The Pyramid Scheme aspect of Primerica Financial Services
I ran across a blog that did a series examining Primerica Financial Services, a multi-level marketing company that purports to sell financial products. While the company does offer life insurance, investments, and other financial products, like a typical MLM… they’re really out there selling the opportunity. The name of the game is endless recruiting.
The Financial Blogger did several nice posts about the company, but this explanation of the pyramid scheme aspect of Primerica was exceptional:
Is it a pyramidal scheme? In legal terms, the answer is no. However, it does not mean that because it is legal that the company’ structure is not shape like a pyramid. Everybody is making a cut on the people below them; it goes up to four level. I think this is clear that the guy on the top makes the big bucks. They will answer that every company is like that as the President and the VP’s are in the driver’ seat and the other employees are left with nothing. It is right also.
However, they do not explain why they are able to give a commission to four people for the same sale. The answer is pretty easy: they have to cut down the commission compared to the regular industry. As an example, if a life insurance of 100K would provide another agent with $1,500 in commission, a Primerica advisor at the lowest level will earn $900, then his recruiter will receive $300, the recruiter’s recruiter will get $200 and finally the guy who put all of them together will earn $100.
So for those who are in to sell, Primerica is definitely not the right place to be. “Yeah, but you could build a team and create your own business”, I guess they forgot that the best sellers on earth are not necessarily interested in building a team compared to earning the big bucks right away. The main problem I see with this approach is that you have to convince individual to work hard for less that they could earn only because they have the option of building a team a earn extra commission on somebody else’s work. In fact, if everybody concentrates on recruiting individuals, who will make the sales? You may have a hundred people below you, if nobody sales, it still makes 0$ in your pocket.
Check out the blogger’s whole series on Primerica.
Primerica is not a scam by definition, but it is not a very good “opportunity” either. I am going to explain the half-truths, lies, and misleading statements that are used by the Primerica reps to coax people into believing that Primerica is actually a good opportunity for them to become multi-zillionaires. I am also going to compare it to other opportunities in the industry to show how you get screwed by becoming a Primerica rep. DISCLOSURE STATEMENT: I am experienced enough to analyze this topic with a MBA in Economics, series 7, 63, 65 securities license, and 12 years experience in the financial services industry with Wachovia, Morgan Stanley, and AXA Advisors. I have never worked for Primerica. I declined the offer after doing thorough independent research, analyzing their own sales/marketing material, and speaking with actual participants.
1)”If you join Primerica, you will be in business for yourself; therefore you must pay for all of the cost of your business (i.e. licensing, training, and office)” $99 to start then $25 monthly for Primerica online (additional fees will come for training and investment licensing, later.) First off, you are not in business for yourself; you are an independent distributor of Primerica/Citibank products and a select group of mutual fund companies. If you read the IBA’s small print….Any assets or client accounts you bring into Primerica belong to Primerica and you must sign (not 1 but 3) 2 year non-compete contracts (1 investment, 1 mortgage, 1 Insurance). This is the way that Primerica/Citibank push their cost of sales off on their sales force. Reputable investment/insurance companies once hired will take you through a training program and pay for your licensing along with a higher commission payout and the clients are yours.
2)”You can build a team of reps and get overrides so Recruit, Recruit, Recruit.” I equate this to the equivalent of an “Insurance Salesman Mill.” You have heard of a puppy mill….well Primerica’s average rep makes 2.5 sales per year so the only way to keep new business coming in the door is to recruit new people, have the RVP work their warm market during “training” and have the new rep hopefully repeat the process, so that you have more people writing less business as opposed to properly training their reps to sell through seminars, networking, or acceptable referral selling practices. This is the ponzi scheme aspect of their business model. If they do not recruit, recruit, recruit the scheme breaks down b/c they are not replacing the 99% of reps that just left the company. The FTC has on several occasions analyzed this model due to the tremendous amount of complaints and concluded that they were not a ponzi scheme because they actually sold a product, but that does not change the fact that the business model is ponziesque in nature. There is not one insurance company in the world that would disallow you the opportunity to build a team of agents under you and the payouts would be much higher, so do not waste your time splitting your commissions with people who do absolutely nothing for your business.
