Quote:
Originally Posted by ken0042
Instead of the broad insults, why not offer a bit of an explanation? You obviously know your financial stuff, so you'd be a great person to give a quick run down. 
It would be like somebody who isn't technical making a thread about something that is an IT related question. Instead of that person being told they are clueless, the techies would try to help them out. |
OK, here are a couple of issues I have with WFG and Primerica. Firstly, and this is a big one for me as a professional, is the fact that they not only allow, but seem to encourage people to work part time. This ties directly into their recruitment strategy. I might have posted this elsewhere, because it really is a terrible precedent. Would any other profession have people who work a full-time career during the day and at night offer professional services? In my not so humble opinion, people should take planning for other peoples retirement seriously. That means working full-time and a commitment to do the job.
I also have some issues with the propensity to use leverage. Its one thing for the right client who can bear the risk and understand what they are getting into, and lets push those people off to the side for a minute. I've seen examples of this where people are borrowing huge sums of money to invest because an advisor tells them its a good idea. To put it bluntly, there is an issue here which borders on a conflict of interest: its the orgasm of commission. The advisor is getting paid on that investment which is almost all into mutual funds, many of which are back-end loaded. In case you think, hey its risky and it isn't a big deal, let me give you a glaring example.
I was asked to sit on a panel to review the qualifications for advisors across Canada last year. In the process we had to review what skills and processes advisors would use. One guy from the WFG was there and I had to bite my tongue a number of times. His big strategy at one point was the RRIF meltdown. So lets say that you have a RRSP of $200,000. The plan is to borrow enough to pay say $20,000 a year in interest (lets call that $500,000). You invest the $500,000 and as you pay the interest you withdraw the RRSPs. Now the RRSPs eventually get to zero (in say 15 years, depending on the growth), and the $500,000 you had borrowed is worth who knows how many billions you get promised. Brilliant, right? Sure, as long as it works. If it doesn't though, you have people who are near retirement age (otherwise not many people care to deal with upcoming RRIF income), who have liquidated an RRSP account and have purely borrowed money invested to show for that. Thats simply a nightmare scenario.
I wouldn't equate Investors Group directly to these types of practices.