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?
31 replies (most recent on top)
It’s really hard for the agents to get excited about selling these services again. The knee jerk reaction to pull the plug early, before the conclusion concerning the DOL ruling in 2017 was telling. And then to come back and say “we are back in!” Sends a bad msg to marketplace about our leadership to accurately gauge market conditions and how to position the company to gain the confidence of our policy holders moving forward. You know, there is a saying that third generation family member ruins the family business. Well, what we have here is third generation State Farm members unable to have the talent to correct this ship. We are kidding ourselves if we think we are going to be another Google or tech company in the future. SF needs outside help to grow this and these 3rd generation family (nepotistic) are unable to accept the fact that they have lived in a protective shell outside the norms of the competitive market place and have benefited from a brand(that is know a failing/falling brand) that is seriously in jeopardy of not being able to be resesitated. A sad time for a great company.
This is exactly what our company needs. Now that we are legally allowed to sell products to our dumb customers that we know are bad for them, our Agents can get back to doing what they do best!
Selling an annuity to a confused 90 year old granny? Done!
Targeting African Americans with whole life insurance policies that prevent them from saving and Harshly penalize them when they back out early? This is what our agents are trained to do
Giving our customers a rate of return less than if they bought the DOW? That's our mutual fund lineup for you. It's all part of getting MT his $8 million dollars per year
Oh my god 5.75% load plus expense fess are u kidding me>. Sell that get your E&O ready.
Better get more $$$ put away selling these bombs to currrent policyholders is a train wreck
Do the right thing
It can’t be that much $$$
No travel credits SC credits of u can sel this stuff u can sell anything Good Luck wouldn’t want to be u when market takes crash on
this political septic field
The market fall off that is Coming is going to be like a ship going under quick
Emotion usurps logic
@2qnj....As a matter of fact, that will be happening. The customers are already asking. I have several Mutual Fund clients who’ve been asking when we’re letting agents back in the game because they want to come in and talk. They have been quite upset about being handed over to the call center. Even in our old funds, I had a couple of $500,000 rollovers and one that was very very close to $1 million. In the new model, there will both commission and fee based options for those folks. But it will be their choice, not mine.
Contrary to what you’ve convinced yourself of, there are a lot of people who strongly prefer to talk with someone rather than looking everything up online. Oddly, millennials, who do everything else online, prefer to sit down and talk with someone about investing for retirement. And the vast majority of firms won’t even let them sit down for under $250k. Strictly call center for them.
These are usually multi meeting things. And my larger cases have all been relationship driven. They were people who have known me for a long time, or people who were referred to me by somebody who has known me for a long time. We discuss what they want to do, I show them what options we have to offer, and THEY decide whether it works for them. Sometimes they put it on autopilot, and sometimes they want to come back later to review and update. I don’t think that people sitting in the sea of cubicles understand that THAT is how State Farm works. Until I went to Agency, I know I didn’t.
The math is not difficult. 1oqv did it, so did 2nvc.
2rlf- And your point is.... The agent won't? Whirl Dervish, whirl.
With the sales load, expense charges and annual fees approaching 8%, I would compare this to a payday short term loan operation.
Can’t make any money selling $50.00 month IRA’s why do u think the Farm unloaded back to black rock.
@U1fxSWu-2dlc So if it so easy as to compare the math, why bother with an advisor at all, read the prospectus and make a decision? You are a fool to think the advisor is not going to blow smoke up your a-- about returns on the funds they sell over another fund they do not sell.
2sgu. Go to your Farm agent and ask about other funds. Same logic applies. Math (in this case arithmetic) is the great equalizer. It does not bow to ideology, brand loyalty. This is what you discuss with the advisor to cut through the obvious, adolescent, pointless comments you submit.
-irng: Fee based? Do you imply a person with 250k to invest would approach a State Farm agent for advice and this agent would sell them investment products on a fee based agreement. This is at best an anomaly, at worst a fantasy. This is a quarter mill!! Not the choice of 100.00 v 250.00 deductible. By the way, I welcomed a newborn son. Very healthy. Can you sign him up one of those life protector deals? I would rather put the funds toward premium and pass on Vangaurd's return. Where do I sign?
@U1fxSWu-2eru So go to an advisor who sells funds and ask about another adviser who sells funds and expect to get an honest, non-biased, non self-serving asnwer? Will this novel technique work with car dealers too? How about real estate agents? If there is a commission involved they would stab their own mothers to make the sale.
Go to a reputable, independent, financial advisor. Tell them you are planning to invest in SF mutual funds through a SF agent. Then listen to the advisor. That's it. These funds are not the best for the investor. Spin it all you want here, it doesn't change a thing. The Motley Fool article was spot-on. When these plans benifited the company and agents they were pushed;then they were dropped for the company and agents. Do your homework. These are funds sold by a middleman for the benefit of said middleman. This is FACT folks, now let the SF spin continue. Ice makes the Kool-aid go down easy.
