World Financial Group, popular by the name WFG, has become a source of income for many in the United States, Canada, and Puerto Rico. While many consider it a scam, the business has been expanding since its foundation and the network is a huge one.
Some aspects often go unnoticed by those who take part in their network. While some things about WFG are legit, a few of their schemes are just a scam to get money from their customers. Here are a few things to inform you of its schemes before you invest any amount.
What is WFG?
The World Financial Group is a platform run by professionals in the field of finance. This multi-level company was founded in the year 2001 with a mission to guide people in planning a financial legacy for their present and future. The company runs with a network of financial advisors, who they refer to as “Agents”. Advisors help clients plan their investments and retirement, buy the right insurance, and deal with savings.
The agents are licensed and have been helping people build business strategies that can grow their money. Company headquarters is based in Georgia, Atlanta, and with the help of a network of distributors, WFG has been selling multiple financial products to its clients, including insurance and investments.
How Are the WFG Agents Earning?
WFG works on a multi-level marketing scheme (MLM). In this type of business structure, investors usually hire a few distributors and agents, and these agents are then required to bring in more agents or distributors into the business. The more agents you bring in, the more your commission will be. The amount you earn at a multi-level company like WFG depends on the number of products you have sold for the company and the number of new recruitments you’ve secured.
At WFG, you earn money in the form of commission only when you sell a financial product or when the new agents you recruited sell some product.
The Problematic Pyramid Scheme
Somewhere in all their business strategies, WFG is hiding a pyramid scheme of business. So, what is a pyramid scheme? This scheme works on the recruitment of more and more members to the company. In this scheme, the initial investors are the ones who earn a modest amount, while the agents at the lower level of the pyramid do not earn much.
A pyramid scheme is not the preferred one because it is sure to fail in the long run. It is not possible to recruit members to a program forever, as eventually, the approach will fail. Also, this type of business delivers a high return to only top-level investors for a short period.
Getting Customers at World Financial Group
WFG gets customers in two different ways. When an investor recruits an agent, he also sells the products to the agent. The agent then purchases more from the company and is, therefore, a customer. Every time an agent hires new associates, they are forced to buy the products sold by the company. These agents are also selling the products to other potential customers who are non-associates. Hence, the agents are customers who get more customers for the company.
When an individual joins as an agent, he/she is required to list out all their family and friends and sell WFG products to them or recruit them.
Issues with WFG Business Model
The company has been running successfully for two decades now, which implies their pitching is effective and is drawing customers into the network. However, there are certain issues in the way this company works.
- The company makes pitches that can be highly misleading. They conduct events to explain their strategies where the stress is always on the recruitment of more and more people. They tell you to recruit three people who will bring in three more and so on.
- They convince listeners that there will be hundreds of other agents working under them, and this means you will be earning for every sale they make.
- The WFG advisors do not have the expertise that properly trained financial advisors have. The company even hires agents with no experience. At WFG, most people have no background in finance. Hence, taking the advice of agents at WFG might not be the best option for you.
- The MLM model of business does not allow fast growth for agents. This model makes it difficult to improve your position and it might take a long time before you start earning a good amount of money.
- If you are interested in WFG, you cannot directly enroll yourself. You will have to contact an agent, make an appointment, and then attend the events they suggest. They also conduct a face-to-face meeting to explain the schemes.
- At events, WFG speakers present content in a manner that makes you feel that you know nothing about finance, or you have the wrong knowledge. They promise to educate you so that you can earn from insurances, taxes, mortgages, and other investments. Different agents give their testimonials about how they make loads of money using the strategies taught at WFG.
- The information that advisors provide is very vague and can be found on any online resource. The education is on a macro-level, which is not very profitable for the customer.
- When recruiting new members, agents promise to tutor you to get your broker’s license. To register as an agent, you will have to pay around $140. The licensing material will cost you another $200. An overall investment of $500 is required to become a license holder. This is just a tactic to earn money.
- At WFG, you are given a colored jacket based on your position in the company. At the starter level, you are given a blue jacket. This creates divisions within the agents.
- Most awards earned by top-level agents are from the company itself. Recognition from any government or other notable financial institutions is missing, which shows the impression the company has in the market.
- Top-level agents give the impression that the “system” will bring in the market and fix any issue that occurs. This working of the system is kept a total secret from agents.
- The contract levels are also not satisfactory. For an agent, it is a mere 36% while for senior members it is 64%. These values are far less when compared to other companies.
The Positive Side of World Financial Group
The marketing and sales policy which has been implemented by WFG is an effective one. The number of sales is on the higher side, and there is a basic level of financial knowledge that beginners can get. They make sure every agent is awarded for the pillars they achieve. This provides constant motivation for associates.
Is the World Financial Group Legitimate?
The company might have a bad reputation online, but if you pay for a product sold by WFG, you will get it. Hence, WFG is a legitimate company. The company has been running for nineteen years now, which indicates the success of the system. However, WFG is associated with a limited number of companies, which means the options are restricted. Agents are under high obligation to recruit new people. So, whenever you want to buy a financial product through a WFG advisor, they try to recruit you as well.
There is nothing illegal associated with this Transamerican company, but you have to be careful with their recruitment and sales strategies. The initial investment is high, and the goals they set are unrealistic. You can always get a properly trained broker or go for other alternatives in the market.
