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Fraud relating to Variable Universal Life Insurance - Company - World Financial Group
By: Ruby Thang
Date: 3/8/2004 2:30:15 PM
About two years ago, I was introduced to a company called "World Financial Group". After joining the organization, one of the financial agents performed a financial analysis for me and talked to me about a product called the VUL - Variable Universal Life Insurance. Being fresh out of college, I was not very familiar with the different financial products. The agent misrepresented a product called the "Roth IRA" to convince me to purchase the VUL. He told me that one is not allowed to take any money out of the Roth IRA until 59 and a half, but in reality you are always allowed to take out the principal amount without any kind of penalty or tax. Also, there are other situations where you could take the money out without tax and penalty. The agent also did not look out for my best interest, by finding a product that was most suitable for my situation. He also failed to point out the very high sales load that the VUL has in the first year. Lastly, he was selling me the VUL which is an insurance product as an investment which is ILLEGAL. He was withholding information and making false statements to convince me to purchase this product.
I would also like to point out that the "World Financial Group" company at the Houston branch that I was at does not look out for the best interest of their clients. They mainly push the sale of the VUL because it produces the highest amount of commissions. After realizing this fact, I decided to quit working for them, because I felt that they were not very ethical. They were feeding people lies and more lies. I strongly feel that something needs to be done about this. People who barely make enough money to have an emergency savings are being told that they need the VUL. That is just not right. In reality what they need is a Roth IRA and term insurance.
After realizing that the VUL was not the best product for me, it was too late to recover my money. The VUL was from an insurance company called "Western Reserve Life". The representative at "Western Reserve Life" told me that I was not allowed to recover my cash value in the amount of $3000.
I am writing today, because I know for a fact that the agent who sold me this product committed fraud by misrepresenting a financial product, withholding information, making false statements, and not looking out for my best interest. I would like to recover my cash value of $3000.
I still have all the documents of the VUL policy. Please let know what my next step is to recovering my money from this insurance/security fraud. Thank you!
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They found my resume on Monsters.com and told me to come to an information seminar. It was a "rare" opportunity because a big wig from the company would be speaking.
I went to the seminar and there was a room full of people and the sales pitch began. I was intrigued because I was already licensed and I wanted to get into financial services because I had a background in finance.
I had an interview with the branch manager who told me I needed three things. (1) INTEGRITY (2) Work Smarter not harder (3) Work ethic
I possessed all three and so he said I would have to pay $100 for a background check because I would be an independent agent so I was responsible for the cost. Then next evening I went to my first evening of training. It was given by a young (25 year old) and the training was about marketing a leads. I have been in sales for 15 years I wanted the financial training they talked about at the seminar. We then got a piece of paper with the compensation plan. The only way to make more money was to bring 3 people in underneath me. MLM? Pyramid? I think so.
Then next day I met with this guy one on one because he was my manager. The first thing he had me do was write as many names as possible on a sheet of paper for people who would be possible leads. I started to probe him about questions relating to finacial services. I was talking about term life. He stated that it was best to sell VUL policies because it paid a higher commission. That was all it took for me I knew something was up.
I got home and did some research and realized it was a MLM and discovered the WMA-WFG fiasco as well. I emailed the branch manager and stated exactly why I didn't want to sell for the company. I also found out that background checks are to be paid for by the employer regardless if you are independent. I also told this to Todd. He said that he told me it was a non-refundable administration cost. For what? I didn't get anything. California law also has a three day right to rescind law. At that point he gave me the corporate office. They were no help either so now I am filing complaints with the better business bureau and small claims court. It isn't about the money but the principle and dishonesty and I want others to know. I am just glad I realized before I got sucked in. I spoke with several successful financial planners about VULs and they say it is better to invest in other vehicles and get term life to cover death. Which is really what life insurance is about.
Anyway that's my story. They didn't get the names I had written down so thank God none of my friends and family will be subjected to their sales agenda.
Teresa - Murrieta, California
U.S.A.
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TO the employee who defended World Financial Group, I'm not sure how long you've been with the company, but you failed to mention the history of WFG.
Years ago, it was called WMA and WMA Securities. WMA does heavy recruiting to spread the word of the company and " sell the dream " as they elegantly put it. They also insist that each new member open a VUL contract. For those not in the field, it is an insurance policy. They marketed this product as their flagship product, as an investment vehicle ( big no-no! ) and every new member is expected to open one, regardless of age. The higher the death benefit on the policy, the higher the commission paid out.
Once the new recruit obtains his/her licenses, then they are able to work for WMA Securities.
I have attended their meetings, trainings and retreats..and have seen hundreds of "agents" who just graduated from high school representing the companies you mentioned.
This is a powerful company, but their original plan to take financial services to the public on a mass scale has backfired. There are certain satellite offices where they focus strongly on recruiting and getting each member to open a VUL that they forget all the technical training that is involved in preparing someone's financial future. I have seen that most of the agents don't even pick up the financial papers or know what an index fund is.
personally, I would not trust anyone from WFG, formally WMA Securities. Although they mean well and are driven to succeed, they're attention is definitely not to guide someone through their financial goals. That can only come with many years of experience, not from attending weekly meetings at the office on how to recruit and the Rule of 72, DCA and all the other stuff one can read in Chapter 1 of any business book.
Lastly, for now at least, you failed to mention how many times the SEC took a close look at WMA Securities, how the company was banned to hold these pow-wows, retreats, meetings solely for the purpose of pumping people up to go recruit, sell the dream and convince clients VUL is actually an investment product. If it is an iinvestment vehicle, why do the agents need an insurance license? That was the reason they had to change their name. Just like Primerica and Equinox is the same company, but had to change names to clear the bad reputation.
No doubt it makes people rich, unfortunately, many have broken laws to get there, many have "fake it 'til you make it" and some have been barred from obtaining any kind of license by the SEC, Dept. of Ins. permanently.
To be fair, I invite anyone curious to go check it out for themselves. If it doesn't feel right, stay away, don't give them your money and do not refer others to them. If you do see something you like, then maybe it'll work for you. Good luck everyone.
Kim - Southern California, California
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