3)”Buy Term Invest the Difference is the only retirement strategy to use.” I do not disagree with BTID for most low/middle-class investors. It is not a cure-all strategy. People who make over 100k per year need permanent insurance, people with complex estate tax situations need permanent insurance, some people who have built up cash value would be crazy to switch from an investment vehicle that grows tax deferred vs. taxable mutual funds. Also the term insurance product that Primerica offers is overpriced when compared with other like-kind carriers with exactly the same features. They must price it that way to accommodate their tiered commission schedule which is well below industry average and pays 4 levels above to people that do absolutely nothing to help you grow your business. (will discuss later).
4) Product line Analysis: 1) The term insurance is way over priced compared to other leaders in the industry. 2) The SMART LOAN product is 100-150 basis points (1%-1.5%) higher with higher closing cost than most other bank equity loan products. They try to sell this by putting the client on a bi-monthly payment plan and illustrate how they can pay it off in fewer years showing the interest savings but its fuzzy math. You can pay bi-monthly on a 30 year fixed or pay an extra amount per year and accomplish more savings with the lower rate so do not buy it. Do your homework and make sure you are comparing apples with apples on the amortization calculation.
5) “Pay the Eagles and starve the Turkeys” This is an expression that has been used in the insurance industry for years. Basically this strategy is worse at Primerica than any other company I have analyzed or been a part of throughout my career. By recruiting, recruiting, recruiting….. the reps at RVP level keep new business coming in the door because they tell new recruits that part of their “training” will be to offer sales leads from their warm market. The new reps set the appts with people they know (friends, family, co-workers) and the recruiter and recruited go on the sales call as a training session. Because the new rep is not insurance licensed yet, any business that is sold goes under the Recruiter’s rep code (usually RVP) with promises of being paid back later. wink, wink. Also any investment 12b-1 fees that would normally go to the sales person is not paid to reps unless you are RVP level which does not happen at other companies. If you sell a mutual fund as a rep at Wachovia, Morgan Stanley or any other investment house you receive the annual management fee not the person that recruited you. Also the payouts at Primerica start at a paltry 25% where most other companies start out at 45-50% and go up to as high as 90%. If you analyze the income earners in Primerica….you will find that the +/-5 people making over 5 million per year and the +/-43 people making over 1 million per year are all a part of the original founders of the company who are on top of the pyramid. As long as the rank and file keep recruiting, recruiting, recruiting and washing out of the business in 6-8 months, the orphaned accounts that are left keep rolling up to their book of business. Also, if you are one of the naive 1/10 of 1% that get to 100k per year after 10 years and overcome your upline in income you are duly rewarded by him taking your best downline. So in reality they could care less if you grow a successful business because the top 5% get the business either way, either by washing out of the business and they get the orphaned clients or build a successful business and they take your best downline. Primerica’s tag line should be “We sell false hope and a misleading, lackluster opportunity.” So the bottom line is…..If you want to sell overpriced, non-competitive products for a lower commission than you could get elsewhere, sign a 2 year non-compete to do that and also pay the insurance company for the right to do it, then Primerica is the company for you. My Advice: Work for a reputable insurance carrier that does not have to recruit people like “The Primerica Debate Team” to go to online blogs and write positive things about the company to counter act all of the negative real-life experiences from people who endured the ordeal.
Tracy, let me begin by saying that in no way shape or form am I trying to be rude to you. Now, since you said “Is it a pyramidal scheme? In legal terms, the answer is no.” It either is or it is isn’t and obviously the answer is no you even agreed. So, there is no if, but, or however about the question. The answer is no. Primerica reminds me much of the restaurant corporate business. Host make the least, busers and servers get more with tips, the assistant manager makes a little less than the General manager, then the regional manager makes even more than the general manager and so on. Explained that way, one can argue that the restaurant business is a LIKE a pyramidal scheme, but it’s not. Every company runs their business different. Many individuals may disagree on the different methods, but if the government says its okay, whether it might be right or it may be wrong, it is allowed. Some people will succeed and some people will struggle with it just like any other business.
