance company get into mutual funds why not combined our assets with a company like Edward Jones. They have the neighborhood presents like SF. We stay in our area of experience and Edward Jones stays in there area of experience. Both companies can share office space? We could get back to being a growth company with cross sales and being experts in our areas. If I have any money I am not going to SF for advice. How many executives or agents have their money with SF?
That info is right from statefarm.com . If it indeed hasn't been used in a couple years, then they need to get it off the site.
When I just started saving, I went to a 'financial advisor'. They sold me on these great American funds and even told me they had 'low fees'. After a couple years, I researched it and found out that you can get similar funds with no load (versus 5.75% with the advisor getting 5% of every dollar I invest for doing nothing other than giving me a brochure and misleading me), and the expenses were 1/4 of the American fund. So yeah, I'm a little bitter and if someone reads this and makes a better decision, then that's making lemonade out of lemons.
I truly hope this 'new' model will be different and that we keep a long term focus on a customer. This could be critical for agents to prove their worth. If we don't mislead customers and build some trust with investments, then it could help retention of other lines of business.
Azdz is right! Fees kill you compounded over time. You'd be a moron to pay those fees anywhere.
@azdz—You’re looking at the old model. Agents have not been involved in that for a couple of years now-and that’s not what they’ll be involved in moving forward. We’ll be selling the same products, with the same prices and fees, as other brokerage firms. Commission or fee based, and the customer will decide which. Online is not the answer for everybody, or even most bodies. You’d no doubt be surprised to hear that investing is the one area where millennials want actual human help and relationships MORE than the baby boomers do. And we’re basically the only option out there for the beginning or small investor who wants to have a real person they can talk to when the need it.
Literally just looked at the retail offerings and compared a target date fund with the Vanguard equivalent. First off.. SF fund, 5% sales fee (non for Vanguard) and an annual fee that is .8% higher than Vanguard. 5 year results? SF - 15.43%, VG- 41.34%. That's not even considering the 5% reduction in investment.
I couldn't be an agent. No way I could tell a customer with a straight face that this is in their best interest
There’s no mythical “zero fees” way to invest. Even a no load index fund has expenses, because nobody is going to do the set up, buying, selling, management, reporting and regulatory part for free.
Half a percent fee on top of everything will kill you over time. Someone needs to read common sense by john bogle.
We’ll be offering very popular, highly rated funds over the same platform and with the exact same fees as Merrill Lynch, Edward Jones , etc. But at those places you can’t usually sit down with somebody unless you put down $250 k.
Our business partner is excited to try this with SF because there’s a trillion dollar market of “small individual investors” who want to sit down and do face to face business, but nobody else will do it on small accounts. That unserved market is in our wheelhouse.
Agents won’t get rich on commissions of half a percent. But they might be better positioned to make other sales to people who are talking about money they have. It’s hard to get far with a customer who’s talking about his $7 auto rate increase like it’s the end of the world.
I never realized that doing some basic research into good mutual funds and going on to Vanguard’s website to pick out some well diversified index funds required business and financial genius. Considering the number of customers they have, there sure are a lot of Einstein’s out there!
Agents engaged in Mutual Funds typically have used their own money and time to get their CFP and/or RICP credentials. But it’s easier for you to pretend you are a financial and business genius, while all they do is play golf and collect commissions.
Why would I pay a commission to a State Farm agent to buy a Vanguard fund that I can go onto the Vanguard website and buy with no fee? Insurance agents aren’t financial advisors, they are sales people. If you want good financial advice, go to a certified financial planner
140 funds from State Farm, American Funds, Blackrock, and Vanguard. If you can’t find anything suitable in that lineup, the problem is you.
There are a lot of entitled, bitter people on here.
I see the working knowledge of the average agent and agent staff on a daily basis. There is zero chance I would intrust their help in choosing investments.
Wow! So now our customers can get a rate of return on investment less than if they just bought the companies in the DOW in addition to the used auto parts we put on their car when they get in a wreck! I bet Schlomo Goldberg and the other (((investment experts))) in corporate are rubbing their hands together thinking of the dumb goyim... I mean "valued customers" they can swindle before moving to Israel
They will not bring back FSAs. Plus, there are none to bring back. They were fired a long time ago.
State Farm is losing billions. Who in their right mind would buy funds through their agents?
Of course they’re in.
Oh, except for the Bloomington-Normal area agents. They’ll be having the worst year of their careers, god bless ‘em.
I don't see it. I left State farm after many years for less expensive options, because in the end once State farm started treating me as just another customer, I could get that for less, somewhere else. The same applies to investing, as I have shied away from high cost funds into index and low cost options. A company such as State Farm will have high overhead cost, as well as unfavorable motivations, neither of which would make me want to be a customer.
There are still questions to be answered, but I am planning to get back in. The whole thing will be very different. Additional licensing needed. Customers can choose commission or fee option. We will have MANY more funds available, including a wide array of highly rated, outside funds. The question is how to find people to have the conversations with. That’s getting harder, especially as many very good insurance customers have left.