Background
World Financial Group is an MLM company dealing in financial instruments. The sect I came in contact with typically recruit from the
Asian community. There seems to be an interest in recruiting college students and those who have recently become unemployed. After a personal investigation, I feel it appropriate to share my experience with this group. The conclusion being that members may engage in deceptive tactics to sell high-cost financial instruments with evidence that they may suppress information which attempts to expose them.
The group has gone through various name changes (WMA - World Marketing Alliance, WFG - World Financial Group, WLG - World Leadership Group). I recently dated a girl who was involved and what I discovered was a bit scary to say the least. Something was always sort of off about her (why repeatedly attempt to sell me an insurance policy when I work for a fortune 50 company???). She had been in the group for around 5 months, and became more and more obsessed with "the business" as time went on. I knew something was up and did a bit of investigation.
Regarding Income Claims
The group has been described to leverage deception and employ a cult-like environment, very similar to
criticisms of Amway. Yes, I know it sounds crazy, but I discovered the branch manager did not own the house he claimed he paid for at a recruiting event / house party via public property and mortgage records. This may be a tactic used to draw members. If one makes themselves seem more well off than they really are by renting expensive cars and homes and they can potentially pass them off as having been earned through "the business". I have received PM's in response to this very post describing situations where the upline leases an expensive car to a new recruit. The recruit is now paying for the upline's vehicle while using the car as a symbol of proof that the business works. These types of incidents are corroborated by reports given in the
xwma archives. This is often referred to as "Fake it till you make it" and has been cited as being a motto used within WFG in this
thread.
- (Update 6/5/2015) : Regarding the homeowner, I found the 17 year WFG CEO MD level individual holds a $334,000 IRS lien from 2008. That is enough to place in the top 200 list of delinquent taxpayers in the state of California. All of this information was obtained via public records. I strongly urge that if something does not feel right to ask the right questions. It likely this home is in another name to avoid seizure by the IRS. The individual claimed he lost a significant amount of money due to gambling. Eric Scheibeler wrote an expose on Amway in 2008 titled "Merchants of Deception" which can be downloaded here. Page 162 gives a description of high ranking Amway members who are actually in financial turmoil, and you will notice various references to IRS liens and the aforementioned gambling excuse. Scheibeler claims that anyone who is truly making massive money in Amway is doing so through the motivational tools and seminars, and describes individuals as being so wrapped up in motivational effects that they will continue pursuit of "the business" even while making themselves broke in the process. I would highly recommend anyone considering involvement with this group read this text as due diligence, ultimately it is your decision. Keep in mind, I only went to one company event outside of sales pitches, and at that single event, after investigating the supposed owner, all of this turned up.
The event was a bit odd for an outsider, e.g. guy evangelizing that he came from nothing and became rich and you could have a house like him if you joined the group. People taking pictures of the house and sending it to recruits, and an all round eerie vibe. One of the members mentioned he had stopped talking to his parents and dropped out of medical school in order to pursue a life in "business". If you go to another area or city with a different branch manager, you will see the same event and similar storytelling played out before you. There are many reports claiming that these "successful brokers" are actually broke (see:
xwma.org reports).
Concerning false income claims, you can take a look at the FINRA disclosure for WMA (The precursor to WFG) by visiting
this link and typing in 32625 for the FIRM CRD#. Next, click to view the detailed report. There are plenty of interesting allegations in there including reports of agents selling unregistered securities. The very first disclosure states a violation for "The use of ASL omitting material facts, and the use of ASL containing exaggerations, unwarranted and misleading statements". A screencap of this disclosure is available
here.
If you are curious in learning more about complaints regarding WMA (the precursor to WFG)
this RIPOFF report contains a vast amount of information. This is important because many of the leaders in WFG were previously aligned with WMA.
Past Infractions with the SEC
There are
many, but
this one is particularly interesting: The SEC alleges that the five registered representatives, who worked for World Group Securities Inc., paid themselves high commissions on both the subprime mortgages and the securities purchases.
