Join Early Retirement Today
Reply
 
Thread Tools Display Modes
Re: help! friend peddling WFG and VUL's
Old 01-05-2007, 02:26 PM   #21
Thinks s/he gets paid by the post
bright eyed's Avatar
 
Join Date: Jan 2007
Posts: 1,891
Re: help! friend peddling WFG and VUL's

yes brat, i think that is part of the problem in my approach.

it came down to whether or not she trusts him. i asked her why she doesn't use her own intellect...and she said she trusts him...so i think whatever material she reads will still be colored

but i do think that i have to try and present my information objectively and more dispassionately! :P
__________________
If i think of something clever to say, i'll put it here...
bright eyed is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: help! friend peddling WFG and VUL's
Old 01-08-2007, 09:08 AM   #22
Thinks s/he gets paid by the post
Jay_Gatsby's Avatar
 
Join Date: Oct 2004
Posts: 1,719
Re: help! friend peddling WFG and VUL's

Quote:
Originally Posted by bright eyed
yes brat, i think that is part of the problem in my approach.

it came down to whether or not she trusts him. i asked her why she doesn't use her own intellect...and she said she trusts him...so i think whatever material she reads will still be colored

but i do think that i have to try and present my information objectively and more dispassionately! :P
It sounds like she trusts the cousin more than she trusts Bright Eyed. That's the fundamental problem. The solution, therefore, is getting her to trust Bright Eyed more than the cousin. So how do we do this? Trust is an emotional act, not a logical one. All of the carefully-explained financial strategies in the world won't establish trust, nor will they usually undermine someone's trust in a person. Bright Eyed needs to come up with the 30-second "elevator speech" that appeals to her emotions, not her financial sense (or lack thereof). This is a difficult proposition, since the speech cannot -- under any circumstances -- personally attack the cousin's character. That will only cause her to jump to the defense of the cousin and close her mind to the possibility that he could be leading her astray.

The best way that I can see is to get a look at her financial documents, do an analysis, and then tell her point blank exactly how much she will be losing if she follows the cousin's advice. Dollar figures usually don't lie (unless you're a CFO), and everyone understands dollars. Forget about how you arrived at such dollar figures. She won't be in the right frame of mind to understand, nor will her mind even be ready for such information. Just give her the bottom line numbers, and then let those sink in over a few days or weeks.

Her first step after hearing your numbers will be to run to the cousin for reassurance that those numbers are wrong, and that she couldn't possibly be losing that much money. Instead of giving real answers, the cousin will give her all kinds of emotional platitudes to ease her mind, (e.g., he's a "professional" and you're not, he's family and wouldn't do anything to hurt her, etc....) After meeting with the cousin, she'll come back to you with a look of self-assurance, and will probably repeat what the cousin told her. Be ready for this with a series of questions that will chip away at this self-assurance, such as "did he explain .....", or "did he tell you that you could be making more money if you did X, Y or Z", etc..."

Your whole task her is to break the spell the cousin has cast over her and other people. Don't paint him as evil, just ignorant of the truth.
__________________
He had one of those rare smiles with a quality of eternal reassurance in it . . . It faced, or seemed to face, the whole external world for an instant and then concentrated on you with an irresistible prejudice in your favor. -- The Great Gatsby, F. Scott Fitzgerald
Jay_Gatsby is offline   Reply With Quote
Re: help! friend peddling WFG and VUL's
Old 01-08-2007, 09:38 AM   #23
Thinks s/he gets paid by the post
bright eyed's Avatar
 
Join Date: Jan 2007
Posts: 1,891
Re: help! friend peddling WFG and VUL's

i've been trying to avoid the - take my word over his scenario.

i want her to figure it out for herself - use her own brain - or else she will always seek someone else's advice over her own. this isn't the first time where she's made unwise financial decisions

over the weekend i went through a real rollercoaster of thoughts - at one point i considered pulling together an intervention then, by the end of the day i thought, if these people are going to put thousands of dollars into something without researching it, then i can't help them. really i think at some point it will just look like i'm the naysayer and they will think i'm just bitter or something.