By mistake I landed on your page again. And I read the post for the guy with the MBA that worked with great and known companies such as Morgan Stanley and Wachovia(I think they asked for the goverment money A.K.A. tax payers money A.K.A my money, your money, etc…) My question for that guy: do you have something better to do? leave alone Primerica and other companies, if Primerica it is not for you, who cares about what you think? Be concern about you and your family. I bet you: you are unemployed right now and if not, you will be if you work for those corporations or if you have a boss. Let me tell you about corporate behavior: If a person coming out of college has not experience they wont hire you, if you have experience but no degree they wont hire you, if you are not a family member or friend they wont hire you. You need to work your _ss hard to get promoted and beg a century for a rise. My point here is the big corporations are crooked because they have billions of dollars in profits but they prefer use a big part of this to lobby congress to minimize the minimum wage, create bellow minimum wage jobs and receive tax credits for this “job creations” I think Tracy shoul Investigate the frauds of all this companies or is she scare?. My last but not least point, Primerica is a legitimate company with a legitimate business and if anyone accepts this independent agent agreement let them do it (dont talk bad about the company, because you are attempting againts the dreams of other people that may be succesful at this business and if you tell them not to do it, you are cutting opportunities for them and their families, also, if a person talks bad about other is tha correct? show some respect!)And if they joined is because someone told them they can be somebody, no matter what race, or education, social status, religion, or any other barrier, they only have to work and be rewarded with money, promotions, money, vacation trips, money, friendship and the satisfaction of doing what is corrrect for the client(by the way a client can be myself-I want to invest, I need Insurance, I need a LTC program, etc/my immediate family mom, dad, uncle, cousin, my best friend, my other best friend, recomendations for what I did for my best friend, etc…) not for the corporation. I have said! Take care of you and your family. God be with You.
p.s. if I have any writing mistake forgiveme I am 100% mexican!
Yes, we have nothing better to do than to warn consumers about a crappy company with a crappy “opportunity” and expensive products. There are much better products out there for consumers, and they’re better off with real jobs with rel paychecks than participating in the pyramid scheme called Primerica!
Tracy,
This is an awesome website. You are really providing a great service exposing some of these companies. I personally have license for life and health and can offer some great term policy rates. I don’t have all my facts but have been told by others how expensive Primerica’s term product is. I have been approached by Primerica and ran the other way. Have no intention of ever joining them.
In regard to the negative response from the MBA, I will state one fact.
AXA Insurance of New York is rated by the neutral A.M. Best rating firm as A –
Primerica is rated A +
Enough said. Everyone look it up. http://www.ambest.com
u guys r retarded… primerica has made me bank… Eventually the oppurtunity will come and go and you will all still be complaining
Primerica offers opportunity. Each individual has to take advantage of such opportunities and make the best of them. Primerica is not for everyone. If it is for you, it can change your life for the better.
Regarding Leo comment:
I do agree 100% of your comment about Primerica. It is not for everyone but if you like what you do keep doing it. My only problem with Primerica is that most of their Reps alway “saying” bads thing about their companys.
In response to the MBA (Primerica Truth):
Your acumen, and comprehensive research is well appreciated by intelligent people. I would love to see how a Primerica Rep would answer each of the 5 allegations posted in your commentary.
I will keep watching, but I am sure that no one can step up to the podium and offer an INTELLIGENT counter, because you are dead on the money. Good Job!
In response to Rachelle:
As a Primerica Rep I am willing to step up to the podium and accept your challenge.
1. When I joined Primerica I did pay a one time fee of $99 and I do currently pay $25 per month for the software program that allows me to run my business. While I was in training and unlicensed, I was able to market one of their products to clients which payed me the $99 dollars back several times over. I received extensive training and did not have to pay for my insurance license and I am in the process of obtaining my securities license which the company also payed for. No compete clause- So what. It’s not like any other company would have given me chance anyways.
2. I’m not sure where Primerica Truth is going with the ponzi scheme claim. As I understand a ponzi scheme is a system of taking money from one investor and giving directly to another investor as interest earned on that investor’s investment. Think Social Security. Which is a giant ponzi scheme run by the government. I think Primerica truth is trying to speak to the recruiting side of the business. I do believe that if any business wants to grow they have to recruit/ hire/ employ or whatever you want to call it, new people. The only difference in Primerica is that a Rep at any level can bring someone into the business, train them, and enjoy an override from that person when they are productive. Compare that to a boss who hires employees and puts another employee in charge of training them for little or no additional compensation. Then who gets to enjoy the override from the new hire? The boss. Which system do you think is really better? I’m not in the business of financial services. I’m in the business of distributing financial services. That’s why I’ll ultimately be managing an office collecting overrides from the people I supervise, while Primerica truth will be shaking the bushes for more sales to earn a buck and making his boss rich.
