Is World Financial Group a Pyramid Scheme? What You Should Know
If you are looking to join World Financial Group as a work from home representative there are a few things that you NEED to know first. This business opportunity is not all its hyped up to be and you need to be aware of the reality of it, which is likely very different than what you have been told.
In this short review I’ll be going over a few aspects of this business that most people aren’t going to tell you, especially those looking to recruit you into the business. And I know there are many people wondering is World Financial Group a pyramid scheme…. are they a scam?? Don’t worry I’ll go over my take on all of this.
World Financial Group Review
To be clear here, I am reviewing the business opportunity that WFG offers, not the products themselves.
World Financial Group, or WFG, has somewhat of a complicated history. It started out as World Marketing Alliance in the early 1990’s by Huber Humphrey, who had left the mlm company Primerica.
It wasn’t until the Early 2000’s that World Marketing Alliance became World Financial Group though. This happened after a series of lawsuits brought against World Marketing Alliance.
Aegon took advantage of the vulnerability of the company after these legal troubles and purchased them in 2001, renaming the company World Financial Group, which is what we know today.
WFG sells financial products such as investment and insurance. They employ what is called a direct selling business model, which means that anyone can join in on the opportunity and start their own home-based WFG business selling their products as an independent rep.
What is also important to note is that WFG has a mlm commission structure. This means that representatives can get paid to recruit other reps into the business. This is the reason for many accusations of this company being a scam.
Related MLM’s: Legal Shield
I know I said I wasn’t going to review WFG’s products, but it is important to touch upon them briefly.
As I said, WFG sells financial products. This includes a lot of different things like…
- College savings plans
- Debt relief
- Identity theft protection
- Life insurance
- Long-term care
- Mutual funds
- Retirement plan
- Segregated fund
- Unit investment trusts
In order to sell these products you have to become licensed properly.
The Compensation Plan
As mentioned, WFG’s compensation plan has a mlm structure to it. This means you can earn money off of the people that you recruit into the business beneath you. There are several different parts of the plan but I will be just going some of it..
Everyone will start out at the rank of Training Associate, which is the lowest rank on this mlm structure. You will receive the lowest payout here of 30% commissions. I order to move up the ranks its all about recruiting more people and making more sales.
The different ranks of WFG and they commissions you earn accordingly are shown below…
- Training Associate – 30% commissions
- This is where all people start off
- Associate – 45% commissions
- Need to recruit 3 new associates and 3 new sales in 30 days to achieve this rank
- Senior Associate – 55% commissions
- Need to recruit 10 new associates and make 10 new sales in the next 30 days to achieve this rank
- Marketing Director – 62% commissions
- Need to recruit 25 new associates and make 25 new sales in the next 30 days to achieve this rank
- Senior Marketing Director – 80% commissions
- Need 75,000 points over 3 months
- Need 10 life licensed associates
- Need to have make over $35,000 in commissions over the last 12 months
One important thing to note here is that this is a team effort. So once you achieve Senior Associate you will have 13 team members (minus some that quit). All 13 of those team members are going to work towards those 25 new recruits and sales that you need to more to the next rank of Marketing Director.
There is also a lot more to the compensation plan. Another big way to make money is by getting one of your recruits to reach the Senior Marketing Director. If one of your personal recruits reaches this level you can make 17% off of what he/she makes. This is called your first generation level. And there are 6 levels to this that go as follows..
- 1st gen: You make 17% of what they make
- 2nd gen: 8%
- 3rd gen: 5%
- 4th gen: 3%
- 5th gen: 2%
- 6th gen: 1%
And there are other parts of the compensation plan that are more confusing. But the main point that you should take away from all of this is that this business model is all about RECRUITING new associates and SELLING more products.
Isn’t This a Pyramid Scheme?
Is World Financial Group a pyramid scheme?
While it may look like a pyramid scheme it is not.
The only way that World Financial Group could be considered a pyramid scheme would be if it were a product-based pyramid scheme. What this would mean is that its revenue was too dependent on recruitment of new associates rather than product sales to the general public.
And I would not say that it is.
In order to move up the ranks and make more money, YES, you do have to recruit more people… but you also have to make new sales. And its not like they force these recruits to buy these products, making sales at the same time.
So although this mlm is structured like a pyramid scheme, which every mlm is, it isn’t one. I think they place plenty of focus on product sales to the general public and I have seen many mlm’s that are much more “shady” than WFG that still get away with what they do.
Related Reading: Difference Between MLM’s and Pyramid Schemes
The Shady Side of World Financial Group
The shady side of it all is how associates are pushed so hard to go out and recruit more members. This often leads to lies being told and deceptive means being used to get new members aboard any way possible.
I have even heard of associates posting jobs openings on workboards just to try to recruit new members in. That is ridiculous.
The fact of the matter is that if you want to be successful in this WFG business you are going to have to be an absolute animal at recruiting others. You are going to have to recruit, recruit, recruit. You need to build up that team beneath you and take advantage of the mlm structure at play here… making money off of the efforts of those beneath you.
The bottom line is that this is extremely difficult to do and this business, like just about any mlm out there, has an extremely high turnover rate.
Final Thoughts & What I Recommend
One thing that I found strange and that is important to mention is that WFG doesn’t provide any income disclosure for their new associates. They only do so for the higher ranking members. It is likely that this is because of extremely low pay that new associates make that would scare away prospects, which is common in this business.
But anyway… to answer the main question here of whether or not WFG is a scam or not… It isn’t. It is a legit company that but it does have some shady sides to it. The main reason that it is so shady is because of the massive incentive it gives its members to go out there and recruit more people in like crazy. This leads to members recruiting by deceptive means to get anyone in that they can.
The fact of the matter is that with a mlm like this you are going to have to recruit like a madman to be successful. Many people that you do recruit are going to quit so you are going to have to be constantly recruiting.
So if you have the salesperson type personality then this might be a good business for you.
If you are like me and are just not the salesperson type and don’t think a recruitment style business like this is right for you.. and you want another option for making money with your own business, you should take a peek at how I make a living working online (link below). I work for myself online and its a pretty awesome career. In the post I wrote I explain what it is that I do, how it all works, and how others can do the same.
Comments, questions, concerns??? Leave them below in the comment section and I’ll get back to you soon 🙂