i do think i will share with her the information about the law firm investigating the practices, and the numerous other cases that had already been filed against them - at least that shows i'm not the only one who thinks this stuff stinks. the consumer advocates report also shows that western reserve's fees are higher than anyone elses (highest allowable by law) which i will flag - that even if people want a vul, she's peddling the most costly one. in one of the previous law suits a guy who felt shafted by the vul, sued wma (wfg predecessor) - on a message board someone ran the numbers and found that if the guy contributed $50k, and it earned the max 12% as assumed, over 33 years, the portfolio would earn $2.5 mill, but the client would only receive 1.2 mill after the fees!!! that's insane...

part of my new calm about this is - if any of them had done 10 minutes of googling - they would have had enough to send up red flags. i can see how people got duped 10 or so years ago, but now with the internet you are on the hook to find out for yourself.

i will let you know how it goes...thanks everyone for helping me sort these things out - i really really appreciate it!
__________________
If i think of something clever to say, i'll put it here...
bright eyed is offline   Reply With Quote
Re: help! friend peddling WFG and VUL's
Old 01-08-2007, 07:33 PM   #24
Full time employment: Posting here.
DRiP Guy's Avatar
 
Join Date: Nov 2006
Posts: 548
Re: help! friend peddling WFG and VUL's


Not peddling financial products, but same mindset:

http://www.cs.cmu.edu/~dst/Amway/
DRiP Guy is offline   Reply With Quote
Re: help! friend peddling WFG and VUL's
Old 01-09-2007, 10:31 AM   #25
Recycles dryer sheets
 
Join Date: Mar 2005
Posts: 329
Re: help! friend peddling WFG and VUL's

This link has some data on how bad VUL's are:
http://www.weac.org/News/2002-03/mar...lars&sense.htm

Here’s another example, this time with ING Reliastar Life (Minneapolis) Flexdesign plan. You are a female age 45. You buy a $100,000 policy and pay $1,074 per year. The value of insurance is $168 per year, while the extra money sent in is $906 per year, or $9,060 over 10 years. Fees charged against the policy are 5% of each premium, plus a 10-year surrender charge (% not stated), plus $99 per year administrative charge, plus 0.35% per year mortality and expense fees. The net result? If you earn 10% a year on your sub-accounts, your $9,060 extra sent in will blossom to $ 9,416. Wow! If your sub accounts average only 9% earnings per year, which would seem quite good, you will lose money.

Maybe you can do some math like that and show her how much she is paying in fees etc
-h
__________________
Hope springs eternal in the human breast:Man never is, but always to be blest.
The soul, uneasy and confined from home,Rests and expatiates in a life to come.
lswswein is offline   Reply With Quote
Re: help! friend peddling WFG and VUL's
Old 01-09-2007, 10:09 PM   #26
Thinks s/he gets paid by the post
bright eyed's Avatar
 
Join Date: Jan 2007
Posts: 1,891
Re: help! friend peddling WFG and VUL's

thanks lswein...

crunching numbers and concrete examples definitely help.

well, i took the plunge and sent an email, let's see how it goes, we're supposed to try to meet up tomorrow.
__________________
If i think of something clever to say, i'll put it here...
bright eyed is offline   Reply With Quote
Re: help! friend peddling WFG and VUL's
Old 01-10-2007, 08:44 PM   #27
Thinks s/he gets paid by the post
bright eyed's Avatar
 
Join Date: Jan 2007
Posts: 1,891
Re: help! friend peddling WFG and VUL's

well, we had a good heart to heart today.

turns out she didn't even read the email yet, but we talked about it when i asked her if she saw it.

she has signed up for the IEUL - the one w/ the guarantee, min and max and is putting in $350 month which, for her i think is a lot of money.

