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What Is World Financial Group ?
World Financial Group is an online plaftorm or a company that claim to offer or sell financial planning services. This company sells savings, insurance, and retirement products through its associates, who usually have to pass a licensing exam for the country they live in.
World Financial Group (WFG) has a multi-level-marketing method of promotion and recruitment that can turn both customers and employees off.
According to our observation in the finance industry, World Financial Group has less or no respect when it comes to its peers. But as of 2019, WFG has over 42,000 associates working for them. In 2018, WFG paid out over $792 million in commission to its associates.
How Does WFG Get Its Customers ?
World Financial Group (WFG) relies on its associates in two main ways to get customers. Firstly, any of the products the associates themselves purchase, essentially turn them into customers.
All those new associates will be immersed in WFG products and culture, and probably end up buying products themselves. Then, they are forced to aggressively try to get more associates, spreading the WFG product line and sales almost like a virus as it multiplies down the levels.
As an associate, you’re expected to make a list of all your friends and family and approach them to sell your financial products, or to recruit them as an associate for WFG.
But that is typical of MLM companies, and we don’t want to knock WFG specifically. They aren’t doing anything illegal, but we think it’s a terrible business model for both customers and associates, and there are so many better options out there. But it obviously works, as WFG has a tonne of sales. If anything this just shows the power of “warm” leads and buying from people that you know and trust.
How Does WFG Hire Associates?
World Financial Group (WFG) employs a Multi-Level-Marketing (MLM) business model for its associates. The way it works is after you get hired onto WFG and pass all the licensing exams, you’ll have to recruit new associates.
After you join WFG, you’ll be encouraged to get off to a “fast start,” where you are supposed to recruit three new members and sit in on three training sales within the first 30 days of the company.
This aggressive approach to recruiting new members sets off alarm bells in my head. Getting these new recruits and associates is another type of sales tactic.
Any products that those associates either buy themselves or sell to other people you’ll get a percentage of the commissions. A lot of WFG’s sales come from its associates themselves. It’s a classic MLM business model and one that should be a huge red flag in choosing to work for WFG. Their own website shows the multi-level shape of their business model.
How Much Money Can I make on WFG?
You will only receive money as a commission if you sell something at WFG, or if those associates you recruit under you buy or sell WFG products.
Even ignoring all the negative connotations that come with MLM companies, I’ll give you an example of why WFG is not a great place to work. Let’s take a look at the WFG contract levels, which is the amount of commissions you can earn for say something like life insurance.
If you can have a contract level of 100%, you will earn 100% of the first-year commissions on top of what your commission structure is.
When I first started out as a life insurance broker, I had an 80% contract level to start, and it increased to 140% near the end of my time as a broker, which was in less than two years.
According to a previous year’s compensation report that I found (which I can’t link to due to copyright claims by WFG), a WFG Associate contract level is a measly 36%, a Marketing Director contract level is 51%, and a Senior Marketing Director contract level is 64%.
Note that this may not be up-to-date information, as the report was a few years old, but I believe it should give a ballpark estimation. I’ve also had some WFG people reach out to me directly and the contract levels they have mentioned seem pretty in line with those numbers.
There are other better and more reputable brokerages out there. If you are willing to get licensed, they can also train you and support you better than WFG, and give you a larger payout.
When was World Financial Group (WFG) Launched ?
This company was launched in 2001 by an insurance company called Aegon. In 2008, another insurance company, Transamerica, purchased WFG from Aegon. The company operates in Canada, the U.S, and Puerto Rico.
Is World Financial Group (WFG) Legit ?
Yes, WFG is a legitimate company. Once you have purchased an insurance or investment product from them, you will definitely receive the product.
Also, you may be pressured into purchasing expensive products that may not be the best for you, such as permanent life insurance or segregated funds, but will earn the associate selling it a big commission. There are numerous anecdotal accounts of this happening, just scroll through the comments below.
Often, the associate you are dealing with may not have very much experience also, and will likely try to recruit you to become an associate also.
Is World Financial Group (WFG) a Scam ?
In the literal sense of the word, no, World Financial Group is not a scam. The company will not take your money as a customer and give you nothing in return. That’s what a pyramid scheme is, and WFG is not that.
If you join the company as an agent, you will have the chance to earn an income and need to be licensed in order to directly sell any of these products. WFG is approved and regulated by the financial governing bodies of the countries that it operates in.
However, where many people are turned off of WFG and wonder if it is a scam, is due to its sales tactics in acquiring customers, and multi-level marketing (MLM) methods of hiring agents to work for them.
World Financial Group Alternatives
Build a Skill
I strongly suspect that most people who join WFG aren’t that passionate about investing and insurance, and certainly not sales. Instead, they’re just looking for a way to make some money on the side or at home.
Instead of working at WFG, you can get licensed on your own to sell investment and insurance products, and start working for an insurance or investment brokerage.
As a consumer, there are countless other options for you other than WFG:
If you’d like to become a do-it-yourself (DIY) investor, sign up for an online broker and learn how to invest on your own. Here are my top picks on the best trading platforms in Canada.
For Canadian life insurance, I would recommend PolicyMe. They’ve recently created their own products and offer them at very competitive rates. Check out PolicyMe’s website for some free quotes.
Finding an Advisor
If you must use an advisor, try to find a fee-based advisor that is not incentivized to push you towards a certain product. They can help you with both investments and insurance. Do a search for a “fee-based financial advisor” in your area. Try to find one with a Certified Financial Planning (CFP) designation.
While WFG may not be a scam, we wouldn’t ever work or buy any products from them, nor would we recommend any of our friends or family to either.
We believe there are so many other better options, in terms of choosing a career or buying financial products.
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