No: State Farm is paid through commissions on mutual funds, variable annuities, variable life insurance and a 529 plan, and through State Farm insurance sales, as well as advisory fees. Its agents sell investments as registered representatives of State Farm VP Management Corp. (SFVPMC), whose Form CRS says they “receive commissions based upon the investment amount and value over time.” In its managed account program, run by State Farm Investment Management Corp. (SFIMC), the fee is 0.50% to 1.25% a year, set by your balance.
So State Farm isn’t a fee-only firm. Its advisory fee is published and lower than many, though, so here’s the full picture from its filings.
How State Farm is paid
State Farm’s investment business runs through two firms and its agents.
SFVPMC (CRD 43036) is the broker-dealer. Its Form CRS, revised March 10, 2025, says it offers “a limited menu of mutual funds within two fund families for one or two share classes, a few variable insurance products, and one 529 plan.” On mutual funds you “generally will incur upfront sales charges,” and the funds deduct distribution fees. SFVPMC receives compensation from issuers when you invest and revenue sharing from some fund advisers. It doesn’t monitor your investments.
SFIMC (CRD 3487) is the investment adviser, a subsidiary of State Farm Life Insurance Company. Its Form CRS, dated November 11, 2024, says it offers advice only through its wrap fee program, which holds ETFs and mutual funds in model portfolios managed by a salaried home office team. The minimum is $15,000.
The agents who sell these are independent contractors, and some representatives are their employees. SFIMC’s brochure says most of its advisers are also insurance agents for State Farm insurance companies, and each is also a registered representative of SFVPMC.
On its Form ADV Part 1, filed April 30, 2026, SFIMC reports being paid by a percentage of assets. The commissions sit with SFVPMC and the insurers, which is why its Form CRS is the place to see them.
The CFP Board’s standards allow “fee-only” only when neither the advisor nor a related party receives sales-related compensation. Commissions and insurance sales are sales-related pay, so State Farm doesn’t meet that test.
What else the filings disclose
Higher commissions on State Farm policies. SFVPMC’s Form CRS says “commission rates for State Farm variable life policies are mostly higher than for non-State Farm issued variable life policies.” On non-State Farm variable annuities, agents get higher commissions at purchase rather than over time.
Production incentives. Agents “may also be eligible for cash and non-cash incentive programs for meeting certain overall production levels,” in both brokerage and the managed account program. Some home office employees get bonuses based on agents’ new production.
Insurance alongside advice. SFIMC’s brochure says your participation is “beneficial to the State Farm insurance companies” because it may lead to a broader relationship that extends to insurance sales. Any insurance recommendation happens outside the program, in the agent’s role as a State Farm agent.
Moving from brokerage. If you fund a managed account with at least $15,000 from an SFVPMC account where you paid a sales charge, the advisory fee drops to the lowest rate, 0.50%, for about 24 months. The agent already earned part of that sales charge and then also earns part of the advisory fee, which the brochure calls an incentive.
What the agent earns in the program. Your adviser gets part of the advisory fee, at the same rate whichever model you choose, and no brokerage pay on the account.
Disciplinary history. Both Form CRS documents answer “Yes.” The details are on BrokerCheck and IAPD.
What State Farm costs
SFIMC’s wrap fee brochure, dated May 1, 2026, lists one schedule:
| Account value | Advisory fee |
|---|---|
| $15,000 to $99,999 | 1.25% a year |
| $100,000 to $499,999 | 1.00% a year |
| $500,000 to $999,999 | 0.75% a year |
| $1,000,000 to $9,999,999 | 0.50% a year |
SFIMC uses a “cliff” approach: one rate applies to your whole balance for the quarter. Apart from a customized fee, “customers are not allowed to negotiate or change the fees listed in the chart.” You can combine household accounts to reach a lower band. The fee covers advice, trading and custody, and it’s billed quarterly in arrears. Fund expenses and some account fees are on top.
On that schedule:
- $500,000: $3,750 a year (0.75%)
- $1 million: $5,000 a year (0.50%)
For comparison, fee-only firms that publish a percentage fee charge a median 1% of assets. On these balances State Farm’s program costs less. The difference is scope: SFIMC’s Form CRS says it only offers advice related to the program, a set of model portfolios. Fee-only planners who charge a flat fee for ongoing planning charge a median $4,500 a year (middle half $2,400 to $7,200), whatever your balance, though a flat-fee planner may not manage your investments for that price. A one-time plan has a median of $2,000.
Brokerage costs depend on the product. The Form CRS lists upfront sales charges on mutual funds and the 529 plan, and contract fees, mortality fees and surrender charges on variable products.
Who State Farm may suit
State Farm may suit someone who already works with a State Farm agent for insurance and wants a simple, diversified portfolio in the same place. The managed account opens at $15,000, the fee is published and not negotiable, and larger balances pay as little as 0.50%. Someone with a straightforward situation who mainly wants their savings invested may find that enough.
Someone who wants broader planning, such as tax, retirement income or estate advice, or who wants a firm paid only by them, may want to compare a fee-only planner. A fee-only planner can also review a variable life policy or annuity without earning anything from it. Our guides to insurance agent vs financial advisor and robo-advisor vs financial advisor go further.
How to check it yourself
- Read both Form CRS documents, one for SFVPMC and one for SFIMC, both on statefarm.com and linked from IAPD. See what a Form CRS tells you.
- Ask which role your agent is in for each recommendation: SFIMC adviser, SFVPMC broker or State Farm insurance agent.
- Ask what the agent earns on any mutual fund, variable product or policy, and compare it with the managed account fee.
- Ask for your fee band in writing, plus the expense ratios of the funds in your model.
- Look up your agent on BrokerCheck.
Our guide to telling whether an advisor is fee-only walks through each check, and questions to ask a financial advisor gives you the rest.
Compare similar firms
Other insurance companies we’ve checked against the fee-only definition: Northwestern Mutual, MassMutual, New York Life, Prudential, Thrivent, Primerica, Lincoln Financial, Equitable, Principal, Nationwide, Ameriprise. See all 50 firms.