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Primerica Financial Services...BE WARNED AND INFORMED A little bit about me; I'm 21 years old, have gone to three years of college and film school. I'm a self-taught drummer. I consider myself to be highly motivated and an independent learner. In High School I put together and captained a paintball team that traveled around and competed in tournaments. I've made films throughout my life and entirely by my own want and desire. People call me a "Go-Getter" but I consider myself simply to be a person that is passionate about life and wants to live the best one I possibly can. I love to entertain and help people. I enjoy giving back to the community in my own unique way. My dream is to produce my own films in the next ten years. I currently hold my Group 1 Life/Health License and Loan Officer License. Within the next two months I will have my Series 6 and 63 licenses.I am currently seeking ways to make myself financially independent and wealthy enough to live out my dream. For this reason I was very interested in Primerica Financial Services, as I instantly saw it as an opportunity to live my dreams. I was approached by a close family friend about three months ago and he wanted to tell me about the greatest opportunity since the great Real-Estate boom. I asked him what it was. He said it involved the Financial Services Industry. I was very interested because;1. There is a lot of money to be made off of money and the retiring baby-boom generation2. I have always been interested in the world of financials3. Investing is so****ing I did not know a thing about and figured I could atleast get a bit of education;So, I agreed to listen to the presentation about Primerica. Why not? It was only half an hour long. About an hour and fifteen minutes later the presentation concluded and I was even more interested, but still a bit skeptical. My friend told me that I HAD to meet this big-wig who ran an office in Arlington, TX and averaged $100,000 each month.Being the skeptic that I am, I decided to do a little bit of independent research. Within twenty-seconds on the internet I came across a site called "Rip-Off Report" which had countless articles and reports of mal-practice, abuse, and deceit. I also saw that there were a ton of articles defending the company. So, I gave it the benefit of the doubt.I went with my good friend to Arlington and met this multi-lucky-millionaire. He held a position in the company called "SNSD" Senior National Sales Director, which sounds very official. I met him, and sure enough he banks about $100,000 a month, give or take a few thousand. He really is rich beyond imagination.We began talking and I discovered he needed to make some videos and also needed a tech guy around the office. I am computer literate and have also been involved with video production since I was in the fourth grade. So, I went ahead and paid the $199, joined Primerica, and began working for this multi-lucky-millionaire for $15 an hour.Three months, 1200 hours, and only $500 in compensation later, I have resigned from Primerica, but not the financial services industry.Why? Simple. They are deceptive.Primerica is an MLM company that prin****lly sells life insurance. They, like State Farm, offer financial services, but are extremely limited in the options that they can provide their clients. Primerica must bow to the will of citigroup and can not "shop around" to find the best premiums, interest rates, and investment programs for their clients.The bottom line is that Primerica Representatives are salesmen. Most of them don't have a clue as to what they are talking about. Once I s****ed to focus on becoming educated about Primerica's products I had thousands of questions.My friend, who was my "upline," showed me an example of how Primerica can "do what is right" for the client in regards to mortgages;Two loansBoth for $100,000Both at 7%Both with monthly paymens of $805One takes 12 years to pay off, the other takes 30 yearsI asked how that was possible;"Simple" he says, "The 30 year is a regular mortgage, and the 12 year is a simple interest loan."Sounds too good to be true. It is too good to be true.I asked him where he heard this from;"I heard it on one of the CD's of a guy who makes 2 million dollars a year in the company."It must be true right? Wrong.The formula for simple interest is Prin****l x Rate x Time.I did the above example by hand. It's not even possible. There is no way that it is possible. My friend is an idiot. He doesn't know what he is talking about. I went around the "base shop" asking various people how the above mortgage example is possible. No one could answer my question. I asked them what the interest rates were on the loan products, no one knew anything. I asked them about the Life Insurance policies, about policy rates and fees. No one knew anything. Every question I asked never received an answer. At one point I was told by the multi-lucky-millionaire himself; "You're a smart guy, but you ask too many questions to be successful here."I could go on forever about my experience with Primerica. So instead of detailing conversations and experiences I will do what no one at my base shop, and no person to ever attack or defend Primerica, has done. I'm going to lay out some FACTS and hopefully these FACTS will ANSWER some QUESTIONS:1. In the month of February 2007, Primerica recruited 16,500 people at $199 a piece. The $199 is supposed to be used for a background check, and the Group 1 Life/Health Licensing process. Any current or former representative will tell you that there is a "formula for success" in regards to recruits;For every 10 people you recruit, 6 will quit and 4 will pursue their life license. Of the 4 that pursue 1 will fail the test and quit, 1 will pass the exam and never sell insurance, 1 will pass, do 2-3 transactions and quit and 1 will become a "success." So, for every 10 recruits, 7 do nothing with the $199.Let's do a little bit of math for the month of February. 