she wasn't completely comfortable with it and i told her to look at what fees she is paying for it. it has $1 mill in life insurance, and she's convinced she needs whole life because "these days" everyone is dying with debt (great plan!), something her cousin has said in conversation, she could be getting $1 mill in coverage term for less than a hundred bucks a month, but she's stuck on whole.

but at least i think i put some pebbles of doubt and told her to make sure she's reading things outside of materials or classes she's taking thru their firm.

i was very frank - she again, did say she thought i would be good at it - and i told her flat out i wouldn't affiliate myself with a company with such a bad reputation - the line they give her about that is that all corporations are bad or have some bad traits - and i told her no, hers in particular is really really low (lowest) out there.

so i think the good thing is that we agreed to continue to talk and learn about this together and that our friendship was the most important thing and since we've been friends so long we can trust each other to look out for each other.

i do think her cousin has imparted a lot of risky ideas in her head, like pulling out equity to invest in the market etc etc. i just told her to take her time and that she has a huge responsibility because she is the only steady income earner in her house so she can't play risky business with her money...i guess that will be another thread someday! (hope not).





__________________
If i think of something clever to say, i'll put it here...
bright eyed is offline   Reply With Quote
Re: help! friend peddling WFG and VUL's
Old 01-14-2007, 07:14 AM   #28
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,007
Re: help! friend peddling WFG and VUL's

Wow - you are a TRUE friend!

Audrey
__________________
Retired since summer 1999.
audreyh1 is online now   Reply With Quote
Re: help! friend peddling WFG and VUL's
Old 01-15-2007, 02:13 PM   #29
Thinks s/he gets paid by the post
bright eyed's Avatar
 
Join Date: Jan 2007
Posts: 1,891
Re: help! friend peddling WFG and VUL's

thanks audrey,

actually, my friend is one of the best friends a person can have. she would do anything to help a friend - or even a stranger out - in fact that is part of her problem! she's too trusting and doesn' t see how people can have different motivations... she has been there for me through all of life's ups and downs and that's why i'm sooo emotional and personal about all this stuff - if it were almost anyone else i wouldn't be so embroiled in it all.

at least the line of communication is open... and thanks to everyone again for their advice
__________________
If i think of something clever to say, i'll put it here...
bright eyed is offline   Reply With Quote
Re: help! friend peddling WFG and VUL's
Old 01-15-2007, 02:59 PM   #30
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
mickeyd's Avatar
 
Join Date: Apr 2004
Location: South Texas~29N/98W Just West of Woman Hollering Creek
Posts: 6,671
Re: help! friend peddling WFG and VUL's

Quote:
putting in $350 month which, for her i think is a lot of money.

Wow if the cousin is getting paid @ an 80% commission rate, he will be pulling in $3360 in first year commission. Not bad for a few lies here and there.
__________________
Part-Owner of Texas

Outside of a dog, a book is man's best friend. Inside of a dog, it's too dark to read. Groucho Marx

In dire need of: faster horses, younger woman, older whiskey, more money.
mickeyd is offline   Reply With Quote
Re: help! friend peddling WFG and VUL's
Old 01-16-2007, 08:50 AM   #31
Thinks s/he gets paid by the post
 
Join Date: Aug 2004
Location: Houston
Posts: 1,448
Re: help! friend peddling WFG and VUL's

Tell your friend to stop wasting her time with this nonsense...everybody knows that Wealth Lab! is the only way to get rich...and boy is it quick!
soupcxan is offline   Reply With Quote
Re: help! friend peddling WFG and VUL's
Old 01-16-2007, 09:49 AM   #32
Thinks s/he gets paid by the post
bright eyed's Avatar
 
Join Date: Jan 2007
Posts: 1,891
Re: help! friend peddling WFG and VUL's

Quote:
Originally Posted by mickeyd

Wow if the cousin is getting paid @ an 80% commission rate, he will be pulling in $3360 in first year commission. Not bad for a few lies here and there.