3. Buy term invest the difference period. The only people I have ever seen that buying cash value life insurance is good for is the agent selling it.
4. As far as our term prices go. I don’t have a nicely completed comparative table of prices to show you. But I can tell you that I replace everybody’s insurance everytime because I always have a better deal. The SMART loan is right for some and not for others. I can honestly say that banks use fuzzy math with the interest calculations. When I show a client that they can be out of debt faster and pay less in interest, they really aren’t concerned with the interest rate. I wouldn’t be either.
5. Compensation. A new Rep starts out at a 25% commission. However, you can easily qualify for a higher commission before you are licensed. I did and started at 50% plus a 20% bonus on sales. Who else do you know in financial services that are giving bonuses to new people? I think they usually only give bonuses to the top execs who now a days have to give it back because they are owned by the government due to shoddy business practices. Do your homework Primerica Truth. Primerica submitted an IPO and will be founded as the largest financial service marketing company in North America with a 33 year track record, no debt, and $5 billion in liquid capitol. No government assistance needed. The top earners have been in the company for years and years. But the top earners in most company’s are senior to everyone else. We also have several people who have made it to the top who are young and new in the company. I won’t mention names but a certain SNSD in Utah is 29 years old, in the company for 8 years and earns over $1million a year. My RVP was a $100k earner in three years not ten.
Rachelle
Primerica is an awesome company who does right by their clients and reps. Yes there are a few bad apples. But a company of over 100,000 reps is going to expierence that.
Tracey
I have a real job with a real paycheck. It sucks. I have no opportunity with it. I have a shot with Primerica and I’m going to take it.
Jason
Good morning guys..i am a Primerica agent for 5 years..make a lot money..married with 3 young kids..i dont know what my life would be without Primerica..i just dont understand by some people that wannna be wealthy without doing the work..if financially independent and debt free are easy to achieve.. i guess everybody would do it..ITS NOT EASY…its business..we cannot get frustrated from the work than we don do..in other word..WE ARE LAZY.. a job is just a job when u retire u dont have that J>O>B..we need to understand that..to all PRImericans in this blog..i admire you guys just to spend some time with the people that just dont get it.. PRIMERICA is for special people that have guts, desire and glory and do whatever it takes to get the job done.TO APRIL 1ST..WE ARE THE LARGEST PUBLICLY TRADED COMPANY IN THE WORLD WITH ZERO DEBT…Dont waste our time here talking to people that are complaining and bitching for something that tried for a couple of months..Thats why only 2% of the population make more than 100,000 a year. Guys lets the crusade move and we conquer the world..
i find this site hilarious because people are to blind to realize that every job, company etc. is a so-called pyramid. Some one is always above you and making more money than you. but not every company gives you the opportunity to reach the top and own your own business. We dont sell products, we promote services that help families do more than just survive, but live without worry about the future. If that is such a bad thing and a scam, then I pitty whoever thinks that. It only works for those who want to get up off the couch and do something about the lives they complain about every day. Keep your eyes opened, because we are big and doing the right thing for others, and always looking for others to join us in the fight against the crappy economy we now deal with. How many companies do you know that have come out ahead and always will come out ahead of the economy????? If this were a scam we would have been stopped after 30years , dont u think?
To Adrian Cortes: Good luck in your endeavors with Primerica. I hope that you can build a career with the company and support your family. I offer the information to help people that have never been in this industry on how Primerica misleads and deceives their own reps and how other insurance companies at least offer better products and a better opportunity to suceed.
