World Financial Group Scam – Is WFG a Scam?

You came here wondering if World Financial Group is a scam. The answer is yes WFG is a scam, yes WFG is a MLM, and this review will tell you why.

World Financial Group (WFG) Scam

World Financial Group (WFG) is a multi-level marketing company which sells investment, insurance, and other financial products through a network of distributors. WFG is active in the United States, Canada, and Puerto Rico. WFG is owned by Transamerica, a subsidiary of Aegon. While Aegon and Transamerica are legit insurance comapnies, the selling practices of World Financial Group has been called a scam by many people. This page will help detail some of the criticisms of World Financial Group as a scam. You can then decide for yourself whether WFG is a scam.

How WFG Recruits

According to Yelp reviews, WFG targets students fresh out of high school or in college. This is because they don’t have a lot of real world experience yet, and are more easily impressed by people in suits driving fancy cars.

World Financial Group Scam / MLM

People claim that World Financial Group is a scam because of the way it sells insurance. The claims of WFG being a scam is mostly related to the “business opportunity” offered to salespeople, and the over-hyping of financial products.
Recruits are known as “associates” and pay $100 as a joining/”administrative” fee. Former associates have reported stories of being pressured to sell overpriced products to friends and family, burning those bridges. They have also reported the WFG recruits associates just to tap into that personal network, and not because the associate is fit for the business.

WFG is a Scam for Distributors/Associates

The pyramid/MLM features of World Financial Group means very few people make money. Typically the ones at the top of a MLM pyramid makes all the money while the bottom (new recruits) make barely anything.

WFG is a Scam for Customers

We talked mostly about why some people think World Financial Group is a scam for distributors/associates. We now talk about why some people feel WFG is a scam for clients as well.
Notice that the commission rates go up to 65%. That means when a client buys a financial product, 65% of that amount is going towards the sales agent and 35% to the insurance company. The insurance company, in this case, AEGON, makes money as well. Which means that the majority of what a customer pays isn’t for the product but for marketing and sales. Whereas an index fund may charge less than 1% as a fee. This is why people believe that customers of World Financial Group are also getting scammed since the markup is insane on these “financial products”.

WFG Pyramid Scheme

Dedicated vs Non-Dedicated Members

According to WFG:
There are two (2) types of members in WFG: Dedicated and Non-Dedicated. Dedicated members are those persons who have made a decisionto market for sale only those Products and Services marketed by WFG. Non-Dedicated members are those persons who have made a decision to market the Products and Services and other products and services not marketed by WFG. Although the membership terms of Dedicated and Non-Dedicated members will be identical in some respects, Dedicated members will be accorded certain benefits not available to Non-Dedicated members.”

Associate Levels

There are multiple associate levels dictating how much commission you get per “qualifying” sale. Note that each “progression” requires you to have recruited others. This is where the pyramid structure of WFG comes into play, and why many people call it a pyramid scheme or scam.

Training Associate

Commission: 25%
Progression Requirement: within any sequential 30 days make 3 sales and recruit 3 partners (known as 3:3:30)

Associate

Commission: 35%
Progression Requirement: 3 direct associates through the personal recruits, 5 life licensed associates in your team and 40,000 net points in 3 rolling months

Marketing Director

Commission: 50%
Progression Requirement: 10 associates in your team, 6 of whom must be life licensed, 3 branches of personal recruits (legs), one of which must be MD level, 75,000 net points within 3 months rolling time. Also, there must be $35,000 cash flow within 12 rolling months or $20,000 – within 6 rolling months.

Senior Marketing Director

Commission: 65%
Progression Requirement: 3 direct recruits – all SMDs and either 500,000 net points in 6 rolling months or 750,000 net points in 12 rolling months.

World Financial Group Legal Issues

World Financial Group has run into legal issues in the past, which lends credibility to WFG being a scam. World Group Securities (WGS) is the broker-dealer affiliate of World Financial Group (WFG), and are both owned by AEGON.

  • World Group Securities (WGS) had incurred ten regulatory penalties since 2004
  • WGS and one of its brokers were fined $150,000 in 2006 by Missouri’s commissioner of securities for selling unsuitable products to elderly people
  • WGS was fined $50,000 in 2004 for failing to supervise its representatives in the State of Utah, who were misrepresenting their credentials and services rendered during free lunch seminars targeting seniors
  • WGS was fined over $850,000 in 2010 as the result of the unauthorized sale of private securities by some of its agents in the State of Arizona
  • in 2010 the SEC ordered WGS to pay, among other things, a civil monetary penalty in the amount of $200,000 for the fraudulent selling of unsuitable securities in the State of California, which were funded using home equity, derived from the refinance of the customers’ homes into subprime mortgages
  • World Financial Group Reviews

    People on the internet have reviewed WFG and many agree that it’s a MLM scam.

    Reddit User toolboc

    Yes, I know it sounds crazy, but I discovered the branch manager did not own the house he claimed he paid for at a recruiting event / house party via public property and mortgage records. This may be a tactic used to draw members. If one makes themselves seem more well off than they really are by renting expensive cars and homes and they can potentially pass them off as having been earned through “the business”. I have received PM’s in response to this very post describing situations where the upline leases an expensive car to a new recruit. The recruit is now paying for the upline’s vehicle while using the car as a symbol of proof that the business works.

    World Financial Group Scam

    Hope you learned a lot from reading about the WFG scam. Read the reviews on World Financial Group so you don’t get scammed!

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