The customers generally were of modest means, had little prior investment experience, and had little or no formal education beyond high school. Some of the investors did not speak English fluently or at all.
Response
When I brought this up to my ex, I got told I was crazy and the person ceased contact. Possibly as an order from the upline and told the entire office was laughing at me. Literal solid proof that this was going on and I am untrusted then discredited to the local office. Okay, sound unbelievable still? You will notice online that negative commentary concerning members of this group are censored. Seriously, note that Google gives you omitted results when inquiring about some of these things.
Investigation of Product
I would not believe it if I hadn't experienced it myself. The company sells a variety of insurance products but it seems like the only thing I was ever pitched, and other reports confirm was the FIUL policy (Indexed Universal Life). I was told that through the FIUL I would be investing and getting life insurance. After examining the details I found that you typically pay out the whole first year to the agent who sold you the policy as commission, and the high maintenance fees plus cost of insurance have a potential to eat up any sort of "savings" the policy was supposed to retain. Take a look at
this recount for what you may be pitched. Also look at this
post by a fellow Redditor who claims his brother was sold a policy that looks like an IUL of sorts at the age of 24 for a reported cost of $500 / month. My recommendation, let them draw you up a policy, have them print it out, then take it to any reputable firm (specifically a CFP or Certified Financial Planner) to get the full details on what you are being sold. An ex-member informed me that many of these policies are defaulted on after 4 - 5 years resulting in potential surrender fees that leave those who default with nothing. Keep in mind, these are generally hundreds of dollars per month FIUL policies being sold to low income families. Your agent may not always have your best interest and may be misinformed (see below), so it would be wise to validate before making any decision.
According to this
article from Money Magazine, up to 15% of cash-value buyers nationwide give up their policies by the second year, and Western Reserve executives say WMA's clients are "in line" with that average. Too bad: Surrendering in the first year means losing most or all of the money that you paid in. Here is another
scholarly article that describes how IUL policies may be used and abused with background on how they are able to be sold with minimal licensing. Take note of the scenario described in the section titled "the Ugly", it states "While a poorly designed and poorly disclosed IUL product may perform badly for some policyholders, when it is combined with a premium finance strategy, it can produce truly ugly consequences. Premium finance involves the borrowing of funds from a bank or financial institution to pay premiums." Notice that
this recount states "The last "business meeting" I went to, there was a woman giving a presentation on how to convince people to make only minimum mortgage payments, re-leverage their home in some cases, and stick all of the money in whichever one of their partners mutual funds they were pushing at the time." It may also be relevant to take a look at this Forbes article regarding Universal Life Policyholders -
Retirement Disaster Looms For Universal Life Policyholders. In addition, the following quote taken from
USNews.com may be useful If you are being pitched a whole life or universal life policy from any provider: "Life insurance is a tool, not an investment. With whole life/universal life insurance, you will pay a higher premium with the promise that the company will take those extra dollars and invest them for you. The problem is that this type of insurance is very expensive. The investments don’t grow because the expenses eat up your interest. In 29 years as a financial planner, I’ve yet to see whole life or universal life pay off for any client. Often, people have little to show for such policies other than the money they paid in. Whole life and universal life policies are the reasons why life insurance companies can afford big buildings and Super Bowl ads. The only time these policies make sense if you have an estate-tax problem but this is a subject beyond the scope of this post."
Criticisms of IUL
Here are some more sources. It is my opinion that even though the agents may be licensed, they usually have little if any understanding of the actual products that they are pushing, specifically in the IUL category. If you need a plain and simple explanation on how IULs may be abused, check out any of the resources below:
For a clear explanation, Chapter 3 of "Investing for Dummies" in the section "Avoid these supposed tax saving investments"; it states: "Another investment that many salespeople love to pitch is cash value life insurance. Life insurance that combines life insurance protection with an account that has cash value is usually known as universal, whole, or variable life. Life insurance with a cash value is, at best, a mediocre way to invest money and at worst, a terrible mistake, especially if you haven't exhausted contributing money to retirement accounts."