To Chris: Please learn how to read an AM best rating chart…….AXA Insurance Company of New York (rated A-) is the Operating Company that covers their Property and Casualty products. AXA Equitable Life Insurance of New York (rated A+) covers their life, accident, and annuity business and is the name of their North America Life Company. AXA Group is ranked the 99th largest corporation in the WORLD by Forbes. Citigroup is ranked #472 and no they are not the largest financial services company in the World, North America, or even the United States (even before the recession) in terms of revenue, assets, or market capitalization. They boast being the largest financial services company in North America, but it is a case of being deceptive once again. Citigroup was the largest financial company in North America in terms of employees before the break-up, but most of the 100,000 Primerica employees are part-time, only 25,000 have their securities license, only 10,000 make more than $50k per year. Please do your independent research about everything that Primerica tells you and read all of the fine print and disclosure information on Primericas own marketing/ contract material. You will learn so much about your own company.
http://www.forbes.com/2009/04/08/worlds-largest-companies-business-global-09-global_land.html
To Jason: Other insurance companies will pay for your licensing and train you. Other insurance companies do not charge you $25 per month to use their website to check on your accounts, sales numbers, and agents.(Are you kidding me!) Other insurance companies will chargeback on sales commission that “fall off the books” , denied or cancelled within a year, but would never do a chargeback PLUS an additional $25 over and above the commission paid to the rep for a denied, refused, or cancelled policy. If a client is rated, other insurance companies will pay the rep the difference in premium, Primerica keeps the difference themselves. Other insurance companies will allow you to recruit a downline (producer group), pay you more in commission, never take your best two downlines (producer group), and you will truly own your book of business. Start asking the right questions to your upline and watch them get confrontational and start lying to you all over again. God Bless you Primericans, I hope that some day you will learn the truth.
Art Williams started the whole Primerica conglomerate. I watched the “Do it” video from 1987 and it’s an embarrassment.
Basically he’s a first class redneck idiot.
I guess the there’s a lot of those type of people in the USA since his company is successful and you’d have to be an idiot to buy their sh!tty, overpriced products.
This thread at TFB really gets into the meat of PFS.
http://www.thefinancialblogger.com/comparing-primerica-to-other-companies/
Let me say this. It’s probably a good idea if the Primerica agents don’t read the post. Sometimes facts can burst a bubble.
I was recently recruited by Primerica.
I thank Tracy for her well thought out opinion. While I don’t agree with 100% everything that she says, it is extremely professional and thought out.
I was very put off by the lack of professionalism displayed by Primerica advocates in their responses to the artical and it substantiates my concerns about recruiting Primerica’s practices.
As a recent Primerica recruit, I was very very swayed by the chance to learn myself about financial products and help others about saving and investing money. I was not put off by the fact that commissions were so little at the recruit level because I understood that my recruiter would have to hold my hand a lot and really he should be earning the commission while training me.
I should have done a better job at researching Primerica. I did find that they have A+ rating on Better Business Bureau. However, there is a group in Dallas that has D-. And most folks will at least look on the Better Business Bureau and it is important to not have to combat a bad company image to get ones foot in the door with a client.
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I was not put off by PrimeAmerica MLM scheme because there are plenty of other examples of mainstream MLMs such as Avon and Mary Kay. Crown Financial (Christian personal finance management organization) isn’t against them, but one does their homework recommends finding MLM that are are not a scam and will work for you. So that is confusing – are MLM’s automatically a bad way to market products?
I am concerned about Primerica’s recruiting practices as there is not very much discernment about who is recruited and it is important to have quality team members (who represent one’s company/business professionally and ethicly). I think though I should avoid MLMs because I am not really interested in constantly recruiting and training folks. I am interested in doing finanical plans for folks
I am $125 poorer but wiser now
I am now trying to get out gracefully and safely.
I think it’s hilarious that all the people defending Primerica say the same thing that their boss told them when recruited. Every business is a “pyramid”. Well not every business are you forced to pay to start and recruit, recruit and recruit.
I will give them credit for accepting anyone…. except do I really want just anyone making my financial plans? Do I really want some dude recruited off the street saying I can save you thousands of dollars? Do you even know anything about finances?
I will paint you a picture of when I was asked to join them, the person recruiting me drove up in a six inch lifted brand new Ford Truck, 200 dollar jeans and shirt with alligator boots. This first impression got me thinking three things, one he is completely going to use me to get rich ( he doesnt care about me), two is this the type of look that higher level employees look? Would I trust someone that dresses like this to make my financial plans? and the final first impression I got is…. He is fake rich and has absolutely no money and no assets. Its all appearances.
