World Financial Group - coming soon to a friend near you

[Slava]

Originally Posted by Derek Sutton

Does Investors Group have a bad rep to? Thats who I'm mostly with and have been happy with them (our advisor anyways)

I'm not going to get into that kind of thing here, and would prefer to remain above that. They basically have all proprietary products though, and in general that doesn't enamour me.

[Derek Sutton]

Originally Posted by Slava

I'm not going to get into that kind of thing here, and would prefer to remain above that. They basically have all proprietary products though, and in general that doesn't enamour me.

Fair enough, I can use google, although I'm a little apprehensive to now...

[MillerTime GFG]

WFG has no limit to how far they will go...

As most of you may/may not know, I'm a mortgage broker. About 2 months ago, I had a WFG "advisor" (and I use that term loosely for WFG) contact me to setup a meeting. Knowing full well what they are all about, I asked what the purpose of the meeting would be. I asked her if she is looking to recruit me. She said no. I then asked her if she was looking for referrals or was looking to send me referrals. She said she was looking to send referrals.

Like I said, I know how WFG operates, but I also know that they still do a lot of volume, and I know other brokers that receive a lot of business for them. So, I agreed to meet her. After all, I was just going to be doing mortgages for their clients, not actually involved in the other stuff.

Sure enough, I show up for the meeting and gave my 5 minute pitch/value-add and then realized two minutes later what their true intentions were. Even though she blatantly told me they were not trying to recruit me, that ended up being their full intention. There were two of them, and they went into their full presentation on how much money I could make, bla bla bla. I had to cut her off mid-sentence eventually and told her to "save me the speech". I then proceeded to tell them that "it's people like you that are the reason WFG has the name that it does".

I then wrote her a strongly worded email to her and felt better about myself.

[undercoverbrother]

I am sure Western Financial Group are happy that WFG is being used for these clowns.

[MoneyGuy]

Originally Posted by Slava

I can tell you that Manulife and these other two are nothing alike.

Manulife isn't; I have no idea what Mannulife is, however.

Seriously, it's ignorant to lump a reputable firm like Manu in with these goofs. However, this is the Internet and people who are clueless can always state an opinion, no matter how ill-founded.

WFG and Primerica people are generally goofs. As bad as Primerica is, WFG is worse, in my view, with their wholesale use of leveraging. I am so looking forward to the day when you have to have a CFP or equivalent qualifications to hang a shingle as an advisor. Then those goofs will either be drummed out of the business or forced to elevate their skills and competency. Slava and I can then meet in Red Deer to party.

[MoneyGuy]

Originally Posted by Derek Sutton

Does Investors Group have a bad rep to? Thats who I'm mostly with and have been happy with them (our advisor anyways)

I have lots of experience with IG. They are essentially sellers of proprietary, high-cost products. Their advisors are well trained but the other stuff puts me off. PM me if you want more information.

[ken0042]

Originally Posted by MoneyGuy

Seriously, it's ignorant to lump a reputable firm like Manu in with these goofs. However, this is the Internet and people who are clueless can always state an opinion, no matter how ill-founded.

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.

[MoneyGuy]

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, I'll address this. Me saying the guy is clueless means he obviously has no idea of the topic on which he commented - saying Manulife is like WFG.

I'm not skilled in mechanical matters but if I came on here and said a Toyota or some other well built car is like some (name your own POS car here), I'd expect to be called on it. They all have four wheels, an engine and transmission, so they must all be the same.

Manulife is a large, secure, professional organization that is no more like WFG than a Toyota or other well built car is like (again, insert your favourite POS make here).

Many WFG "advisors" (there are a few decent ones) are poorly trained, advisor motivated instead of client focused, MLM salespeople. At their worst, they inappropriately use leverage, sometimes to the destruction of their clients who don't know any better and fall for their pitches.

Disclaimer: Both Slava and I are Manulife advisors.

Personal story: I have a client who came to me years ago after dealing a WFG "advisor." Before I look at a person's portfolio, within five minutes I can infer lots about their situation. Long story short, the WFG guy had them borrow $450,000 about five years before and they has bought a pretty high-risk portfolio. When they came in they were very upset because they still owed the $450K but the portfolio was under $300,000. We took over their portfolio, adjusted the investments and (not my brilliance but the markets co-operated) and we got them back up to about 385K before we liquidated it. I actually suggested they sue the WFG guy. They declined.

At their best, probably 90% of WFG and Primerica "advisors" are lousy advisors who have no idea. At their worst, they can be very, very dangerous. Walk into one of their offices and ask to be hired and they'll be all over you. Walk into a reputable firm and ask the same thing and see what happens.

I'm off topic. Please understand that this is an enormous peeve of mine, because they sully the whole profession. Don't lump the good, client-focused advisors with those others.

[rain_e]

Originally Posted by MoneyGuy

I actually suggested they sue the WFG guy. They declined.

It's good they declined because it would be a waste of money. It's the same as one of your clients suing you. Advisors have clients sign waivers for this stuff.

The unfortunately part of WFG like stated are the advisors that are focused more on recruiting than providing a service. Even though the service they provide is like most advisors from a variety of companies that focus on having their clients go into high cost investments so they make the larger commissions.

[Slava]

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.

[MoneyGuy]

Originally Posted by rain_e

It's good they declined because it would be a waste of money. It's the same as one of your clients suing you. Advisors have clients sign waivers for this stuff.

The unfortunately part of WFG like stated are the advisors that are focused more on recruiting than providing a service. Even though the service they provide is like most advisors from a variety of companies that focus on having their clients go into high cost investments so they make the larger commissions.

Actually, it's not as futile as you think. There is a lawyer in Saskatchewan going around advertising to get investors to sue their advisors.