FIUL guarantees that I will not lose my investment because returns employ a 12% ceiling alongside a 1% floor, this means I can never lose money - hypothetical
Ignoring fees, agent commission (typically 90 - 100% first year premiums), and cost of insurance, we can employ a
direct analysis comparing a 12% max and 1% min return rate to actual S&P returns. From 1995 to 2014 we see that 10k invested at 12% max and 1% min would yield 45k as compared to if it were invested directly into the S&P, we would see a return of 65k. If we look at 1985 - 2014, we see that 10K would grow to approximately 90k in the IUL and 255k if directly invested in the S&P. Where do you think this difference goes? Hence the commonly given advice from legitimate financial advisers to "buy term and invest the difference". This isn't debatable, these are the actual historical return rates. Note: A 200k term policy can be had for around $21 / mo. How much are you currently paying for coverage?
Do agents pitch IUL policies in light of these facts?
If you believe
this response from a self proclaimed WFG agent in this very thread to be authentic: "He could have talked to one of the bad apples out there, and we all know that there are bad apples in every single major business there is, am I right? However, he is right that the agent tried to “pitch” him the FFIUL from Transamerica. That is because it is simply one of the
best products out there in our industry with good guarantees that I believed fits his financial needs."
Here is another agent's point of view,
/u/toolbocisascam sent me the following rebuttal (grammar retained) via
PM:
Toolboc, Stop using old information about WFG to try to discredit a great company. Just because you had a bad experience doesn't mean the whole company is bad. Everyone got in trouble when it was WMA. We are owned by Transamerica now and that kind of stuff isn't happening. One of the ladies in our office put her kid through College with a IUL. She saved 43k tax free and pulled it out when she needed it. Insurance companies make money! That is how they stay n business. IT'S A BUSINESS!! If you don't make money you close. To invest directly in the S&P 500 is a great way to loose what you invested. The IUL keeps it safe!!
Do you notice a pattern? How is it that these salesmen come off so certain about an arguably unsuitable product? What is the primary audience? According to WFG literature they claim to stand up as a financial security service for low-income families. Hmmm... It starts to look like there is some enticement with the whole showing off of houses and rented cars then coupled with misinformation regarding financial advice. I wonder if these recruits are encouraged to purchase IUL's themselves? (Every agent I ever asked told me they had one) Is this by design?
Were you pitched an IUL? Do you currently pay into an IUL?
If you make less than 250k / yr and aren't currently facing estate issues, you may want to get a second opinion. Let me guess, you were pitched by someone close to you (friend / family)?
We sell a variety of products though through various insurers, IUL is not all we sell - hypothetical
Of course these guys are all licensed though, so they know what they are doing better than those who aren't right?
Correct, recruits are usually licensed to sell insurance which has qualifications that vary by state, which does not require an advanced degree.
According to
The Bishop Company LLC Report: Under current law, indexed products are state regulated and do not require a securities license to sell. However, the Securities and Exchange Commission (SEC) has fought since the 1990s to bring indexed products under federal securities oversight due to numerous consumer complaints and regulatory actions by state attorneys general regarding the products’reliance on the performance of equity indices and comparisons to directly owning equities. Despite the current federal law declaring that indexed products are not securities, the debate continues at the state level as to whether the recommendation to move client funds from securities to indexed products constitutes investment advice. Some states have adopted regulations regarding the recommendation of indexed products as substitutes for securities that can cause agents without securities licenses to lose their state insurance license if violated. The Financial Industry Regulatory Authority (FINRA), which is the self-regulatory organization that oversees all securities firms and securities licensed professionals, has also expressed concerns over inadequate disclosures of the fees and charges within indexed products. In 2012, FINRA announced that all broker-dealers must create written supervisory procedures to monitor the sales of these products by securities licensed agents. Unfortunately,this rule has no force over agents who are not securities licensed (Most agents are Insurance licensed) and thus, provides no protection to consumers that purchase products illustrated using unrealistic earnings projections. In order to fully appreciate the concerns over indexed products – and more specifically, indexed universal life – it is important to understand what the product is and how it functions.
How can agents ignore facts in the face of evidence?