He was going over some of his sales numbers and using big words like “Simple Interest”, and “Skip the whole life and invest the rest”. Well I can tell you, EVERYONE USES SIMPLE INTEREST. I hate people who think primerica is going to save their life with simple interest. They are being ripped off just because they are finally being explained on how interest works, and how primerica does it. Even though every other company in America is only allowed to sell simple interest loans as well.
As he continued explaining the products and his two week payment schedule and how it saves so much time. I interuppted him and said, not one mortgage company allows you to make a bi weekly payment anymore. He didnt understand what I ment. Now because mortgages are packaged and sold as investments in the market, that when a mortgage company recieves a half payment, they simply hold it in another account waiting for the second half to show up. Mortgage companies DO NOT POST HALF PAYMENTS. ( way over anyone at Primerica’s head) I dont care whom your lender may be call them up and ask for yourself. In essence what this will do is let you make an extra payment a year which is still good but every company allows you to make an extra payment as long as its a full payment or you could go with a novel idea just pay extra principal. Also when you just send them a check every two weeks you lose interest because that money is not doing anything for you.
The guy talking to me about helping me become a financial planner and help so many people out in the world, didnt know the first thing about finances. He only knew what he was trained to know. His only talent was recruiting everyone and living off of their hard work.
Final thought, Primerica is owned by Citi…. Citi stock is about 4 dollars a share…. Citi isnt a very well ran organization…. A not very well ran organization that runs Primerica…. A not very well ran organization that can only sell a poorly ran organizations products… I can keep going on and on with this thought process…
I was researching primerica to find out if they are a scam. If they have idiots like these people defending them. They are not a company worth working for. Most of you are uneducated or act uneducated.
This is for Dallas. If you already paid your money why not still get at least your life/health license and go from there? There are other organizations you can market with or sign up directly with some carriers.
@ Stephanie Villarreal the only idiot here is YOU!!! I will not let some broke employees sit here & talk crap about this great company!! @ Chronies get your facts right! We are no longer part of Citi we went public on the NY stock exchange on April 1st, this yr & already broke records!! We are Federally Regulated & don’t let whomever join the business, for you information we get to choose who we would like in our business (just like your job does) & they have to pass the background check! Even if you want to get your business license for whatever kind of business you have to pay the state no matter what people!! I’d rather pay $99.then have to pay over 500k for a franchise & still not even own it!! We do what is best for the consumer 100% all the time!
…they are just a financial services company. Probably no better or worse than others. 100% commision jobs aren’t for people without significant and successfull sales experience. Probably why I won’t take the job if they offer it to me.
Warburg-Pincus the 14th largest private equity firm in the WORLD spent 10 million dollars investigating Primerica. For over 90 days 347 private investigators, forensic accountants, and a such went over this “scam” with a fine toothed comb. The result, they invested 230 million dollars in us at the IPO price. We were 30 times over subscribed and many of the companies you people might revere wanted to get in on the ground floor of this opportunity. But, still someone has a bad experience or knows someone who didn’t make it in the business (probably didn’t bother to get licensed either) and here come the crap storm. We are the #1 IPO of 2010, Jim Cramer of mad money said it point blank, “Primerica could teach GM and the rest of the bunch about how to run and business and go IPO”. So unless you have some serious counter agruements backed up with facts from viable, respected organizations like stop peddling your problems with Primerica as fact. I have worked here in Dallas for more than 15 years in sales and have been very successful, but at the end of the day my salary and commission was all I got. The company got the equity. This is not for everyone, thank goodness, or it wouldn’t pay so well. But, let me ask you nay sayers, where are you going to go and make your nest egg? Back to your corporate job with 2-3% annual raises in a 4-5% inflationary ecomony? Get real. Primerica is an opportunity, a vehicle to allow the other 95% of the country a chance of achieving a better life. All in all for $99 you can get a great financial education and quit or G.O.Y.A. and work to have a life. If not, don’t complain that you never got a break or had a shot. Most people are just so hard-wired into the corporate Matrix they can’t see the reality before them. You are a slave or prisoner to your job, just doing time until you find something else or they let you go. Here is another stat for you more people have made more money with Primerica than with any other company in the US in the past 45 years. We pay 25 million a day in death benefit claims, we pay the families of our fallen patriots fighting in wars without hiding behind the war clause.(what other insurance company does that consitently?) We paid during Katrina, 911, and the list keeps growing. We do the right thing everytime. So unless you really know of what it is you speak find another drum to beat.