oh, don't make me sick! she also said he has near 100% rate of signing people once he sits with them - which i couldn't believe since he is sooo classic used car sales type. guess there are too many people out there who want to believe someone can make them rich without any work on their part...except signing over that check! i guess people mistake self confidence for knowledge!
__________________
If i think of something clever to say, i'll put it here...
bright eyed is offline   Reply With Quote
Re: help! friend peddling WFG and VUL's
Old 01-16-2007, 10:03 AM   #33
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
mickeyd's Avatar
 
Join Date: Apr 2004
Location: South Texas~29N/98W Just West of Woman Hollering Creek
Posts: 6,671
Re: help! friend peddling WFG and VUL's

Quote:
he has near 100% rate of signing people once he sits with them
This sounds a bit steep however, salesmen that start out with these kind of companies are required to generate as many as 100 sales leads per week and produce immediate sales results if they want to keep their job past the training period.

What better way to assure that the salesman will get an appointment and make a sale if not to the folks that he already knows such as friends and family? Generally after all of the friends and family have been fleeced made clients, the salesman finds that it is much more difficult to sell to a total stranger and he is eventually terminated for non-production however the new clients are stuck with their financial misadventure questionable investments mess.
__________________
Part-Owner of Texas

Outside of a dog, a book is man's best friend. Inside of a dog, it's too dark to read. Groucho Marx

In dire need of: faster horses, younger woman, older whiskey, more money.
mickeyd is offline   Reply With Quote
Re: help! friend peddling WFG and VUL's
Old 01-16-2007, 01:15 PM   #34
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
FinanceDude's Avatar
 
Join Date: Aug 2006
Posts: 12,483
Re: help! friend peddling WFG and VUL's

Quote:
Originally Posted by bright eyed


oh, don't make me sick! she also said he has near 100% rate of signing people once he sits with them - which i couldn't believe since he is sooo classic used car sales type. guess there are too many people out there who want to believe someone can make them rich without any work on their part...except signing over that check! i guess people mistake self confidence for knowledge!
And so many of these people call themselves "financial advisors".............. :P :P

__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)


This Thread is USELESS without pics.........:)
FinanceDude is offline   Reply With Quote
Re: help! friend peddling WFG and VUL's
Old 01-22-2007, 09:35 PM   #35
Moderator Emeritus
bssc's Avatar
 
Join Date: Dec 2005
Posts: 10,125
Re: help! friend peddling WFG and VUL's

Quote:
Originally Posted by bright eyed

guess there are too many people out there who want to believe someone can make them rich without any work on their part...except signing over that check!
I think that you hit the nail on the head. Do you think that in addition to trusting her cousin that she is a little bit greedy and wants to believe?
__________________
Angels danced on the day that you were born.
bssc is offline   Reply With Quote
Re: help! friend peddling WFG and VUL's
Old 01-23-2007, 06:04 AM   #36
Dryer sheet aficionado
 
Join Date: Oct 2006
Posts: 47
Send a message via AIM to excellent
Re: help! friend peddling WFG and VUL's

I really, really, really want to have the phone number of your friend. This story disgusts me. One MILLION dollars in life-insurance? Does she really have that much debt to pay off if she were to die tomorrow? At most a reasonable insurance amount would be 10 times her income. Based off of the fact that she is in this company and is not a ceo, I would guess she makes less than 100,000 dollars a year AFTER tax. Not to be rude, or mean, or anything like that, but I want to punch that guy in the face. What kind of relative would be willing to... sigh... you guys already understand the situation, but the poor friend here obviously doesn't. People like the relative infuriate me and are a prime example of how this business model encourages people to take ridiculous steps like this in their quest for money. I'm not going to jump to conclusions but I'm pretty sure that she isn't maxing out her 401k (Hopefully the 401k is diversified, you should check with her on this also) and IRA contributions, but is dumping a lot of money into this EIUL which I doubt she needs. If she got term life, 30 year, for a reasonable face amount, invested the rest into retirement, emergency, and general portfolio amounts, I am almost certain that it would yield a much happier financial future for her. How long ago did she sign up for the policy? I have tried to run the numbers, but you should look at her policy and PLEAD and BEG with her to cancel it if it's still in the grace period of 30 days or whatever, because of the fact that this is EXPENSIVE stuff, as you can clearly tell. The only way that someone would want this is if they wanted to be insured forever and protect against health problems later on in life, are making so much money that their estates would need some extra help from the insurance, and already have a sizeable amount of assets etc., because otherwise it's much too expensive of a policy. Now, maybe she DOES make enough money to fully fund everything, but from what you've said it doesn't seem like it.