There appeared to be a cult-like "us-vs-them" attitude in the group I encountered. Members were encouraged to cease contact with those who are against "the business". Within Amway this type of situation is often referred to as an "Amriff". Mention something skeptical about the business and you will be called "negative" and "arrogant". Many of the agents I encountered could be described as fanatical, see examples in many of the responses below. For example,
/u/PovertyKiller states :"You died at where we call the killing zone, or sign then die, you kept trying to find faults of the company, and your mind completely consumed it, not willing to change while you were there, feel sorry for you, that you wasted your time. and now even more time looking for uncertain facts to back you up".
Top performers are rewarded with exotic vacations, I know because my recruiter brought me along for one before I was recruited. -hypothetical
Those
trips they boast about? They may not be paid for in full by the company. It may be
out of your own pocket or an investment by your upline to put you in a conference. An ex-member informed me that after a trip to Tahiti he received a 1099 for $16,000.
Furthermore, we received life-changing advice on the trip that has now convinced me to devote my life to helping families out of poverty with financial services. The best part is that these events don't produce any profit, we just donate to keep them at cost. We also get access to special books that you can't buy anywhere else, of course these are sold at cost for our benefit. No one makes money off of these tools. - hypothetical
Check out this
internal training guide, specifically the last page that states "The Four Wheels Needed to Run Your Business". Notice some of the suggestions "Attend BIG EVENTS and BOOT CAMP trainings to learn the A-Z of your business" and "Read books, listen to CDs, attend Seminars to improve your skills".
Events, Boot Camps, Books, CDs, and Seminars. Guess what those are? Those are products... Guess who buys them? People within the organization (i.e. recruits). ... Guess who doesn't buy them? People outside the organization... Do you know what this looks like?
I'm going to stop and state it very clearly... There is nothing wrong with WFG on its own, it is perfectly legal. However, the MLM aspect may allow for a system wherein racketeer influence may abound. The issue is that this money isn't always coming from the product, it also comes from the motivational businesses. These are groups that exist solely to create a dependency on their products/seminars/conferences/tapes to ensure your success in the product front. When you book travel, it goes through an affiliate agency; this completely contradicts choice of airline etc. You will be repeatedly sold "tools" in the form of books, videos, DVDs, seminars (often in the thousands of dollars) etc. to guarantee your success. The product front will typically wrap around a high cost product that is difficult to sell on it's own. While these pay out, it is insignificant compared to the money that is made off of motivation. These "tools" may be encouraged to be purchased with cash, specifically so that the money may go unreported. Now when someone figures this out, the group wants to silence you or simply convince you of false arguments against the parent company i.e. calling it a pyramid scheme. When you mention cult-like effects, it comes from pawning a dream onto someone that is attainable through the product front which perpetuates that success is around the corner if you would just get on board with the tools. It creates an all-consuming misdirected dependency. Consider that each person that you introduce to the product front is now a recruit for the secondary tool business in addition to everything else. These seminars will have you believing that you can sell more, you will see people being rewarded for in fact selling more than others, but they will never have the success until they wake up and realize how they are being taken advantage of and do the same to others. You may be motivated into purchasing office space for expanding your business, which again makes you a recruiter for the secondary tools. Read some of the internal docs I posted, the group trains on recruiting people who have purchased your product. And consider, who these clients are. Anyone fortunate enough to be employed by a legitimate company will typically have insurance offered by the provider. Those people are not in this market, so just exactly who is? This isn't a product needed by most people, but for those who believe in the dream they sell. Now you have all this smoke and mirrors going on validating what you are doing when it may in fact be harmful.
Why would recruitment be heavily emphasized and based on "dream-selling", is it for your benefit or does it serve something else? I mean you guys love to tout that you give everyone a chance and that anyone can try their hand at this exceptional business opportunity. At the end of the day, it's almost as if being a warm body is good enough? Perhaps simply being a warm body is good enough for something... Something that exists within the organization that benefits a select few.