Kevin – Your statement about more people making more money with Primerica than any other company is an outright lie. So I’m just going to point that out and then move past that to the real issues. The issue is also not whether the company pays on its insurance policies as required to by law. We’ll just assume that they do.
What I’m attacking is the MLM business model. This model makes tons of money for the owners of the companies, which is why it is used so often. From a money-making perspective, the investors in Primerica have probably done well for themselves. The problem is with all the people in the pyramid who are being taken advantage of.
Guess what? You don’t own anything with Primerica. You’ve sold a policy or product to someone, you’ve gotten a much smaller commission than you would have gotten with a traditional insurance or finance company, and you own nothing. Primerica owns the customer. Just like with that job, you have nothing at the end of the day.
Recruiting is pushed because that’s how Primerica makes most of its money. It’s from thousands and thousands of recruits, who each make very little off what they sell. You don’t get properly rewarded for selling a financial product, because Primerica pays out multiple levels in the pyramid. Almost no one can make a living as part of the pyramid. But it survives because of the hope that you might make a living.
MLM is all about false promises and smoke and mirrors. Primerica is just one of many sleazy MLM companies.
Sleazy, smoke and mirrors, all things that make companies that do well at their strategies look bad to those who take your opinion as fact. I notice you did not refute anything will factual evidence. Is it because you don’t have any or you are on such a mission against Primerica that you can’t see were you are wrong. There is plenty of great news and press about the company, yet you continue down your path. Obviously, from your earlier posts you are in the industry so your credbility or your basis is appearent. Like I asked before where is your 3rd party proof or validiation? Your 3rd party research? As usual, just like the 35000 websites about why I hate Christmas and the conspiracy theory against the addictive nature of Starbucks coffee, people will always find a way to shoot at something successful. And stop calling it a pyramid. Pyramids are illegal and we are in one of the most regualted industries in the country. Multiple state and federal licenses are required to conduct business. We don’t get 1 dime for recruiting someone into the business. That is the essence of a pyramid, money for recruiting. And as far as recruiting goes I assume your current company didn’t recruit you? No job fair? No call from HR? You just walked in, filled out your paperwork and began collecting money. Please. Say what you will, but let’s get factual not just your opinion. I await with great anticipation of the new information you will bring to the table.
Kevin – The press that Primerica gets for itself is of no concern to me. That is spin and has no credibility. I have been studying multi-level marketing for years now, and the FACTS that you demand about Primerica and other MLMs are all over this site. I invite you to take a look at these facts.
Our government allows MLMs to exist because these companies pay millions of dollars per year for lobbyists to sit in Washington DC and ensure that their business model is never outlawed. I haven’t said Primerica is illegal, but I have said many times that the MLM method is abusive and predatory, and ought to be outlawed.
Recruiting for a real job is different than recruiting for a MLM. Multi-level marketing companies live and die by recruiting thousands of new bodies each year who take the place of the 90+% who leave the companies. These recruits don’t individually create much money for the company, which is why so many are needed. Recruits in MLM pay to play, while recruits to legitimate jobs are paid for their efforts. This is one big difference. Almost everyone in MLM loses money, while everyone in a job MAKES money (at different rates of pay, of course, but still pay).
MLMs are careful not to pay directly for recruiting, because that would violate the letter of the law. But they rely on recruiting for their existence. Without recruiting, an MLM dies.
And no, my company did not recruit me. I started the company.
I see trying to get FACTS out of you is useless. You believe MLM’s are bad so be it. I believe people who distort every opportunity with generalization are the just paying themselves lipservice. My last question does the average middle class american citizen stand a better chance at a corporation or in business for themselves if they wish to retire or have any quality of life? Employee or owner, which one?
Kevin – The facts you seek are all over this site if you can be bothered to look around. I see no need to retype what I’ve already typed over and over. I have done tons of research on MLMs, and many of my findings are here.