The reason I am so angry is because I am an associate in World Financial Group, and I know exactly how people like that guy operate. It pisses me off. He "recruits" people, sells them on a dream of becoming huge in the financial industry, doesn't really help them, and just hopes that they buy insurance off of them so that they get the commission and can also recruit large amounts of other idiots who can't sell insurance to anyone other than their friends and family. It's simply not possible for more than 10% of people in WFG to become successful, I'd venture to say that about .5% of them have any sort of brain at all, probably even less have graduated anything other than high school to get a degree, and almost everyone is out to make quick money at the expense of people's future livelihoods. If everyone fully understood and followed the REAL mission of helping families with their finances then situations like this would simply NOT happen, but sadly instead a mentality of recruiting people who might never even get what they are doing and making money off of hapless friends and family is spread throughout the company in all of the meetings, conventions, etc.

The EIUL- Equity Index Universal Life, is a solid product from Western Reserve Life, but only when it's applicable to the client. I would need to see some more numbers but as I've said, it probably isn't for your friend.
Oh and to whoever said that it was 80% commission, it isn't, or at least to my knowledge it shouldn't be. Commission is divided into a tiered pay structure based on your current position in the company, and that position is based off of how many sales and recruits you can get in certain timeframes. It's 25/35/55/65%, with 2/3/.5/1.5 incremental percentage bonuses for various licenses and things. Anyways, I really think that you should look over her finances some more, really help her sort this out, and NOT LET HER GO FORWARD WITH THIS BEFORE SHE TRULY UNDERSTANDS WHAT SHE IS DOING. SHE CAN REALLY HURT A LOT OF PEOPLE'S FINANCES IF YOU LET HER FOLLOW IN THIS WOLF'S FOOTSTEPS. Take it from me, I just went to a WFG convention that was held in Oakland, California, in order to see more about this company. My personal goal is to field a huge number of licensed INTELLIGENT agents, instill in them MY personal values, and basically overtake any other wfg idiots in my market areas, and in this way protect families from the many predators that lurk around and prey on the innocent and financially unaware.

I have put some thought into it, and for now, the only way to beat them is to join them, hopefully if I succeed... well... at least in the areas that I have agents in people can actually get some help beyond having exhorbitantly expensive insurance in excess of what they need pushed on them. WFG and companies like it are expanding at explosive paces, and the trend seems like they will continue to grow as the average American's financial knowledge continues to decrease.

And I have to agree with the person that said that it will be years before her and her family realize the financial damage. But on the other hand, they may never realize what they potentially could have had. Add to that the fact that there are millions more out there that are going to be "helped" by "financial planners" in a similar way, and I don't think that our negative real savings rate is going to reverse itself anytime soon.
__________________
I&#039;m here to share what I learn and learn what I&#039;ll share!<br />Have a great day!<br />(:
excellent is offline   Reply With Quote
Re: help! friend peddling WFG and VUL's
Old 01-23-2007, 06:16 AM   #37
Dryer sheet aficionado
 
Join Date: Oct 2006
Posts: 47
Send a message via AIM to excellent
Re: help! friend peddling WFG and VUL's

Thank you bright-eyed, this story has inspired me while at the same time pissing me off so much that I am greatly reinforced in my dream of knocking this industry's legs out from under itself.
__________________
I&#039;m here to share what I learn and learn what I&#039;ll share!<br />Have a great day!<br />(:
excellent is offline   Reply With Quote
Re: help! friend peddling WFG and VUL's
Old 01-23-2007, 01:03 PM   #38
Thinks s/he gets paid by the post
bright eyed's Avatar
 
Join Date: Jan 2007
Posts: 1,891
Re: help! friend peddling WFG and VUL's

hi excellent,

thanks for your passionate reply!