But it's my business! I'm an independent business owner! I am an entrepeneur! - hypothetical
Really? Are you registered as an LLC, S-Corp or other official designation? Do you own your book of business if you leave the company? Can you create advertisements without approval? If you wanted to record a meeting and post it to Youtube, would that be allowed?
Are you sure you aren't actually a contractor who pays for everything that is usually paid for by traditional companies (training, books, travel etc)while being restricted in your ability to perform independently?
Leveraging warm market and personal contacts
They ask you for 25 names when you are recruited, and may call these people
using your name and relationship to leverage a recruitment or sale. The entire system being commission based and recruit focused with attention to leveraging the trust of those around you which arguably creates a system wherein racketeer influence may abound. If you found out you were sold an unsuitable policy by your friend or relative, would you turn them in?
Shortly after initial contacting from a recruiter I began receiving multiple calls from similar "business opportunities" for example one for Kangen Water filters. This corroborates reports of MLMs selling off information to other companies as lead generation.
You are negative, why was our company showcased in Forbes magazine idiot!? - hypothetical
Because an advertising space was paid for...
See this
rebuttal for an example of someone defending a deceptive MLM, in a Forbes article, completely unaware that the group they were defending was in fact withholding information and making false income claims (The FTC literally shut this group down after appropriate investigation was performed). Your tone and defensiveness sound very similar.
Look, we are backed by a billion dollar company, here is proof - hypothetical
Correct, WFG is backed by Aegon and Transamerica. Amway is also one of the largest companies in the world too with a backing from Alticor, but a quick search can turn up plenty of interesting stories related to their MLM. Keep in mind, while related, it is important to differentiate between a parent company and the motivational groups that may exist within.
If this type of business is so questionable, why doesn't the government shut it down?- hypothetical
Furthermore, why would you expect the FTC to do anything?
In April 2016, a new FTC rule was supposed to protect prospective distributors by requiring companies to provide a one-page disclosure form that includes support for earnings claims, a list of previous legal actions against the firm, and its cancellation or refund policy. But the regulation, which went into effect in April, excludes multilevel marketers. Critics of the $28.5 billion industry—which also includes Avon, Herbalife, and Tupperware—say that’s because of intense lobbying. “The industry raised a firestorm of opposition to a rule that for any legitimate company would not have been too burdensome,” says Douglas Brooks, a Boston franchise attorney who says he has brought 10 class actions against MLM companies over the past 20 years. -
Source
On the front line of the lobbying effort to secure an exemption were three lawyers who had previously held high-level positions at the FTC: Timothy Muris and J. Howard Beales, both working on behalf of Primerica Financial Services; and Joan Bernstein, who represents Amway’s North American unit.
Is this a conspiracy?
I have provided facts where applicable along with sources for your convenience. I can only suggest that you think and decide for yourself. Personally, I believe this is the result of intense lobbying which has allowed for questionable business practice to flourish legally which has the potential to take advantage of those misinformed as a result of outright protection from the FTC regarding full disclosure of "income opportunity" statistics.
Are agents trained to respond to objections?
Family / Relationship Effects
Past Exposure of questionable behavior
Fortunately, back when the group was known as WMA, up until around 2006, a group formed to expose the true nature of what goes on in the group on xwma.org (ex-WMA). It was pulled down for unknown reasons, but.... Using the Way Back Machine (an internet archive service), you can see this website as it was when it was still standing in 2006. There are accounts from past WMA and WFG employees that you will likely find shocking if you have spent any time near this group or those involved.
The important thing to notice when going through the information above is the pattern. Again, you get allegations of rented cars, rented homes, cult-like evironment, mention of selling on Variable Universal Life policies (the name of the cash value policy being pushed at the time). It is important to note that these types of allegations are not confined to WFG but are rather common in MLM at large.
Suppression
Why haven't you heard about any of this? Because it may be suppressed. SEO appears to bring up the
following. It seems like they don't want you to know is what actually happens when you invest time in the group (which likely varies in different locales), and may be why this information is so hard to find. I read that one person claimed to have lost his life savings to the group and successfully sued but was unable to describe details as part of the settlement agreement. Again, research Amway for similar recounts. For recounts that relate specifically to WFG, I recommend contacting the
Zamansky law firm located in New York. They claim a specialty in investigating fraudulent and unsuitable sales of annuities and other insurance and investment products by representatives of World Group Securities, Inc. a/k/a World Financial Group (“World Group”).
