Author Topic: Multi-Level Marketing (MLM)/Network Marketing  (Read 35685 times)

Goldielocks

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Re: Multi-Level Marketing (MLM)/Network Marketing
« Reply #150 on: January 09, 2017, 02:54:53 PM »
Has anyone here ever had any experience with financial type MLM?

I'm not 100% sure if they would classify but the general notion is that you have a sit-down with an "adviser" they would take down a bunch of information then help you with savings goals and retirement planning, this portion was actually well executed and thorough. The kicker here though is that all of their funds are ridiculously high fees (2.5%-3%). After the meeting they offer an invitation to an investing course, free of charge and hosted by the company, then try to sell you on becoming an adviser for the company. If you get to a certain level then you can open your own office and have advisers working for you.

At least that's how it was phrased, the gimmicky portion is the returns that they are promising and the compensation structure for the advisers. I.e.
  • A)"We can get you returns of 12%"
  • B)"You don't pay us, we are compensated by the banks at zero cost to you".
At the end of the meeting they also as for names and contact information of any friends that would be interested getting financial advice, if you give them the name of X number of friends you get an investing/wealth management book.

For point A it turns out that yes, the fund has returned 12%, once, in 2009.... SIGNIFICANTLY under-performing the market....

As for point B, it turns out that it is technically correct, you don't pay them directly but the funds are all such high fees you are paying the banks an outrage amount that the banks kick back a % to the adviser.

It's a tough situation as it's a colleague/friend of DW's got into it, he sat down with us and many friends and I know some invested with him. The crazy fees that they are paying are surely eating up their returns. However not being formally educated in investing, and being somewhat of a closet mustachian I can't really give advice to anyone nor would I want to overstep any boundaries with friends by bringing it up.

Just looking to see if anyone has ran into this before?

Yes, last fall, a friend (who was unemployed) was sold into joining the system, and as a favour, I sat down for an intro session with her mentor, and then asked questions and did a lot of on-line research for her to suss it out.  I also looked to complaints with the securities commissions and licensing bodies...  (there had bee some against the predecessor company, but the 2 year old newer company had a somewhat clear record so far).

Bottom line -- many sales persons can make quite a  lot of money at this, with only modest education or in-Canada work experience, but you have to make a lot of calls and contacts.  They talk about 10 -10 -10 or something, like that.  It works out to something like 100 pitches a month, to get your 3 subordinate sales reps, and you have to keep at it, as your sales reps and your own clients may not stay and be impactful.

It is a LOT of work.... but people with good networking / people meeting skills and a large deck of contacts can do very well, all things considered.

The Mutual fund and other licensing training was offered by a third party company, and reputable.

SUMMARY

My advice to my friend was to take the training and get the licenses (the mentor was going to pay for her), and take the job, if she does not mind working sales contacts, but after 2 years of experience, look to switch out, because for that amount of effort and work, she could get on with a big 5 financial institution.   She did not have a lot of other employment prospects at that time.

Because the MLM levels were not capped, her income would likely cease around $60k per year, even with long long long hours sourcing and pitching prospects, and for that type of licensing, work and effort, she could make far more with a traditional financial institution (but needed the proven work experience).

BUT - I told her "Do not put any of her own money into the investments as the rates charged were way too high", and it was up to her ethics if she wanted to sell a product to her family and friends that was very expensive compared to otherwise identical products out there.   (this company used to sell group education plans  like Heritage, as a primary product, for example, which are horrendous products today)
« Last Edit: January 09, 2017, 03:03:31 PM by Goldielocks »

dycker1978

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Re: Multi-Level Marketing (MLM)/Network Marketing
« Reply #151 on: January 09, 2017, 03:15:56 PM »
Has anyone here ever had any experience with financial type MLM?

I'm not 100% sure if they would classify but the general notion is that you have a sit-down with an "adviser" they would take down a bunch of information then help you with savings goals and retirement planning, this portion was actually well executed and thorough. The kicker here though is that all of their funds are ridiculously high fees (2.5%-3%). After the meeting they offer an invitation to an investing course, free of charge and hosted by the company, then try to sell you on becoming an adviser for the company. If you get to a certain level then you can open your own office and have advisers working for you.

