GTBK Marketing/Stellar Marketing

[PaulR]

Has anyone heard of this outfit or worked with them?

I guess I can't post the url but it's www dot mega-producers dot com.

I received two versions of their pitch; one a cheap scripted post card and the other a glossy picture postcard with a good looking model sitting on a desk.



Thank you.

 

[Paradigm]

Has anyone heard of this outfit or worked with them?

I guess I can't post the url but it's www dot mega-producers dot com.

I received two versions of their pitch; one a cheap scripted post card and the other a glossy picture postcard with a good looking model sitting on a desk.



Thank you.

It's not cheap, but like any method it will work if you do.

 

[NPCOACH]

I actually know one of the guys that he used as a testimony in his early advertising. That agent was semi retired and never used his system. After that, it was hard to take any of his hype seriously.

That doesn't mean his system is bad or does not work - it just means that, to me, his marketing to agents is deceptive.

 

[Josh Winter]

Some how I got on their mailing lists and that guy sends me tons of stuff on how to make all these money, I think his name is Dennis Tubbergun. He sends flyers out with his 500k commission checks and all this hype about how you can be doing the samething.

 

[Doug Delaney]

Notwithstanding representations to the contrary, the plan promoted by Tubbergen as the Immediate LegacyTM was actually invented by me, Doug Delaney, and is commonly known as CHIRA TM. Various legal articles have been published to this effect and governmental approvals received based on the parameters of CHIRA TM.

I received the PLR 200741016 from the IRS; have a patent pending since 2005, received approval from NY DOI as well as SC AG and DOI. We have several insurers who have approved the use of their product. Our website has this and additional information. CHIRA Financial Services, LLC/CHIRA USA, LLC.

As implied in the NY DOI correspondence which is publicly available on the internet, life / annuity arbitrage schemes will be actively pursued as they do not generate sufficient funds for charity. Our firm has 3 active law partners and 2 internal lawyers to protect the intellectual property and the proper message. The CHIRA TM plan is good for donors, charities, taxpayers, the insurance industry and agents where it is implemented correctly and with appropriate attention to detail. We welcome ethical and prudent agents to review our site.

 

[Financialguy]

No one has posted the "strategy" that GTBK is using. No one has explained in detail what it is they are doing. Delaney says it is wrong or fails the ethics etc, but even he doesn't say what they are doing.

1. How does the strategy work?
2. How does this strategy cost nothing to the donor?
3. What does it provide to the charity? they claim it provides CASH TODAY but no one is explaining this, where its coming from, the draw on the customers assets
4. People have claimed that GTBK is using bank products or some kind of premium financing with this, but none have explained what or how or cost or process or procedure, nothing.
5. People have claimed that GTBK is using "arbitrage" in this, and insurance agents say those fancy words only to make themselves sound like they know something. Usually arbitrage to an insurance agent is just taking one asset and cashing it in to invest in a higher yielding one, or taking a loan from some source to HOPEFULLY recieve a better yield than the cost. What REAL arbitrage is being used here? this is not explained at all. It is not even explained what 'considered arbitrage' is being used here.
6. What products are being used here and how? what features do they have? what providers are being used? again nothing said.

Can anyone answer these most basic of questions which have been asked over and over yet have not been answered here at all?

Thank you.

 

[Mr. Bill]

Interesting 2nd post.

Oddly, looks like the 1st post.

Otherwise, mybad.