Suppression is not uncommon, in fact similar tactics have been employed by the Church of Scientology as described in this
recount from an ex-member. An internal message from ex-Amway VP Ken McDonald describes a
strategy where it is suggested to "provide very soon, for all those who qualified Emeralds and above who want it their own personal homepage so we will have tons of positive Amway information on the web." along with "we’ve moved the positive Amway sites quite a bit up in the web search engines, and some of the negative sites down". In addition, Amway has been cited as enforcing tactics to
suppress online information, going so far as to make claim that unfavorable comments actually come from rival Proctor and Gamble. See if you can notice a similarity when this WFG proponent makes the following
statement in this very thread: "I'm a little disappointed that no one who is part of the business has given a real reply to this, except for the guy spazzing in caps which I'm not even convinced isn't a planted shill to make WFG look bad. I'm sure there are some legitimate concerns, but competing companies have been known to masquerade as unbiased reviewers to discredit the company. I'm looking at you, Primerica." Primerica may be seen as a rival / scapegoat to WFG as they are a similar MLM but tend to focus on selling Term life insurance policies and investing the difference. Upon initial posting of information against WFG, I experienced the
following. Outside of these examples, you may find interesting modifications in the
edit history on the Wikipedia Page for WFG.
Personal Attacks
As further evidence of suppression, my first post to
/r/jobs was deleted due to the arrival of shills on my
original post. Admin,
/u/appropriate-username has recognized this as a misunderstanding and given permission to repost. I think people should be aware of this. It's pretty weird to say the least. I've been
harassed multiple times since posting this content. It's apparent that something about this content bothers a few individuals enough to create new accounts and attempt to discredit me with offensive remarks. I think people should know about this. In fact, I was recently assaulted while on a machine at my local gym and told to "watch my back" as the assailant fled (this may or may not be related to these events as I was not able to catch the assailant, but is worth mentioning).
Commentary on MLM
For anyone reading this thread looking to understand the bigger picture
see this rebuttal, I suggest expanding the deleted comments as there are some interesting rebuttals and examples of the fanatical support from those involved. For the record, WFG is not a pyramid scheme, no matter how close it may resemble , it is not. However, the MLM structure may facilitate groups wherein racketeer influence may abound. This has been cited in various MLMs and may explain the scenario of the aforementioned CEO MD. You won't find books on this particular organization but you can find applicable information by researching MLMs in general. It is my suggestion that you can gain applicable clarity around the vagueness of the business as it is usually presented by comparing to Amway. Amway is considered the original MLM and this group falls within the classification of MLM by their own definition. Two of the more recent and telling books on Amway include Eric Sheibeler's Free e-book
"Merchants of Deception" and Ruth Carter's
"Amway Motivational Organizations: Behind the Smoke and Mirrors". These books can help grasp the wider mechanism of characteristics found in MLMs (specifically what are often referred to as "motivational organizations") including false income claims, deceptive recruiting tactics, information control, groupthink effects, potential financial ruin, and how the trips / conventions work. Within the first 20 pages of either of these books, you should begin to see many similarities and the light bulb will go on. There is no simple one-sentence explanation as MLM operates on a variety of levels that requires a decent bit of reading to understand. Ultimately, it is your decision to perform due diligence before pledging involvement. If you are considering involvement in any MLM under the pretense that such opportunities are highly profitable, I would recommend taking a look at
THE CASE (FOR AND) AGAINST MULTI-LEVEL MARKETING: The Complete Guide to Understanding the Flaws – and Proving and Countering the Effects – of Endless Chain “Opportunity” Recruitment, or Product-based Pyramid Schemes, specifically
Chapter 7: MLM’s ABYSMAL NUMBERS, which discloses an analysis of multiple MLM opportunities (WFG being mentioned). The conclusion being that regardless of product, MLM opportunities consistently favor and pay out those at the top with approximately 99% of participants losing money.
https://www.reddit.com/r/jobs/comments/34c6im/world_financial_group_be_careful_of_this_mlm/
Should I Join World Financial Group?
