Total Financial Group; Any Info?

[nwiproducer]

I recently heard about the classic 105 plan from Total Financial Group, I was wondering if anyone here has any 1st hand experience with them and this program?

I had posted this in the Employee Benefit forum with little response so I thought I might try here.

 

[smokin goose]

I recently heard about the classic 105 plan from Total Financial Group, I was wondering if anyone here has any 1st hand experience with them and this program? I had posted this in the Employee Benefit forum with little response so I thought I might try here.

Are you looking for justification to screw folks over?

 

[nwiproducer]

Absolutely NOT, quite the opposite, I'm looking for justification for my decision NOT to. I work with a business consulting agency that saves companies money through different areas of tax savings mostly manufacturing and construction incentives. I have been approached to bring this service to them. Being a licensed insurance agent which most of my partners are not, something just doesn't feel right with the program and I am seeing if my instincts are correct.
Thanks for your input it is appreciated.

 

[smokin goose]

Absolutely NOT, quite the opposite, I'm looking for justification for my decision NOT to. I work with a business consulting agency that saves companies money through different areas of tax savings mostly manufacturing and construction incentives. I have been approached to bring this service to them. Being a licensed insurance agent which most of my partners are not, something just doesn't feel right with the program and I am seeing if my instincts are correct. Thanks for your input it is appreciated.

Your instincts are right.

I don't know how much you dug into this, but I studied it for several weeks.

The employee contributes around 1200 pretax dollars a month to the TPA for the health reimbursement plan. The TPA in turn gives the employee a non taxable weekly loan which is secured with a credit life policy on the employee.

Let's say for example the employee brings home an additional $75 per week because of the tax savings. Now the agent sells them a $50? GI life policy (or whatever product(s) they're selling) through payroll deduction.

The employee still brings home more money. The employer saves a bundle on FICA taxes. On a 100 life group, the agent walks away with enough commission to buy a new sports car.

Sound shady? It does to me.

 

[senior-advisor-indiana]

Your instincts are right.

I don't know how much you dug into this, but I studied it for several weeks.

The employee contributes around 1200 pretax dollars a month to the TPA for the health reimbursement plan. The TPA in turn gives the employee a non taxable weekly loan which is secured with a credit life policy on the employee.

Let's say for example the employee brings home an additional $75 per week because of the tax savings. Now the agent sells them a $50? GI life policy (or whatever product(s) they're selling) through payroll deduction.

The employee still brings home more money. The employer saves a bundle on FICA taxes. On a 100 life group, the agent walks away with enough commission to buy a new sports car.

Sound shady? It does to me.

How do I get contracted?

 

[smokin goose]

How do I get contracted?

Ha! Do you think Rick would visit you in jail?

 

[bwm57]

SG;
I'm not looking to participate with this company, in fact they approached one of my clients recently who asked me to look into the "classic 105" plan.
From what I have read they are issuing these monthly loans with some vague promise that the loans are guaranteed by a credit life policy. In the example I saw they were taking $1,400 per month and distributing a $1,000 "loan" back to the employee. I'm not sure where the other $400 per month was going, maybe into their fees. The part that I am most suspicious of is this credit life component, they state these policies need to be kept in force for the employees lifetime, paid by who, paid to who, what happens when the employee leaves the company, I don't know.
Do you know anything about this part of their plan?

 

[JNsurance]

We did a thorough scrub of The Total Financial Group's Classic 105 Plan. Here are our conclusions:

1. First, The legal opinion letter they have is from a reputable law firm, Ogletree Deakins. The problem with their letter is the fact that Ogletree does not opine on the entire arrangement, only on the basics of a standard 105 plan. There is no mention of any loans to employees and no analysis of the claimed repayment for employee loans via the alleged "group life insurance". In short, the Ogletree letter basically restates the code as it pertains to a generic 105 arrangement and nothing more. It certainly would not provide any legal protection to their customers as they would need their own opinion letter, and one at least in our law firms opinion, that analyzed the entire arrangement not just generalities of code section 105.