 

[Doug Delaney]

I have neither enrolled nor participated in a GTBK seminar but am aware of their marketing information. So, I share this only through gleaning what I read in their materials. ​

The plan GTBK appears to offer has morphed over time and is now a plan largely funded with after-tax dollars (as opposed to pre-tax IRA investments as in CHIRA®). Their "boot camps" appear to offer planning similar to charitable life / annuity arbitrage similar to those rejected by the New York Department of Insurance (I can't yet post the URLs on this forum but google "New York Insurable Interest 200741016") combined with something similar to the listed transaction in IRS notice 2004-30 (using a form of flowthrough entity such as an LLC or LP) and discussed more fully in AALU Bulletin No. 04-50 (which you can google).​

Their plan, which is nothing new, appears to involve a loan from donor/insured from after-tax funds to a minimially capitalized LLC/LP. The loan proceed are used to fund an insurance policy collaterally assigned back to the donor (not their IRA) in repayment of the loan. Donor then transfers equity ownership of the LLC/LP to charity claiming an arguably unsustainable deduction. The numbers are pretty convoluted on these deals, especially when adding in the life/annuity arbitrage. ​

Donors should be very cautious about plans that tout deductions "without cost." Economic impoverishment of the donor is a benchmark of whether an item is deductible. Substance over form is the wide net used by the IRS in these cases, especially where the marketing materials (which are certainly discoverable) say there is "no cost". Wow! In these type of plans, the deduction presumably comes not through a gift of cash but a hard to value LLC membership interest. As a listed transaction means the parties must disclose it fully to the Service. So, what seems like a good thing in today, comes to light on April 15.​

I am not necessarily stating that life / annuity arbitrage is a bad thing, just that it potentially compromises insurable interest if used at the wrong time (contemporaneously with the closing with the policy), with the wrong parties (charities) or without full representation to insurers. Regardless of one's stance of whether life / annuity arbitrage is appropriate, the use of flowthrough entities itself is fraught with complexity. Consider management and reporting issues which can certainly grow tiresome to the most well inclined donor or agent. Most prudent charities will run from these types of plans as they often see their tax exempt status as the compromised umbrella under which these "high commission" deals operate. In all events, though, the plan offered by GTBK is not a true "pre-tax" plan as is the novel CHIRA® plan. It truly is something new.​

CHIRA® is structured to promote honest and lasting relationships between charity, donor and agent without pulling a fast one on taxpayers, donors, charities or insurers. I welcome you to read more about it on our websites ( chirausa and chirafinancialservices)​

I hope this helps. ​

 

[Financialguy]

This is what GTBK claims, on their website. (this is copy-pasted from dennis tubbergen's website)

"
"The Breakthrough Defined"

My breakthrough system does the following:

1. Creates an immediate donation to a charity at NO COST to the donor.
2. Creates an immediate tax deduction for the donor even though the donor has no cost in creating the charitable donation.

Let me make sure that you understand how powerful that this system really is.
A donor creates a donation to a charity using a combination of traditional insurance products. (This combination of tools and the sequence in which they're used is what makes this process patentable and why it's currently patent pending)
The selected charity gets an immediate cash donation from the donor.
The donor gets a current tax deduction for the amount of the cash donation.
The donor has no cost for creating the donation


------------


Now, first of all, GTBK is calling this "Instant Legacy TM" They are claiming this is trademarked. In fact, this is untrue. New york life actually already has this trademarked. Check the link below. At new york life this is a product, not a strategy. The only thing unique about this product is there is no medical, it is a one page underwrite, you are either approved via the questions or not, there id no med and no blood. I suspect GTBK is using this product for this strategy but this is uncomfirmed.
I can not post the link as it will not let me until I have posted 10 posts on this forum. Search for 'Instant legacy tm' on google.

Now, I have a couple theories for how they are doing 'their strategy' Again, no-one, not even Dan Delaney has mentioned how they are doing this, yet he says they are ripping off his chira plan somehow with their strategy that supposedly doesn't work. What strategy this is in detail Dan Delaney is not saying unfortunately.


I can not yet see how they are achieving all these 3 items but of course they have come up with something. Here are the benefits they say it has.

