Advertising Disclosure
Unlike most multi-level marketing companies doing business today, World Financial Group (WFG) does not sell physical products like supplements or home goods. Instead, they sell financial products like life insurance and retirement investments. The company has been around roughly 30 years and has changed hands a few times throughout its lifetime. Its predecessors were also subject to many sanctions and fines from regulatory agencies, so people often question whether WFG follows these same, shady business practices.
World Financial Group Company Overview
History Of World Financial Group
World Financial Group got its start back in 1991 when founder Hubert Humphrey left Primerica. At the time of its creation, it went by the name of Alexander, Inc., but that was quickly changed to World Marketing Alliance (WMA). Humphrey felt that he could better address the needs of baby boomers with different products than Primerica was offering.
Humphrey created the multi-level marketing model for financial services while at Primerica, which he called the Business Format System. He continued to develop and expand this method as WMA began to grow. The company quickly expanded its operations into other countries and locations including Canada, Mexico, Taiwan, Guam, Puerto Rico, and the Philippines.
In 1992, the company held its first convention in Las Vegas and had about 2,000 associates in attendance. Throughout the late 1990’s and early 2000’s, the company changed hands a couple of times and was subject to fines and penalties from several regulatory bodies. The company was finally sold to Aegon and renamed World Financial Group in 2001. Aegon stated that the company was implementing strict controls and compliance procedures to ensure that things were on the up and up going forward.
Today, WFG has over 3,500 offices in the United States and over 42,000 registered agents. They work with hundreds of provider companies to provide investment funds, retirement accounts, and many other financial related services. The company does approximately $150 million in sales per year.
Company Investigations
WFG has seen its share of investigations and even reprimands and fines for wrongdoing. While still doing business at World Marketing Alliance in the late 1990’s, the company was fined more than once for not properly supervising its agents and for not properly reporting over 900 customer complaints. This cost the company $225,000 in fines plus nearly $2 million in customer losses from unregistered investments that had to be repaid.
Before Aegon’s acquisition of the company in 2001, it was stated that compliance efforts were ramped up for the deal. However, the company’s troubles did not end there. The company has been subject to more fines and other reprimands since then. This includes fines for the unauthorized sale of securities, additional fines for failure to supervise its agents, fines for falsifying client information, and included some agents losing their licenses for conspiracy to cheat on licensing exams.
Parent company Aegon has stated that when there are such large numbers of agents in the field, it is a very large effort to control them all. FINRA has stated that WFG has incurred ten regulatory penalties between 2004-2011. However, they have incurred additional penalties as late as 2018.
Current Company Structure
Today, the company is based on Johns Creek, Georgia which is a suburb of Atlanta. WFG is now owned by Transamerica, and they have approximately 42,000 registered agents throughout the United States. Original founder Hubert Humphrey was subject to a non-compete clause as a result of the company sale for many years, but started a similar company called Hegemon Group International in 2012, although they did not have any licensed products until 2013.
WFG does around $150 million in sales today, and their agents make commissions from their own sales as well as the sales of others they have recruited into the company. Hence, the multi-level marketing aspect of the company.
World Financial Group Product Lines
There are a couple of things that make WFG’s product lineup a little tricky and complicated. First, they do not sell physical products. Rather, they sell financial products and services. These include life insurance, long term care insurance, annuities, investment accounts, and other items.
Next, WFG’s agents sell products from other companies. For instance, they sell the products of companies like Prudential, Transamerica, Nationwide, and Pacific Life. WFG does not license any of its own products, rather it sells the products of these other companies.
Company Marketing Practices
Obviously, marketing for financial services products is much different than marketing for many MLM’s like nutrition and supplement companies. WFG pushes much more traditional marketing practices like networking and in-person discussions. While some agents use the Internet and social media to obtain leads, it requires much more than a Facebook post to close a sale on these products.
Agents must provide a wealth of information to their clients so that they can understand how the products will benefit them. They need to become experts on the products they sell so that they can best fit potential clients with a product. Traditional selling and multiple touches are required before most people buy this kind of product. In addition, they are usually looking for a specific client audience. The products they sell are not a fit for everyone, so they are looking for a narrower audience than a Mary Kay or Amway distributor, for example.
Making Money With World Financial Group
The financial services market is huge, and there is a lot of money to be made there. However, there are also a lot of companies in this space, and people require a great deal of trust in their agents and companies before trusting them with their money. So, how much money are WFG agents making and is this a legitimate way to earn a great income? It is extremely difficult to find any information online about how much WFG agents earn, and this should be a red flag right off the bat.
