WFG or Primerica? What better options are there?

[webestrian]

Hi guys,

So I am kinda new to this thing and have read lot about WFG and Primerica on internet. I am a finance guy, have my CPA, got the LLQP license too, but still deciding on the company to pursue with.

Principally, I like the MLM model of both these companies. The reason being these models allow you to establish your own business/agency
BUT I don't like the bad reputation associated with these companies.

The reason of bad reputation I think is due to reasons like :
- You are forced to recruit people
- People who have zero knowledge about finance products call them financial advisors, and ultimately end up giving crap financial advice.

So I am looking for an option,
- which offers the option to build your own agency by recruiting people under you, but the recruitment should be an optional thing,
- company has a well established mechanism for adding /screening educated people and
- doesn't have a bad reputation in market like WFG or Primerica. Something you can proudly mention to others!

Please note that I am already doing a full time job and want to start this as a part time thing & I am in Canada.

Looking forward to guidance .

Thanks!

 

[DHK]

Principally, I like the MLM model of both these companies. The reason being these models allow you to establish your own business/agency
BUT I don't like the bad reputation associated with these companies.

These companies use that term, but it's not what they really mean. They talk about it that way because they want you to recruit others.

Any independent agent essentially is an agency of one - themselves. There are MANY agents that contract independently with many other companies to offer their products without being in the MLM model (and get up to 3-4x the compensation too).

The reason of bad reputation I think is due to reasons like :
- You are forced to recruit people
- People who have zero knowledge about finance products call them financial advisors, and ultimately end up giving crap financial advice.

"Birds of a feather" come to mind. Do you want to build THEIR brand... or your own?

So I am looking for an option,
- which offers the option to build your own agency by recruiting people under you, but the recruitment should be an optional thing,
- company has a well established mechanism for adding /screening educated people and
- doesn't have a bad reputation in market like WFG or Primerica. Something you can proudly mention to others!

Just about any independent contracting option will give you all of that and help you build your own brand, such as "Webestrian Insurance Services" or whatever name that is allowed in your jurisdiction.

As far as "adding / screening educated people"... um... good luck with that. Unless you're looking to work with an established captive agency, I wouldn't count much on that.

 

[webestrian]

@DHK thanks a lot for the prompt response.

Ok so as an independent agent I'll have to contact different insurance companies & sign respective contract with them?

Another thing i see going with wfg or primerica is, you get instant access to loads of products. A guy sent me list of products one can offer after joining wfg and the list is huge, like 220+ products. We can even refer for mortgages, debt consolidation and lot other stuff .

So how does that go if working as an independent agent?

Also regarding making a team, so if i am working as an independent contractor, i can still recruit others under me for a portion of commission? Are there any legal implications?

Thanks

 

[DHK]

@DHK thanks a lot for the prompt response.

Ok so as an independent agent I'll have to contact different insurance companies & sign respective contract with them?

Yes.

Another thing i see going with wfg or primerica is, you get instant access to loads of products. A guy sent me list of products one can offer after joining wfg and the list is huge, like 220+ products. We can even refer for mortgages, debt consolidation and lot other stuff .

So how does that go if working as an independent agent?

First, that list isn't really that large. Many mutual funds have 4-5 different ticker symbols each depending on cost/fee structure, so I'm sure that adds quite a bit of bloat.

The most successful method is to get to know:
1) WHO you plan to work with to help them solve problems through your products
2) WHICH companies have the right combination of products to fit those strategies.
3) Keep yourself limited to no more than 2-3 companies at a time... unless there's an underwriting issue and then you branch out for that consideration.

Specialize in your favorite products and refer out the rest.



There are three phases to this business, and right now, you're deep in phase 1:
1) Wide-eyed enthusiasm: you see everything you "can" do. Trust services, investments, retirement plans, charitable planning, business planning... it's overwhelming.

2) Complicated sophistication: this is trying to figure out how to make the business work for you, getting education, designations, computerizations, etc. Lots of wasted activity here, but it seems a necessary step for success.

