If you’re looking to become your own boss and earn as much as $60K in your first year, then I have the perfect business opportunity for you.
This opportunity involves no door-to-door or high-pressure sales tactics or cold calls. You can also keep your current job, earning up to $5K per month for part-time work that you do in your spare time.
Have I piqued your interest yet- or your skepticism?
Welcome to the convoluted world of MLM financial services
Welcome to the world of multi-level marketing (MLM) financial services, as operated by groups like the Transamerica Financial Group Division, World Financial Group (owned by AEGON) and Primerica. Some of these groups are spin-offs of their business “parents” (e.g., Transamerica) and thus carry their prestigious names; however, their business models are completely different.
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To begin with, the financial advisors, or agents, in these groups do not earn a salary. Instead, the agents affiliated with these groups operate their own individual businesses and sell products such as insurance policies, mutual funds, credit monitoring, retirement and college savings plans, etc. They also recruit and train other financial advisors- or in MLM parlance, “grow their downline.”
Growing a downline is a critical part of the MLM business model because it is via new distributors, or recruits, that agents make a good portion of their income. The commissions that are made by distributors are “kicked” up to their recruiters, who in turn kick up a portion to their own recruiters. Thus, those agents sitting at the very top of this, dare I say, pyramid earn the most money via their downlines. Meanwhile, most distributors make just a small commission and do a majority of the client-chasing.
Are Trasamerica, WFG and Primerica a scam?
Many skeptics define all MLM business models to be pyramid schemes and therefore a scam. And most MLM-based operations do ignite the ire of the law, as noted by the example of the business A.L. Williams (which inevitably became Primerica). However, although the MLM business model does raise legal suspicions, it is not technically a scam or illegal.
Having said that, there are numerous examples where false promises are made to would-be distributors that MLM financial services is a job or can guarantee someone a given income per month or year. Here is an example of what one would-be Primerica distributor was told during her in-person “job interview”. Keep in mind that this person is a research scientist by training, not a manager or someone with a business degree. She was contacted by Primerica because her resume was posted online.
I am continuing to the third stage of interviewing with PRIMERICA. They are looking for an experienced trainer/teacher who is willing to teach middle class people how to manage their finances. If it is true that I can earn $60,000/year as a beginner, I will take it. They are also looking for office managers. They earn $300,000/year.
Promising a steady, yearly income for what is in essence a commission-only sales position is misleading at best, and outright lying at worst. However, many more such accounts exist from other job-seekers:
I was contacted by this company Tuesday 6/8/2010 by a Mr. Scott Eaton who said he saw my resume on Yahoo hot jobs. He said he wanted me to come in for an interview for a Supervisor position available and that there would be no sales involved. I have an appointment scheduled at their Brea office this Friday 6/11/2010.
As an “associate” I [was told I] would not be seeking out clientele, but rather they would be referred to me…leading me to believe that the job consists of me kicking back in an office where clients come to me for financial advice because they are “referred” while making a fat commission to the tune of $5,000 and up per month on a part-time basis.
They find your information from your resume posted online. Then they will call you for the interview and will tell the lie that they have [a] position available in whatever trade/profession you are looking [for]. Once you setup the interview…you receive a call and…will be talking to one of their financial advisers or his peer.
“We don’t need no education”
Given that many recruits don’t have the needed expertise and/or work experience to be financial advisors, do they at least receive training? Why yes- according to this published comment on Yelp, agents can get an entire two weeks of training, which should qualify them for managing hundreds of thousands, if not millions, of dollars:
I have absolutely zero background in finance. How am I supposed to help people make very important financial decisions and guide their financial futures with zero experience? They justify this by complying with laws and making you acquire what is called a “life license” that basically takes 2 weeks to get.
Personally, if I were a client, I would want a financial advisor that had more expertise and years of experience to understand the complexities and changes of the financial world and guide me in the right direction rather than some novice with no prior financial background and no education and very little training handling my money!
Several pro-Transamerica, WFG and Primerica agents have argued that, as a business owner, it is up to the individual financial advisor to take courses (often offered at a discount through the MLM business) and get up-to-speed on financial topics before taking on clients. However, there is no requirement set for such training, and all the costs of the training are fronted by the financial advisor.
The vapid inexperience of a majority of such “financial advisors” leads to major calamities, such as an Arizona court case that resulted in a $2 million judgement against World Marketing Alliance (now WFG). Likewise, Primerica ran afoul of the SEC for failing to supervise its agents, some of who “sold unregistered securities in a Ponzi scheme, [after which] all of the monies raised from investors was lost.”
In other words, if you’re a client with an MLM-based financial advisor, be very wary of what’s happening with your money.
I will be happy to
take invest your money
Would you trust me to look at your bank accounts and invest your money for you? Why not? Could it be because I have zilch in terms of business education, no finance degree to my name, and my only trading experience comes from managing my own piddly stock portfolio? Yeah, I thought so too. And that’s why I’m not vying to become your financial advisor.
Now, as to why the above mentioned MLM businesses assume that other non-business folks can be turned into financial advisors that clients will entrust with their money is beyond me. However, if you do take this route, know that about 85% of such financial advisors do eventually close up shop because of failure to generate a commission.
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