I'm confused, however, why you would want to work for a company with such a poor poor reputation?

From what i found, Western Reserve's fees are the HIGHEST allowable by law - so i wouldn't say it's a good policy myself, which i pointed out to my friend. I know sometimes you can feel like you can change from within, but that really seems not plausible since their whole business model is flawed. They make money off of pumping people up on hopes and dreams, collecting $ and then people burn out or teeter out because of many reasons.

She doesn't make enough to justify the policy (about $60k? gross) and upon her cousin's recommendation is only putting into her 403b up to the match...i'm not exactly sure where she is getting the $ to cover the monthly premium because she was paycheck to check before...

it sure sounds like your heart is in the right place, but i am concerned you will just feel burned yourself in a few months or years.
__________________
If i think of something clever to say, i'll put it here...
bright eyed is offline   Reply With Quote
Re: help! friend peddling WFG and VUL's
Old 01-23-2007, 03:01 PM   #39
Dryer sheet aficionado
 
Join Date: Oct 2006
Posts: 47
Send a message via AIM to excellent
Re: help! friend peddling WFG and VUL's

Western reserve isn't the only company I can offer insurance through, I think I'm just going to end up giving term to most individuals through pacific life or something. Uh... hey, where did you get the numbers for western reserve, I'd really be interested in them.

By the way I have a hunch that the way they pay for the agent's commission is a. through hidden fees. b. ridiculous insurance price, because there are, like a lot of insurance plans, a lot of hidden fees in the prospectus. Anyways yeah... your sister definitely doesn't need 1 million, she would need 600,000 at the most, that's if down the line she felt that her death would need to pay for the mortgage, her kid's education, the cars, and whatnot, well, you probably know how to calculate insurance even better than me... a lot is personal belief in how much you need though... so... well... good luck bright eyed, I really respect what you're doing as a friend.
__________________
I&#039;m here to share what I learn and learn what I&#039;ll share!<br />Have a great day!<br />(:
excellent is offline   Reply With Quote
Re: help! friend peddling WFG and VUL's
Old 01-23-2007, 04:19 PM   #40
Thinks s/he gets paid by the post
bright eyed's Avatar
 
Join Date: Jan 2007
Posts: 1,891
Re: help! friend peddling WFG and VUL's

i think part of it is a fundamental philosophy to personal responsibility.

her cousin is saying most people these days die w/ a huge debt (we live in CA, so all those $700k interest only mortgages come home to roost some day) so he's telling her she needs the whole life to "plan" for the future. My personal belief system says that's unfair to the economy and others so no, i'm not going to bail myself out w/ a life insurance plan (at least not plan on it now ) as well as a poor investment strategy.

she does have two young kids, so she should have at least enough to cover their needs should something happen at any time so she may need more than $600k, but she could still avoid all these probs with a good term policy.

here is link to consumer fed article on vul's http://www.consumerfed.org/releases2...=022403ror.txt go to the link on the guys analysis - buried on around page 6 he goes over fees...

i think the 80% is calculated on - if you take the $350 premium, over 12 months that's only $4200, the agent probably got around $3500 in the first year from signing the policy - they technically say the "commission" is payed by the company, not by the client, but whatever you say, it's getting paid somehow. part of the "logic" is that most people have a tiny percentage chance of dying in the first few years of signing the policy, so they can afford to throw the $ at the agents without as much risk...in the first year.
__________________
If i think of something clever to say, i'll put it here...
bright eyed is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


» Quick Links

 
All times are GMT -6. The time now is 12:32 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.