3) Mature simplicity: You know who you are, what you do best, and you market to your profile and process to maximize your results. You want to get HERE quickly and get through stage 1-2 quickly.

Also regarding making a team, so if i am working as an independent contractor, i can still recruit others under me for a portion of commission? Are there any legal implications?

Thanks

Yes, you should be able to recruit others for a contract that pays out less than yours does. You simply keep the difference.

Legal: If the agents you recruit end up selling a lot of business that goes bad, the amount of overrides you earned would be charged-back to the insurance company. That's normal, but you might want to have formed an LLC or Corporation for your insurance business so they can't go after your personal assets, should it be substantial.

For other posters who ask about incorporating or LLCs - you don't get ANY liability protection for your own acts. But it may be helpful in the event of a disgruntled employee/assistant or downline agents do something stupid.

Of course, I'm not an attorney and this isn't legal advice. Obviously, as a CPA, you should be familiar enough with legal entities and their taxation to figure out which might make the most sense for you in your situation.

 

[Mike007]

If you understand and like MLM structure, there is nothing wrong with joining either. Based on products alone, if I was to join between the two options, I would go with WFG. I went to their meeting and presentation about 2 years ago as a favor to my cousin and I'm okay with their presentation, at least the local office in CA. But I'm already in the industry so I didn't find any good reason to join WFG.

This industry is very tough no matter who you go with. It's no cake wake. 3 of my cousins joined about 3 years ago and they are very successful now with WFG. So there are success stories there. It's just not all made up.

Just understand that WFG starts their commission very low and they don't have the world's best training. These are the two biggest issues with MLM companies. Lack of knowledge due to poor training, and very low commissions.

Due to low commissions, you are at a very deep disadvantage if you do not recruit and build an agency. Having a large agency is the bread and butter of MLM companies like Primerica and WFG.

Can you join other insurance organizations besides Primerica and WFG? Yes, you can. Many of them will offer you much higher commissions. You'll have to do your research to find which insurance companies do business in Canada.

Insurance organizations are called IMO. But many of them do not offer you a Multi-Level Pay structure. The pay structure is up to you to create or use. Most common is a pay between the Agency Owner and the Producer. Agency Owner can recruit and bring in new agents/producers but the producers often times will never recruit, just a salesperson until he/she wishes to leave your agency and start their own agency.

You can start your very own MLM insurance agency as long as you have the money to buy and run a MLM commission software to create Mutli-Level pay.

But to run and own your own insurance agency is years down the line due to lack of experience if you decide to go out on your own. With MLM companies like WFG, in theory, you can build it quicker do to a system is already in place.

BIGGEST ISSUE I have with MLM companies is that their sales managers will suck you dry of all your warm markets and throw you away if you end up picking the wrong mentor/upline. Do not give away all your warm markets and find someone you can truly trust.

 

[toolbelt]

Can you survive selling 2 1/2 or less, small face value term policies annually (not including terminations, and possibly including the policy you may have bought when joining)? Bear in mind you may also be paying a monthly online access fee, marketing/training materials, and paying for seminars, conferences and conventions.....on top of your actual selling expenses.

 

[webestrian]

Yes.



First, that list isn't really that large. Many mutual funds have 4-5 different ticker symbols each depending on cost/fee structure, so I'm sure that adds quite a bit of bloat.

Thanks a lot for the response. But I would disagree a little here and share the list of providers here :