MLM is not “in business for yourself.” In MLM, you own NOTHING. All you have is the right to market substandard products or services under a contract that the company can terminate at any time without compensating you in any way. That’s not a business. That’s being a salesperson for a business opportunity scam in which almost all participants lose money.
Tracy,
Where were you 15 years ago when I was sucked into Primerica, WMA and WFG! You are correct. I was a top 100,000 ring earner for WMA/WFG. WFG was sold to Aegon. YES ……. my team was taken from me……. when I was not willing to work under Xuan Nguyen (at that time, the company was divided into two divisions – Monte Holmes was the leader for the other division.) I hired an attorney, only to find out that I signed a VERY WEAK contract and the company has complete control over your so called “business” and can do whatever they please. My direct up-line (CEO) was terminated due to compliance reasons…. and without the person you have signed a lease for an office – you can imagine what happened to me! I was fed to the sharks! Everyone was grabbing at whatever they could…my office furniture…… my chairs and equipment I used for training…..and then my team. If your a single woman in a “man-driven” business like this one…….Watch out!!!
After 6 months of being inactive and losing my team I started from square one. I was still making overrides….but only on my own business…..not what I had built for 15 years. I was given the role as Branch Manager again…… but this time…….I was managing other agents – not my own agents. I was told that I would be approving business for the top producer in the company…and he was………..all the points and RECRUITS…..to get his promotion. To make a long story short – I caught him red handed churnning and doing OSBA (outside business activity) without prior approval – When I reported him to our district compliance officer – I was only told by my leaders (I can compare this to Wall Street and the SEC)….not to get involved…..soon to find out that ALL LEVELS in the chain needed the points (production) for their promotions!! He wrote 3 policies w/ the same client (WRL, Pacific Life, Zurich Kemper) with the intention of cancelling at least two. I was was wasting my time, money and was set up to be held accountable for his bad business. At that point I stopped approving his business and decided to go work elsewhere. So many red flags – his persistency was not more than 30% – churnning – OSBA – and being cheered on by his UPLINE to keep up the bad work!
For the past 4 years I have been a paralegal. If I ever choose to get back into financial services – it will be with a professional organization with a good reputation, and NOT with an MLM business. Read your contract – it will tell you in legal terms it is NOT your business! If you calculate the time you put in……..all the weekends and working 14 hour days………..Take my advice……IT’S NOT WORTH IT!!!!!!!!
Let me tell you that Primerica is very misleading. I was an agent for 15 years, reached RVP and got the ring. Some things came to light recently that lead to my resignation:
1. To have the best contract you must be (FULL – TIME).
2. RVPs (best contract) must open and maintain an office at their own expense
3. 2 year no contest period if you leave (they are NOT your clients)
4. RVPs can NOT be employed anywhere else even if it has no conflict to Primerica business.
5. Captive products – Term is expensive! 27 yr old Female non tobacco, 750K, 20 yr term. Primerica – $67 / American General – $26
6. Declines or rated policies leaves the clients NO options.
7. ONLY 1 annuity product.
8. Must hit certain number every month as RVP or LOSE that production.
I can go on and on but isnt that enough?
I dont hate Primerica, they have helped me become who I am today BUT at a very high cost. The good news is I got out.
They breed on control:
-Everyone else in Financial services are crooks.
-Everyone with a job is unhappy.
-Primerica is different from other MLMs
How much money has ANYONE really made when you net out expenses (office, seminars, retreats, Tshirts, gas, etc.)?
Look at this link:
http://www.freecourtdockets.com/docketsummaries/Shane-E-Perry-and-Dannene-L-Perry-1-10-bk-16295-California-Eastern-Bankruptcy-Court-Docket-Case-Summary-78848.htm
They are the poster children of Primerica and they are financially devastated.
People are after “the dream” in Primerica but the sad truth is most people are living the nightmare. The majority of friends I have developed in Primerica are RVPs and heroes of the sales force. They are living a lie. Barely able to make office rent every month, creditors on their back, no savings BUT having to sell the dream every week at the opportunity meeting while they are starving.
I got tired of living a lie.
PLEASE keep an open mind and see what else is out there if you want a career in financial services.
Last thing: Ask yourself this question – If Primerica is so good than why doesnt anyone come back after they leave?