1. No cost to the donor
2. Immediate deduction to the donor in the amount of the cash donation.
3. Charity gets an immediate cash donation


Point 1. "no cost to the donor"
Where does this no cost money come from?
A - a loan (Dan delaney suggests premium financing, in which case has a high ongoing interest cost, for $200,000, would be like another mortgage in fact, into the thousands a month.) Unless the charity funded this, in which case say goodbye to the charities cash/up front donation.
B - An existing IRA withdrawl (assuming the customer has one, or has one with hundreds of thousands of dollars in it, good luck today, and especially in this market, so were looking at a mere 20% of seniors aged 59.5+) In this case there is also a cost, the cost is that they can no longer use that IRA money if they need it. I am willing to however accept that as a 'viable no cost statement'. There is also the penalty interest cost of 10% unless you are 59.5 (which if they are saying over 59.5 is what they are talking about the client being, which I guess is also acceptable although misleading as it eliminates truth for 70% of americans, those under 59.5)
- if you withdraw, it eliminates your deduction as well, as you need to use the deduction to offset the tax bill you will recieve for the IRA withdrawl. I am guessing this is not the way they are suggesting this strategy works due to this.

C - If they were able to get a loan from the IRA somehow, and not a withdrawl, In this case, interest on the loan would be payable, which makes it cost money for the donor, unless they are having the charity pay for the loan. (but then, where is the cash payment to the charity? If it is all in a life policy or spia, there is no cash, and no benefit to the charity at all, especially if the entire policy is used up to pay for the return of the IRA funds.



Now, C would not apply IF they were using a loan (from IRA or premium financing) to fund a life policy directly (or buy spia - fund life) and out of say a $100,000 loan, they used $50,000 to fund the life policy, and the charity held $30,000 to pay for the loan payments, and kept about $20,000 in cash as the usable monies for the charity. (amounts are an example, and I have seen the chira strategy marketed this way, which Dan Delaney is saying is being plagiarized. However, Chira does not involve a loan and worrying about payments.) This strategy as well, would pass the IRS requirements, although it is rather an unsuitable move as the $30,000 would have to last to pay the payments on the loan. $100,000 on 30 year loan at 6% = $600 a month, $7200 a year, eats up that $30,000 in a mere 4.5 years. On interest only it eats it up in 5 years only. I do not see how preium financing or a loan is a viable option here, and as far as I am aware, there are no interest free loan options on an IRA without triggering a taxable event. (unless they have a product they can transfer the IRA to, and withdraw free of tax or penalties, or loan against free of interest, highly unlikely.


This would in effect provide a cost to the donor, tax deduction, and immediate donation to the charity. The cost to the donor is the real issue here, it is easy to create a donation to a charity and create an immediate tax deduction as we all know. take 100k, give it to the charity, the charity buys a (spia-life) or a life policy for 50,000, and keeps the rest for reserve and keeps say 10,000 to 20,000 in immediate cash. How you come up with the 100,000 is the issue. Also, how is GTBK doing the life policy? Does the customer buy it and then donate it? Do they buy the (spia-life) and then donate those? Do they donate the funds to the charity first and then the charity buys the (spia-life) or life pol.?


Another question to be asked, if they are buying spia-life is, are they using a 7-pay on this spia? 7 years to pay out.


The biggest question is in my mind, where the hell is the customer getting the no cost money, any loan costs money to the donor and can not possibly be serviced by the remaining funds/usable funds.


Arbitrage: now, concerning arbitrage and how it might be used here, arbitrage would be taking a loan for 100,000 at 6% interest, and then investing it at a higher rate, say 7%. This 1% could be left for charity to use as cash for example. This is speculative to say the least and will not be achieved in any fixed products in the USA as deposit rates are always lower than lending rates. Thus if any arbitrage is used, it will fail, or create a draw on the assets, which will ultimately fail. If any true arbitrage is being used here, it is a failing concept, that can only work when deposit rates or investment rates are securely and dependably factually paying a higher rate than the loan rate, which in this market is impossible, and I have been a long time bullish type on stocks.


I have heard they are using a no-lapse product here, which creates possibilities in my mind that they could possibly achieve a positive arbitrage with an indexed product guaranteeing a gmib at over the loan cost, but this is highly unlikely, and that is even investing the full 100,000, which would leave no immediate benefit to the charity. They are likely using a no lapse product as it generates the highest commissions, and would be a lock guarantee for the customer as a sales pitch, suitability move.