Don’t much care who was the President....this was a factual explanation of why a rule was imposed improperly and never actually implemented. Your allegiance to one party or another has nothing to do with it.
President Obama to you fella. You must not have been in the 401K that grew exponentially during his 8 years with no help from the party of treason. Get off faux news.
But the new funds will still be load, high fee funds compared to what you can get at somewhere like Vanguard. It is a really bad look that when a rule passes to only allow you to sell what is in the customers best interest that we run away from the business but now we are returning because that rule no longer applies. It is sketchy as hell and it makes me feel pretty dirty.
You folks keep talking about the currently posted funds and fees as though these are what we’ll be selling. They aren’t. The new funds and fees will not be fully established until all the new rules are fully clarified. Agents haven’t been selling that product you keep quoting for quite some time now.
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
Do the math
@pxw...”Why do you think they came out with the DOL rule?”. The exact phrase the Obama administration used was “commissions and other schemes”. He decided everybody should be on a fee based system. The SEC and other financial regulators said -wait, it’s not that simple-but he didn’t listen. He decided to ram a financial regulation down their throats by creating a rule under the Department of Labor (under the premise that the DOL can regulate employer sponsored retirement plans). So that’s how a financial regulation that was opposed by financial regulators got forced through.
The reason State Farm and many others argued against it is this: You can run a company on advisor fees when you handle large investor accounts and large rollovers. But your everyday worker trying to save in an IRA is excluded from the market if you go to fees exclusively. A worker who wants to save $50/month to start can’t afford a $1500 advisor fee to open an account. He can’t even talk to a Merrill Lynch rep for less than $250k. And someone who sells financial products only can not afford to be working with that individual because they cannot recover their business expenses. State Farm agents mostly sold Roth IRA accounts to people like that. There were some rollovers, but we have a lot of “little guy” accounts that nobody else would even do.
SF got “out” not because it was a little tough. They got out because agents were temporarily in an untenable position. One set of regulations required us to sell under the suitability standard for a commission, and another prohibited it.
Even though the DOL Rule got rammed through, it never stopped being scrutinized. The DOL itself abandoned the rule, recognizing it would be unworkable and that a non financial agency was not the best place to try to regulate financial products. Negotiations are still underway to finalize what the rules will look like, but it’s starting to come together. Customers will now be offered either a fee based, fiduciary product or a commission based product with some guidance.....and the choice will be the customer’s. I like that because they can’t ever legitimately say I made the choice for them, and that it was whatever is best for me.
This really said it all. In the late 90's it was about all things financial. Sell, sell, pitch,pitch. I would love to have documented conversations between agents and customers to quote here; any one who was with the company during this period should remember this constant message eminating from Bloomington. Financials were sold, they profited, and when things got uneasy, THEY BAILED! Now they want back in? Do not invest with or work for fair-weather folk, only with an organization that will be there, with at least an acknowledgment or your best interest, not flakes. There used to be a sign at the home office for claims people which read "sell or be sold," since removed for the obvious reasons. We've been sold.
Better take a look at street fund screener on the SF associates funds c- ratings it’s pretty ugly
Our clients have access to Blackrock and American Funds and these are strong funds . Our policyholders will have more options. I am a client of State Farm Mutual Funds and Associate Funds the State Farm Funds did a better job than a lot of other funds. This is great news
Train has already left the station on loaded Mutual Funds, Look at Schwab, Fidelity and Vanguard same thing .20 expense and no-load I can’t imagine someone looking into a clients eyes and saying that a good deal.
Why did you think they came out with DOL rule.
Mediocre performance. My 5 year old nephew could do better than these people.
Blackrock Funds will be sold at exactly the same cost whether through SF, Edward Jones, or Merrill Lynch. You haven’t seen the schedule yet, so you can’t very well comment on it. There are actually four different schedules ready to go, depending on exactly which way the Fiduciary Rule finally settles out. Bitterness is one thing. It’s entirely different to make up facts and then use them for your argument.
2018 we are still a middleman selling marked up funds. Of course BlackRock is happy, it’s another distribution channel for their funds. Have fun convincing customers to pay more for the same funds they can get elsewhere....basically not the customers best interest at all.
An article from 2016 is completely irrelevant, given that after the whole Fiduciary Rule fiasco, we will be selling different funds, on a different platform, under two completely different sales models. And Blackrock is thrilled about it. They negotiated a very different deal from anyone else in the industry, because their numbers tell them State Farm agents serve a very different market niche than anyone else.
You are a fool to buy mutual funds from State Farm. SF is just a middle man that adds fees to get a cut without adding value.
Here is story from the motley fool about SF’s high fees:
https://www.fool.com/investing/2016/10/14/state-farm-mutual-funds-alternatives-to-its-high-f.aspx
I've checked the market and the SF fees are VERY reasonable
State Farm mutual funds have super expensive fees compared to the market you would be a chump to buy them .