1 4 PILLARS
2 AGF FUNDS INC
3 ALLIANZ TRAVEL INSURANCE
4 AON P & C REFERRAL
5 BERKLEY TRAVEL INSURANCE
6 BMO GLOBAL ASSET MANAGEMENT
7 BMO RETAIL LENDING REFERRAL
8 BMO SEG FUND
9 C.I. MUTUAL FUND
10 CANADA PROTECTION PLAN
11 DYNAMIC MUTUAL FUNDS
12 Empire Life insurance company
13 EQUITABLE LIFE OF CANADA
14 EVEREST
15 FIDELITY INVMT CANADA LIMITED
16 FINEVO LENDING GROUP
17 FORESTERS FINANCIAL
18 FORESTERS LIFE INSURANCE COMPANY CANADA
19 HERITAGE EDUCATION FUND, INC.
20 IA CLARINGTON
21 IA CLARINGTON INVESTMENTS
22 IA EXCELLENCE
23 INDUSTRIAL ALLIANCE INS. AND FIN. SERV INC.
24 INVESCO (FKA AIM)
25 IVARI
26 LA CAPITALE
27 LEGACY SHIELD
28 MACKENZIE FINANCIAL CORP
29 MANULIFE
30 NORTHWEST MUTUAL FUNDS
31 OPTIMUM
32 RBC INSURANCE - NFIA
33 SIRIUS BENEFIT PLANS
34 SSQ FINANCIAL GROUP - INVESTMENT & RETIREMENT
35 TD ASSET MGMT, INC (TDB)
36 TEMPLETON MGMT LIMITED
37 YORKVILLE ASSET MANAGEMENT

So I think the list of providers who we can work with, is huge with WFG.

The product list is also quite comprehensive, as we have term life, whole life, universal life, Tax free saving accounts, RRSP, RESP, debt consolidation, mortgage and more.

So doing work as an independent contractor, would never be able to get connected with so many companies and so many options.

But still I have disagreements and problems with WFG, I already mentioned in my first post.

But thanks again for your detailed post, it was really helpful

 

[DHK]

Thanks a lot for the response. But I would disagree a little here and share the list of providers here :


1 4 PILLARS
2 AGF FUNDS INC
3 ALLIANZ TRAVEL INSURANCE
4 AON P & C REFERRAL
5 BERKLEY TRAVEL INSURANCE
6 BMO GLOBAL ASSET MANAGEMENT
7 BMO RETAIL LENDING REFERRAL
8 BMO SEG FUND
9 C.I. MUTUAL FUND
10 CANADA PROTECTION PLAN
11 DYNAMIC MUTUAL FUNDS
12 Empire Life insurance company
13 EQUITABLE LIFE OF CANADA
14 EVEREST
15 FIDELITY INVMT CANADA LIMITED
16 FINEVO LENDING GROUP
17 FORESTERS FINANCIAL
18 FORESTERS LIFE INSURANCE COMPANY CANADA
19 HERITAGE EDUCATION FUND, INC.
20 IA CLARINGTON
21 IA CLARINGTON INVESTMENTS
22 IA EXCELLENCE
23 INDUSTRIAL ALLIANCE INS. AND FIN. SERV INC.
24 INVESCO (FKA AIM)
25 IVARI
26 LA CAPITALE
27 LEGACY SHIELD
28 MACKENZIE FINANCIAL CORP
29 MANULIFE
30 NORTHWEST MUTUAL FUNDS
31 OPTIMUM
32 RBC INSURANCE - NFIA
33 SIRIUS BENEFIT PLANS
34 SSQ FINANCIAL GROUP - INVESTMENT & RETIREMENT
35 TD ASSET MGMT, INC (TDB)
36 TEMPLETON MGMT LIMITED
37 YORKVILLE ASSET MANAGEMENT

So I think the list of providers who we can work with, is huge with WFG.

The product list is also quite comprehensive, as we have term life, whole life, universal life, Tax free saving accounts, RRSP, RESP, debt consolidation, mortgage and more.

So doing work as an independent contractor, would never be able to get connected with so many companies and so many options.

But still I have disagreements and problems with WFG, I already mentioned in my first post.

But thanks again for your detailed post, it was really helpful

Let me help you: back when I sold mutual funds, I sold for TWO companies - American Funds and Franklin Templeton. That was it. How else can you specialize and give quality advice until you pick something to learn and master it?

And of the American Funds, I primarily sold two: CAIBX and CWGIX; those are the A-share versions of those funds.