So, the jury is out on how they are achieving this, and I can not yet figure it out. I am one of the best technical strategists in north america, and have other strategies that trump this one, although their claims on this one I can not yet figure out. Charging agents $3500 a month, or $2000 up front for a teaser seminar, and $10,000 for a seminar of any kind, is in my opinion, fraudulent towards agents, therefore I will not participate to find out.


To pay $12,000 and $3,500 a month to be a captive agent splitting commissions with no guaranteed appointments and expected commissions, along with no guaranteed wages, is in my opinion fraud.

I only wish the regulators would do something to clean up this industry, and the real estate industry as well. There is nothing wrong with earning amazing commissions, but there is everything wrong with defrauding agents, and misleading advertising.


If anyone has any information on this strategy to fill in the blanks, please do.

 

[Financialguy]

Doug Delaney,

Sorry Doug, I mis-stook your name for Dan. So..DOUG it is.

Doug you said: (these 4 points were one continuous paragraph)
1. "appears to involve a loan from donor/insured from after-tax funds to a minimially capitalized LLC/LP. The loan proceed are used to fund an insurance policy collaterally assigned back to the donor (not their IRA) in repayment of the loan.
2. Donor then transfers equity ownership of the LLC/LP to charity claiming an arguably unsustainable deduction.
3. The numbers are pretty convoluted on these deals,
4. especially when adding in the life/annuity arbitrage."

I have a few questions for you.
For 1. = Why do you say loan? a loan is when you borrow, as in the money is paid back. Usually to a bank, and you have mentioned premium financing for this GTBK strategy before, but now don't. What if any banking methods/products/loans are they using, and if none, please say so, And, if none, an after tax loan is not a loan from an IRA, unless the IRA is cashed in/withdrawn. Are they cashing in the IRA? Are they taking a loan from a bank against the IRA? Are they using an IRA with a loan provision from somewhere? please explain.

For 1(a) = You say "minimally capitalized" LLC, how is 100,000 going into an LLC minimally capitalized? or maybe you are saying about 2,000 stays in the LLC and the other 98,000 goes into the policy. Why are they using an LLC? are they touting any benefit? I don't see one here as no flow through is needed for anything to get privacy nor deduction here. If an LLC is used it would certainly come with large cost ($2500-$7000) typically for a "Marketer sold" LLC as they always run up the bill vs. an honest legal firm/paralegal. who will do an LLC or incorp for a few hundred.

For 2 = you say "arguably unsustainable deduction" what would make it unsustainable? a donation to charity where they recieve legal monetary interest is a legitimate tax deduction, period. If they recieve monetary gain, it is deductible, whether in cash today or cash tomorrow. This is regardless of where the said funds come from, bank financing, cash, an IRA, LLC worth 5 grand, whatever, doesn't matter. I'm having a hard time with your argument here unless the charity is not recieving monetary benefit. An actual monetary benefit would be allowed, the only possible argument is whether there was a monetary benefit or not, as in something "valued for consideration" and not a cashable policy or cash etc.

3. You say the numbers are convoluted on these deals......What numbers??? you haven't given any. Please go into as much vast gory detail as you can. And what is convoluted about them?

4. You keep saying, "life/annuity" arbitrage. Please define this. This can mean different things to different people. Not only that, but there is no such thing. You will achieve NO possible arbitrage between a life policy and an annuity either way you go, so what are you talking about?? This word "arbitrage" is widely misused by *** advisors who have no idea what they are talking about or even what the word means or the strategy arbitrage they are trying to plagiarize actually is. The customer doesnt know it, so the advisor says it just to sound smart. You also can not achieve arbitrage by borrowing to invest in an annuity or life policy, as neither pay a return great enough to cover the product cost + interest cost of the loan. If you think this is true or if they are trying to sell this, please indicate so, and how so.