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?