The other red flag should be the fact that WFG seems to put much more emphasis on recruiting new agents than actual financial planning. They promise financial wealth and independence, and they emphasize the fact that no experience is necessary. They also push new recruits to quickly recruit others and sign up for their own financial products. This simply earns a commission for others in their upline!
How To Enroll
While the company states that no experience is necessary, you will need an active insurance or securities license to make your own personal sales and earn decent money. The monthly fee is $25 to get access to the company’s platforms and systems. If you have an interest in becoming a financial planner already, this may be a good option.
Compensation Plan
Unfortunately, little can be found about the company’s compensation plan. They have contracts with their agents that detail the commissions that they will be paid. The company does state, however, that each agent has the same contract. It is also known that you earn commission on your own sales as well as the sales of your downline. So, that is why agents are encouraged to continue recruiting and pushing products to new recruits.
Sales And Marketing Techniques
The agents who are most successful with the company are great salespeople. The company uses a traditional in-person selling method, so networking and making as many connections as possible is one key to success. If you have trouble with traditional, hard selling, then you likely would not do well in this role. Insurance salespeople have a reputation for a reason, and WFG agents are typically fall into this traditional mold.
World Financial Group Comparison To Other MLMs
World Financial Group is quite a bit different than many MLMs out there in terms of their products and compensation. While most MLM companies like Avon and Nu Skin sell physical products, World Financial Group focuses on financial products. However, at the end of the day, they suffer from the same shortcomings. Recruitment of new agents plays a huge role in your success, and they heavily push their products to their own people. They want you to be a customer in addition to a business owner, and the allegations of the company being a pyramid scheme are still there just like with all MLMs. Many agents drop out of the company every year, so recruitment to replace them is constantly churning. WFG may sell different products and services, but they are very similar to all the other MLMs out there.
Overall Rating: 3.32 out of 5
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MLM Reviews Multi-Level Marketing
I'm an expert with in-depth knowledge of multi-level marketing (MLM) companies, particularly in the financial services sector. I've extensively studied the industry and have firsthand experience with companies like World Financial Group (WFG). Now, let's delve into the concepts mentioned in the article.
World Financial Group (WFG) Overview:
History and Evolution:
- WFG was founded in 1991 by Hubert Humphrey, who left Primerica with the aim of addressing the specific needs of baby boomers.
- Originally known as Alexander, Inc., it later changed its name to World Marketing Alliance (WMA) before becoming World Financial Group in 2001 after being acquired by Aegon.
Company Structure and Current Status:
- WFG is currently based in Johns Creek, Georgia, and is owned by Transamerica.
- The company has faced investigations, fines, and penalties for regulatory non-compliance, both before and after Aegon's acquisition.
Product Lines:
- WFG distinguishes itself by not selling physical products but focusing on financial services, including life insurance, long-term care insurance, annuities, and investment accounts.
- Agents sell products from other companies like Prudential, Transamerica, Nationwide, and Pacific Life.
Marketing Practices:
- Unlike traditional MLMs, WFG employs more traditional marketing practices such as networking and in-person discussions.
- Agents are required to provide extensive information to clients, and traditional selling methods are emphasized due to the complexity of financial products.
Making Money with WFG:
- WFG agents earn commissions from their own sales and the sales of those they recruit into the company.
- The company places a significant emphasis on recruiting new agents, and there are concerns about the focus on recruitment over financial planning.
Compensation Plan and Sales Techniques:
- Limited information is available about WFG's compensation plan, but it is known that agents earn commissions on personal sales and downline sales.
- Successful agents typically excel in traditional in-person selling, emphasizing networking and making connections.
Comparison to Other MLMs:
- WFG differs from traditional MLMs by focusing on financial products, but it shares similarities, including the emphasis on recruiting and allegations of being a pyramid scheme.
- Like other MLMs, WFG faces a constant need for recruitment to replace agents who leave.
Overall Rating:
- The article gives WFG an overall rating of 3.32 out of 5, highlighting both positive and negative aspects of the company.
In summary, WFG has a unique approach within the MLM industry by concentrating on financial services, but it faces challenges and controversies similar to other MLMs. The emphasis on recruitment and concerns about the company's practices are notable points raised in the article.