Unless you already want to become a financial planner, there is absolutely no reason to consider joining World Financial Group. If you do want to get into financial planning then this is a way to do so, but should not be the only opportunity you look at.
WFG focuses on people who are 'new to the industry' and tell you that there is 'no experience in financial services necessary'. They are proud that many recruits are 'first generation Americans'. They use these as selling points, but we see them as red flags.
They don't want people who have financial services experience because they are more likely to know how the industry works. This makes them less likely to believe that this is a miracle key to financial freedom. They will also have a better understanding of products so maybe they won't like the ones which WFG asks them to buy as part of the sign up process.
First generation Americans, or immigrants, are less likely to have previously owned investments or insurance in America. This means they too are more likely to accept the expensive high commission products without questioning whether they are the right choice or not.
World Financial Group will tell you that because of their 'team' MLM structure there is no competition. This is completely untrue. There are 1,000s of other companies selling financial planning products. Every one of them is your competition. To make things worse, every WFG associate who is not directly below you in the system is also your competition. Every time they find a new prospect, that's one more person who you will never be in your team.
If you want to be a financial planner, then get the education and start applying for a normal job. If there are no jobs available, then maybe give WFG a shot because the one thing they do have going is that they will give you a chance. Make sure that you have a system for finding your own customers and selling financial products. At the end of the day sales is the only way you will make money in WFG (or with most commission based financial planning roles)
http://www.finance-guy.net/streetonomic/world-financial-group-review
Cost To Join World Financial Group
The administration fee is $100.
In order to sell all of the products and serviced provided by WFG, you must become fully licensed which cam cost you anywhere between $500-$1000 for exam materials, exam fee’s, registration fee’s and other educational costs.
If this is the field you want to be in, I am sure it’s worth it.
There is also a $30 Life Licensed, $100 registered rep, $125 investment adviser.
Their life insurance policy is about $200 per month…
A little pricey if you ask me…
Agents have one big incentive to do this, and that’s CASH MONEY BABY. Commissions on universal life products are huge, often totaling a year’s worth of insurance premiums up front to the agent. Most WFG agents will get about 30-40% of that since so much of the compensation goes to people above them in the pyramid.
World Financial has a little more diverse product mix than Primerica. Through Transamerica and at least one other insurance provider, it offers everything from long-term care insurance to annuities. Word is Transamerica’s policies are pretty expensive compared to others, so I’d recommend at least getting a second opinion on price before committing to something WFG offers.
Investing with World Financial Group is pretty much equivalent to investing with any other mutual fund salesperson. WFG offers the same funds from the same fund families as everyone else. All of the usual suspects are there, including Franklin Templeton, AGF, Mackenzie Financial, CI, and so on.
The company can also refer clients to mortgage brokers, banks doing debt consolidation loans, and so on. I would assume the agents get a kickback each time this happens. Naturally, the agent who told my reader to borrow $50,000 had a mortgage broker who could get him a killer rate.
Should you invest with World Financial Group?
This is going to sound pretty familiar to those of you who already read the post on Primerica.
I still maintain the average World Financial Group agent is probably worse than the average Investors Group agent or the nice lady who works at your bank. If agents aren’t going to be supervised closely, bad stuff is going to happen.
But at the same time, I think some of the bad reputation is unwarranted. Most WFG agents are regular folks who legitimately want to help people. They get distracted by the constant pressure from their superiors to recruit more people.
Many of these people only do investments on a part-time basis, which means they don’t know a whole lot. They might think they’re doing well when they get somebody in an expensive mutual fund or a segregated fund with principal protection without realizing the fees really kill returns.
The thing World Financial Group (and Primerica) haters downplay is just about every full-service financial services company is out to rip off their clients. The bigger ones just do it with a little more professionalism than the ones filled with part-time agents. Some people should be in segregated funds. Many other people are in them because an insurance salesman saw them coming.