You start with one, then you compare various funds with other companies to determine THEIR strengths and how they could fit a client's portfolio growth or not.

Just because you have 100 different mutual funds... does NOT mean that you have to SELL them all. You're an ADVISOR... NOT a "product peddler". If you're going to take responsibility and make recommendations... you need to specialize and simplify. Sift, sort, and select. Then do the same thing with other mutual funds and insurance products. Have a baseline, then begin doing other comparisons. You won't be successful selling for 200 companies. It just won't happen.

There are some companies that are true specialists in what they do. Know when you'd want to consider them and keep them "on the back burner".

Simplify the job for yourself.

1. Know the ideal client profile you need for yourself.
2. Know what their needs are
3. Know how you can help solve those needs with selected products.

This may be helpful for you:


And this is my presentation on investment management I created over 3 years ago:

 

[webestrian]

If you understand and like MLM structure, there is nothing wrong with joining either. Based on products alone, if I was to join between the two options, I would go with WFG. I went to their meeting and presentation about 2 years ago as a favor to my cousin and I'm okay with their presentation, at least the local office in CA. But I'm already in the industry so I didn't find any good reason to join WFG.

This industry is very tough no matter who you go with. It's no cake wake. 3 of my cousins joined about 3 years ago and they are very successful now with WFG. So there are success stories there. It's just not all made up.

Just understand that WFG starts their commission very low and they don't have the world's best training. These are the two biggest issues with MLM companies. Lack of knowledge due to poor training, and very low commissions.

Due to low commissions, you are at a very deep disadvantage if you do not recruit and build an agency. Having a large agency is the bread and butter of MLM companies like Primerica and WFG.

Can you join other insurance organizations besides Primerica and WFG? Yes, you can. Many of them will offer you much higher commissions. You'll have to do your research to find which insurance companies do business in Canada.

Insurance organizations are called IMO. But many of them do not offer you a Multi-Level Pay structure. The pay structure is up to you to create or use. Most common is a pay between the Agency Owner and the Producer. Agency Owner can recruit and bring in new agents/producers but the producers often times will never recruit, just a salesperson until he/she wishes to leave your agency and start their own agency.

You can start your very own MLM insurance agency as long as you have the money to buy and run a MLM commission software to create Mutli-Level pay.

But to run and own your own insurance agency is years down the line due to lack of experience if you decide to go out on your own. With MLM companies like WFG, in theory, you can build it quicker do to a system is already in place.

BIGGEST ISSUE I have with MLM companies is that their sales managers will suck you dry of all your warm markets and throw you away if you end up picking the wrong mentor/upline. Do not give away all your warm markets and find someone you can truly trust.

Thanks for your response and showing both sides . As you have seen WFG too, so I would really give a lot of weight-age to your valuable response.

I would request your input on the commissions thing :

At WFG the commission structure broadly is like this :

You start at 25% , you recruit 5 people and 40,000 points you become a managing director. At this point your commission %age is 55%. 40,000 point roughly mean selling policies worth 40k annual premium. So by the time you become Managing Director, you sold policies worth 40K annual premium and earned roughly 15k as commissions. Then their are overrides etc.

Lets do some maths here to elaborate the commissions . The guy who I met at WFG told me that if i do financial planning for one family (husband 30yrs, wife 30yrs, 2 child at early age), and sell them 1 Universal life policy each of 200 per month, and RESP of 200 per month for 2 child, I would earn roughly below mention amount:
- commission of 6,000 cad at that time
- override of 250 per quarter for next 25 years for husband's UL policy (cad 25,000)
-override of 200 per quarter for next 25 years for spouse's UL policy (cad 20,000)
So in total financial planning of just one family would give commission of cad 50,000 over next 25 years.

So If i do the same thing with any other company, as a Producer, how much would be the commission?

Thanks.

 

[DHK]

So If i do the same thing with any other company, as a Producer, how much would be the commission?

If you start at a captive career agency, you can expect 55% plus bonuses and other employee benefits.

If you are an independent agent, you can expect 80%+ on day one.