At least that's how it was phrased, the gimmicky portion is the returns that they are promising and the compensation structure for the advisers. I.e.
  • A)"We can get you returns of 12%"
  • B)"You don't pay us, we are compensated by the banks at zero cost to you".
At the end of the meeting they also as for names and contact information of any friends that would be interested getting financial advice, if you give them the name of X number of friends you get an investing/wealth management book.

For point A it turns out that yes, the fund has returned 12%, once, in 2009.... SIGNIFICANTLY under-performing the market....

As for point B, it turns out that it is technically correct, you don't pay them directly but the funds are all such high fees you are paying the banks an outrage amount that the banks kick back a % to the adviser.

It's a tough situation as it's a colleague/friend of DW's got into it, he sat down with us and many friends and I know some invested with him. The crazy fees that they are paying are surely eating up their returns. However not being formally educated in investing, and being somewhat of a closet mustachian I can't really give advice to anyone nor would I want to overstep any boundaries with friends by bringing it up.

Just looking to see if anyone has ran into this before?
I have, I was actually a "financial advisor" for Primerica Finical services.  The MER was something like 4.65%.  I sold mostly term life insurance for them, it was not a good gig, and I did not make any money at all.  If you sold something and the customer canceled it any time within 2 years, you got a charge back for the whole amount you had been paid, so really no money could be made.

Saskatchewstachian

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Re: Multi-Level Marketing (MLM)/Network Marketing
« Reply #152 on: January 09, 2017, 03:48:42 PM »
Has anyone here ever had any experience with financial type MLM?

I'm not 100% sure if they would classify but the general notion is that you have a sit-down with an "adviser" they would take down a bunch of information then help you with savings goals and retirement planning, this portion was actually well executed and thorough. The kicker here though is that all of their funds are ridiculously high fees (2.5%-3%). After the meeting they offer an invitation to an investing course, free of charge and hosted by the company, then try to sell you on becoming an adviser for the company. If you get to a certain level then you can open your own office and have advisers working for you.

At least that's how it was phrased, the gimmicky portion is the returns that they are promising and the compensation structure for the advisers. I.e.
  • A)"We can get you returns of 12%"
  • B)"You don't pay us, we are compensated by the banks at zero cost to you".
At the end of the meeting they also as for names and contact information of any friends that would be interested getting financial advice, if you give them the name of X number of friends you get an investing/wealth management book.

For point A it turns out that yes, the fund has returned 12%, once, in 2009.... SIGNIFICANTLY under-performing the market....

As for point B, it turns out that it is technically correct, you don't pay them directly but the funds are all such high fees you are paying the banks an outrage amount that the banks kick back a % to the adviser.

It's a tough situation as it's a colleague/friend of DW's got into it, he sat down with us and many friends and I know some invested with him. The crazy fees that they are paying are surely eating up their returns. However not being formally educated in investing, and being somewhat of a closet mustachian I can't really give advice to anyone nor would I want to overstep any boundaries with friends by bringing it up.

Just looking to see if anyone has ran into this before?
I have, I was actually a "financial advisor" for Primerica Finical services.  The MER was something like 4.65%.  I sold mostly term life insurance for them, it was not a good gig, and I did not make any money at all.  If you sold something and the customer canceled it any time within 2 years, you got a charge back for the whole amount you had been paid, so really no money could be made.

Primerica is actually the company I was speaking of. I stupidly allowed them to transfer an old RRSP from a previous employer over to their stuff (before my MMM days). Now it is in a LIRA and currently trying to figure out how to get it out and just pay the fees instead of waiting 7 years for the fees to end. Luckily it was a small amount, about 2% of NW.

dycker1978

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Re: Multi-Level Marketing (MLM)/Network Marketing
« Reply #153 on: January 09, 2017, 03:55:47 PM »
Has anyone here ever had any experience with financial type MLM?

I'm not 100% sure if they would classify but the general notion is that you have a sit-down with an "adviser" they would take down a bunch of information then help you with savings goals and retirement planning, this portion was actually well executed and thorough. The kicker here though is that all of their funds are ridiculously high fees (2.5%-3%). After the meeting they offer an invitation to an investing course, free of charge and hosted by the company, then try to sell you on becoming an adviser for the company. If you get to a certain level then you can open your own office and have advisers working for you.