The big risk in investing with World Financial Group isn’t the agent leaving town with all of your money. Sure, that happens, but not terribly often. The risk is being invested in high-fee funds and insurance products. When it comes to that, I’d rank WFG as only slightly worse than other financial services companies.
It’s funny. If a bank were to have told my reader to borrow $50,000 and put it into RRSPs, people wouldn’t really bat an eye. Banks lend money. It’s not a big deal. But when a WFG agent does the same thing, people don’t like it, even if there is a pretty legit case for
borrowing to invest.
The bottom line is this. Overall, you probably shouldn’t invest with World Financial Group. Fees are too high on their products. But at the same time, they’re probably not a whole lot worse than some of their direct competitors. Each is out to collect as many fees as possible from you. Helping you with your finances is a secondary goal at best.
Ya, that sucks for everyone. Unfortunately, there is a certain brainwashing component to the strategy of MLM companies like WFG, Amway, Quixtar...ewww..., etc. As for getting your friend back, it's going to be tough. I'm sure WFG has bombarded him with informational videos and inspirational cds to guaruntee his success. Well, the truth is that the people who make money are the ones selling the "success tools".
For example, Joe makes an MLM company. 10 people want in so they buy the tools, which practically tell you nothing, and they start there businesses. Joe makes 200 dollars off each of these shmucks, for a total of $2000. Joe then tells each of his pawns to recruit more members, telling them that the business is "expanding" and they need new hires. LOL. Moving on, each pawn recruits 10 guys, for a total of 100 new hires. 80 buy the tapes and videos, putting another $16,000 in Joe's pocket. 20 are in tune with reality and say, "no way that's a scam, I can make this business work without the tapes". Now, in actuality, it doesn't matter if you bought the tapes or not, these "businesses" do not work." What I've found in my research is that you get some sort of a high from having them which makes them hard to let go of. Think about it. When would you see a WFG commercial. Probably 4am after a long night of cigarretes and cold pizza. Perfect target for last resort, run out the bank account business ventures. These people love the feeling of "owning their own business" at first. Ya know, handing out business cards, using a Bluetooth device lol, etc. By the time they realize they are being scammed, it's a little too embarassing to come out. I mean, WFG even requires you to PAY $200 DOLLARS TO JOIN THE COMPANY, CLAIMING THE FEE IS FOR A BACKGROUND CHECK. Well, it's good to know that your friend isn't working with a group of criminals. Well, maybe they're just white-collar criminals.
Bear with me here, I know I'm ranting.
It's like, one day the guy's wearing his Hickey Freeman suit walking down the street, scrolling though his contact list on his Blackberry, the next day he's putting on a Def Leppard t-shirt to go work a shift at TJ-Maxx. It's not exactly an easy transition for someone whose been exposed to the guarunteed success of these MLM companies. So they keep up the act, and keep hoping that it will work, looking for change in the sofa to afford the next month's edition of inspirational DVDs.
It's funny, becuase Aegon(owners of WFG), Quixtar, Amway, etc. are businesses, they release annual reports. They actually divulged the information that the average "independent business owner" made a whopping $1,400 dollars. Granted it was in the 4point Times New Roman font at the waaaay bottom of the page, but oh, it was there. Now clearly, to regular Joes like you and I, $1400 a year is beyond our wildest dreams money. Or wait, no, it's about 15,000 under poverty. LOL. That's not good.
Anyway, I think I've said what needs to be said. As for your friend, I really don't know how to help you other than to try to hit him on the head with a blunt object, hoping that he won't remember anything about WFG when he regains consciousness. Maybe have him watch the Dateline episode on Quixtar. It can be found on YouTube.
On the bright side, if you make $1400 your first year, you could liquidate any remaining bank accounts and possibly lease a Rolls Royce like the one in the WFG commercials for, well, about a month.
Read more: http://www.city-data.com/forum/business/121020-wfg-pyramid-scheme-cult-legit-business.html#ixzz4rqwWZJ1T
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