And clients don't sign waivers.

If that had happened to me, at the very least I'd be talking to the guy's compliance department. There have been cases where companies have made up the losses. I'm not saying they would have, but I would have started there. In fact, the best example of this happening did involve Manulife and the firm did make up the losses when it was determined that a product was used inappropriately by advisors and the firm didn't research the product properly. I can't recall the product but Slava may know.

[Minnie]

I worked for RPFL a number of years ago (before they merged) and Primerica came up a number of times, and it was never a positive conversation.

My husband's cousin was about to get caught up with Primerica a couple of years ago, and as I've mentioned before, we went back to one of my old advisor friends and got her to pull us a bunch more information than we had to hand, and passed it on to him. Thankfully, he didn't end up with them.

[Flabbibulin]

Can't it be summed up by saying WFG is a MLM, while these other examples are not?? That's really all you need to know about the legitimacy of WFG as far as I'm concerned. People may have had bad experiences with Manulife or Investor's Group, but comparing them to a MLM makes no sense imo.

[Slava]

Originally Posted by MoneyGuy

Actually, it's not as futile as you think. There is a lawyer in Saskatchewan going around advertising to get investors to sue their advisors.

And clients don't sign waivers.

If that had happened to me, at the very least I'd be talking to the guy's compliance department. There have been cases where companies have made up the losses. I'm not saying they would have, but I would have started there. In fact, the best example of this happening did involve Manulife and the firm did make up the losses when it was determined that a product was used inappropriately by advisors and the firm didn't research the product properly. I can't recall the product but Slava may know.

Wasn't that called Portus or something like that? It was a bit of a different scenario, but I think that is what the product was about 15 years ago?

[MoneyGuy]

Originally Posted by Flabbibulin

Can't it be summed up by saying WFG is a MLM, while these other examples are not?? That's really all you need to know about the legitimacy of WFG as far as I'm concerned. People may have had bad experiences with Manulife or Investor's Group, but comparing them to a MLM makes no sense imo.

Nailed it!

Folks can google terms like Primerica or World Financial Group with the word scam, make some popcorn and sit back and enjoy.

Originally Posted by Slava

Wasn't that called Portus or something like that? It was a bit of a different scenario, but I think that is what the product was about 15 years ago?

Yes, it was Portus, and Manulife was a big seller. They made an error and made up client losses. I can't say for sure they made up 100% of the losses, but I believe they did. What are the chances that these others would do that?

It was very different but I was making a point about professionalism.

[Enoch Root]

Originally Posted by rain_e

It's good they declined because it would be a waste of money. It's the same as one of your clients suing you. Advisors have clients sign waivers for this stuff.

The unfortunately part of WFG like stated are the advisors that are focused more on recruiting than providing a service. Even though the service they provide is like most advisors from a variety of companies that focus on having their clients go into high cost investments so they make the larger commissions.

I don't agree with that.

Advisors have a fiduciary responsibility and, even if the client has agreed to the investment decision and signed off on it (usually the case), the advisor is held to a different standard as a professional and can very much still be liable. Their representative firm also - even if the firm isn't aware of or doesn't condone the actions of the advisor (as the Manulife advisors here likely well know).

[rain_e]

Originally Posted by Enoch Root

I don't agree with that.

Advisors have a fiduciary responsibility and, even if the client has agreed to the investment decision and signed off on it (usually the case), the advisor is held to a different standard as a professional and can very much still be liable. Their representative firm also - even if the firm isn't aware of or doesn't condone the actions of the advisor (as the Manulife advisors here likely well know).

So how responsible is an advisor? I'd gladly hire one to try and make me money and if he loses any of it I'll just sue him?

[Enoch Root]

Originally Posted by rain_e

So how responsible is an advisor? I'd gladly hire one to try and make me money and if he loses any of it I'll just sue him?

Well it's a bit more complicated than that. But if you can show that the investment decisions were at least contrary to your needs - say you're retired and they had you leveraged for instance - then you might have some legitimate grounds to move forward.

Obviously, if there is any kind of fraud or misrepresentation or anything of that nature, well you're really rolling now.

But if your savings have been completely wiped out, there is a chance you could make headway on that fact alone, pleading to the courts with the poor me angle (though obviously you have to lose a whole lot of your savings first, so...)

At the end of the day, the court has to make a decision. And it is entirely within the realm of possibility that they make a decision that might not seem fair going in.

[macker]

It is kinda sad for the financial system in general that a company like WFG can continue to exist and get not only investors suckered in but also advisors. It is shameful that they recruit at Universities and Colleges. Are there any satisfied investors/advisors out there? Anyone last more than 5 years with them as an advisor or investor? Most of us have a friend/relative/acquaintance that has been with them at one point or another but I would be very surprised to hear any long term good news stories. Scary to think that WFG was once owned by Citi and aren't they still owned by Aegon

[MoneyGuy]

Originally Posted by rain_e

So how responsible is an advisor? I'd gladly hire one to try and make me money and if he loses any of it I'll just sue him?

That's not we mean at all.

Scenario 1: Your parents are 70 and low-risk, low-knowledge investors. Some guy comes in and gets them to borrow on their mortgage-free house to buy a $200,000 portfolio of high-risk stocks. Market tanks and 10 months later it's worth $100,000 so they sell because they're laying awake at night with worry. He should be sued and the clients would have a very good case.

Scenario 2: You're 35 and a risk taker. You're one of the elite CP earners with an income well into six figures. You ask your advisor for a portfolio of high-risk stocks. He has lengthy discussions with you detailing the risk, all documented in his meeting notes. He fills our a KYC profile that you sign off on. Your $200,000 drops to $100,000. The advisor has done everything right and you have no case.