2. The claimed "loan" repayment with "group life insurance" is actuarially unsound and is not supportable with fact. Go look at the rates yourself and calculate the cost to keep even the most economical group term life insurance in force until life expectancy. This aspect, in and of itself should be evidence enough to avoid this program. Not to mention the fact that there's no evidence of an insurance company application for insurance, only an incompetently prepared TFG "form",which may in and of itself constitute insurance fraud. ( I'm using the term "form" generously as the "form" is entirely out of order and would certainly not meet NAIC compliance standards).

3. TTFG passes out copy of another legal opinion letter, apparently obtained by an existing Total Financial Group client. It's from an insignificant lawyer who specializes in estate planning, but he does address the "loan" and the legal basis for a loan. To his credit he wisely makes the disclaimer that it is only assumed there is a loan. If TTFG actually has a solvent program, why don't they have legal option from a reputable and significant law firm, who specializes in employee benefits law, willing to opine on the entire arrangement?

4. Total Financial, and specifically Joe Borino and Roth Robertson, Total Financial's National Sales Directors, have made all kinds of unsupportable and contradictory claims about, but not limited to the alleged loans, the legal basis of the entire arrangement, and the number of companies actually enrolled in their Classic 105 plan. If you press Joe Borino for factual proof, he responds with anger and hostility rather than providing substance in fact. If you press Roth Robertson, he says "talk to Joe".


5. TTFG makes the claim that a Hedge Fund is the lending source for the capital used to make the employee loans, but there is no evidence of this claim, and significant evidence clearly confirms this claim is not fact(one example of many available is the ridiculous loan protocol). Joe Borino and Roth Robertson additionally made the claim that Wells Fargo was considering coming on board to provide loans but again, these statements were void of any verifiable documentation or other proof. We additionally contacted a Wells Fargo executive we've worked with for over 20 years, who is in a senior executive management position, to varify the authenticity of TTFG's claims. I'm sure you can imagine what he said after looking into it...entirely unfounded. Additionally, if legitimate loans to individuals/employees were actually taking place, a real lender would secure funds with the borrower, and would not advance them directly to TTFG as claimed. what in fact is actually happening is this: TTFG has the employer withhold the cost of the "Certificate" from the employee's pay, and rather than having the employer send employee "Certificate" monies to TTFG, they re-enter it, as a "loan", minus substantial fees, which are sent back to TTFG. The "loan" is then put back onto the employees pay statement and paycheck! This is supposedly done "as a convenience". I hope you're smart enough to figure out what's really happening here folks...

6. Do the math yourself and take the claimed number of customers, which was stated as "several hundred companies", and add up all of the employee loans(we are talking about approximately 12-20k, per employee, per year). The number becomes rediculous. I can't imagine any organization, most especially a hedge fund, who would loan millions and millions of dollars to Diamond Financial LLC, an LLC apparently owned by Denis Joachim's wife, Donna Pounds Joachim, rather than directly to the borrower. Wake up people. There's no viable security for a lender in this deal! And smart money isn't this stupid and therefore we have additional confirmation of likely fraud. BTW, hopefully you're not this stupid either!

We could go on and on with additional evidence confirming our decision to run from this nightmare in waiting but don't take my word for it. If you do your own homework, and not just except their lies as fact, and you have a moniker of intelligence, you'll come to the same conclusion. SCAM! Don't put your clients in harms way for the sake of satisfying your own greed, let alone TTFG's. This whole affair will ultimately lead to substantial legal, tax, and financial hardship for businesses foolish enough to adopt this program. It won't take long after that for you to be served with litigation and even worse, potential fraud charges.

Finally, A simple review of their website should be meaningful confirmation of the lunicy. I can't imagine ANY solvent company, run by educated professionals who would knowingly display such illiteracy and incompetence.

So there you have it... you now know why we call it the Total Financial Group Classic 105 Scam.

 

[HHI6]

Thanks, I was approached by an agent today using them. It sounded too good to be true. I reckon it is!

 

[Hbeck]

Wow, everything is a scam if you don't understand it, or sell a product that competes with it I guess. I've been approached to sell the Classic 105 and do understand how it works. I chose not to simply because it's not an easy product to sell. I do know it has been fully vetted by the IRS and the DOL, and regardless of what you read above there is nothing illegal about this program....