At least that's how it was phrased, the gimmicky portion is the returns that they are promising and the compensation structure for the advisers. I.e.
  • A)"We can get you returns of 12%"
  • B)"You don't pay us, we are compensated by the banks at zero cost to you".
At the end of the meeting they also as for names and contact information of any friends that would be interested getting financial advice, if you give them the name of X number of friends you get an investing/wealth management book.

For point A it turns out that yes, the fund has returned 12%, once, in 2009.... SIGNIFICANTLY under-performing the market....

As for point B, it turns out that it is technically correct, you don't pay them directly but the funds are all such high fees you are paying the banks an outrage amount that the banks kick back a % to the adviser.

It's a tough situation as it's a colleague/friend of DW's got into it, he sat down with us and many friends and I know some invested with him. The crazy fees that they are paying are surely eating up their returns. However not being formally educated in investing, and being somewhat of a closet mustachian I can't really give advice to anyone nor would I want to overstep any boundaries with friends by bringing it up.

Just looking to see if anyone has ran into this before?
I have, I was actually a "financial advisor" for Primerica Finical services.  The MER was something like 4.65%.  I sold mostly term life insurance for them, it was not a good gig, and I did not make any money at all.  If you sold something and the customer canceled it any time within 2 years, you got a charge back for the whole amount you had been paid, so really no money could be made.

Primerica is actually the company I was speaking of. I stupidly allowed them to transfer an old RRSP from a previous employer over to their stuff (before my MMM days). Now it is in a LIRA and currently trying to figure out how to get it out and just pay the fees instead of waiting 7 years for the fees to end. Luckily it was a small amount, about 2% of NW.
You have the option to transfer it to the same fund at a different institution.  I did the same thing when I was there.  I transferred it to the same fund at the Conexus I believe, then used their rules, which did not have the any fees, as far as I remember, to transfer it out to a better fund... 

jinga nation

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Re: Multi-Level Marketing (MLM)/Network Marketing
« Reply #154 on: January 10, 2017, 09:46:42 AM »
Has anyone here ever had any experience with financial type MLM?

I'm not 100% sure if they would classify but the general notion is that you have a sit-down with an "adviser" they would take down a bunch of information then help you with savings goals and retirement planning, this portion was actually well executed and thorough. The kicker here though is that all of their funds are ridiculously high fees (2.5%-3%). After the meeting they offer an invitation to an investing course, free of charge and hosted by the company, then try to sell you on becoming an adviser for the company. If you get to a certain level then you can open your own office and have advisers working for you.

At least that's how it was phrased, the gimmicky portion is the returns that they are promising and the compensation structure for the advisers. I.e.
  • A)"We can get you returns of 12%"
  • B)"You don't pay us, we are compensated by the banks at zero cost to you".
At the end of the meeting they also as for names and contact information of any friends that would be interested getting financial advice, if you give them the name of X number of friends you get an investing/wealth management book.

For point A it turns out that yes, the fund has returned 12%, once, in 2009.... SIGNIFICANTLY under-performing the market....

As for point B, it turns out that it is technically correct, you don't pay them directly but the funds are all such high fees you are paying the banks an outrage amount that the banks kick back a % to the adviser.

It's a tough situation as it's a colleague/friend of DW's got into it, he sat down with us and many friends and I know some invested with him. The crazy fees that they are paying are surely eating up their returns. However not being formally educated in investing, and being somewhat of a closet mustachian I can't really give advice to anyone nor would I want to overstep any boundaries with friends by bringing it up.

Just looking to see if anyone has ran into this before?
Ameriprise. Co-worker said his amazing financial adviser invites all clients once a quarter to a nice restaurant for an investment update and free wine and appetizers. And bring a friend or two, they're free. I went just for kicks. The wine is house cheap shite. Appetizers are more like nibbles. They keep very few out. And my technical questions were replied to this way: "That's a great question. I'll get back to you on that." I'm still waiting.... NOT!