16,500 divided by 10 is 1650. There are 1650 groups of 10. According to the "formula of success" 7 out of the 10 will not use the $199 they paid. 1650 multiplied by 7 is 11,550 people who did not use their $199 fee for licensing. 11,550 times $199 is $2,298,450. The goal for March is 30,000 recruits. 30,000 divided by 10 is 3000 times 7 is 21,000 times $199 is $4,179,000. In one month off of recruits alone Primerica made enough to pay the "guy on the CD who makes 2 Million Dollars a year" his money for the year and some c****e.Can people get refunds? Absolutely. I am in the process of getting three of them right now. After the initial three to four days of processing your $199 loses $40 of value for background checks which actually only cost $20. The other $20 is said to be an administration fee. So in February, had everyone who didn't go after their Group 1 Life/Health license received a refund of $150, Primerica still profited $20 times 11,550 or $213,000.Recruit. Recruit. Recruit.2. New recruits are told they need to train in their warm market which consists of family and friends. During the training process the recruit sets appointments within their warm market and then take their Field Trainer, usually their upline, on appointments. At this point in time the recruit is not licensed and can not receive any compensation from the sales of insurance, writing of loans or investment accounts. For the first two to three weeks, new recruits do not see a DIME of money made off of sales to their own family and friends. This is a concept called "give and ***n." Basically, on good faith, you take your trainer on appointments, allow them to profit from all of the appointments, and in return are promised that after you receive your license, your trainer will take you out on an equal number of appointments for an equal number of transactions and an equal amount of compensation.Let's say recruit Adam takes their trainer Theo out to seven appointments, of which five sales are made totaling $2,500 in compensation to Theo. Adam gets his life license. Bob, a new recruit of Theo's, goes on 6 appointments with Theo and gets 4 sales totaling $2,000 in compensation. Theo gives Adam the $2,000, but now owes Bob $2,000 and still owes Adam another $500. How is Theo supposed to make any money? He better hope either Bob or Adam or both quit, and that his new recruit Charlie has a warm market that buys a lot of Life Insurance!Let's say Theo becomes an RVP(which means you are upgraded to a 95% commissions contract) in December 2006. Adam works hard and of the 16,500 recruits in February his organization was responible for 70. Of those, 21 got licensed and 7 stuck around to make money. Adam's hierarchy consists of three seperate legs, two of the legs have 3 people and the other leg only has 1. Adam makes RVP at the end of February. According to Give and ***n, because Adam has reached RVP, Theo now gets to take two legs of his choice from Adam's organization. Obviously he will take the two best producing legs which will be the two that have 3 people each in them. Now, Adam has a 95% contract, much better than his 75% contract, but he's lost the majority of his “over ride income” and now only has one leg, with one person. Just wait until someone in Adam's organization makes RVP! Then Adam can replace the two legs he had to give up! 3. The "$.M.A.R.T. Solution Loan" is designed to stack debts and lower money out of pocket every month. It is nothing more than a Home Equity Loan, or a Refinance with cash out. The concept is wonderful and truly can save people thousands of dollars in interest and reduce monthly payments. After all, anyone in the Financial Services Industry understands the value of cash on hand. Unfortunately, with Primerica the lending source is limited to Citicorp Trust Bank and their APR's on Home Equity and Refi's are usually 1 - 2 points higher than the prime rate. Don't even try to get a loan through them if you have anything less than grade A credit.The money you would save through debt stacking will get eaten up by the higher interest rate.4. Primerica and Citigroup advise people to do a "Simple Interest Bi-Weekly" payment schedule on their mortgage loan. They claim, truthfully, that by swit****g to Bi-Weekly payments from your standard 30-Year Monthly payment schedule, will save you thousands of dollars in interest. This is very true. HOWEVER, swit****g from a standard amoritization to a simple interest schedule increases the amount of interest you pay. As well, the bi-weekly payment plan simply adds an extra FULL payment per year on your mortgage balance. That's roughly 1/12 of an extra payment per month. It would be smarter to simply add extra money to your payments each month and stick with your lower interest rate, and standard amoritization.Most of the time you can c****e the way you pay back your mortgage with your current lender without having to pay anything extra or sacrificing your fixed low interest rate. There are numerous ways you can reduce time and interest paid on your mortgage. Bi-Weekly is just one of a dozen options out there. No one at my base shop knew these facts, and this leads me to believe that many Primerica Advisors also do not know these facts.5. There are more than 19,000 Mutual Funds available to the public. Of these, around 125 make returns on a consistent month to month basis. Of the 125 funds that make consistent return, around 65 of them make 10% or better. Because I am not yet Series 6 and 63 licensed, I can not name specific funds. However, Primerica Representatives do not know how many mutual funds are out there. They use a limited box of funds and most of those funds are "loaded." A "loaded" fund simply means that the initial money you invest will have a c***k taken from it which is used to pay commissions to the broker/dealer. Usually it is anywhere from 5% - 8% of the money you initially put into the investment. Let's pretend you have $10,000 to invest. On recommendation from your Primerica Advisor you put your $10,000 into a loaded fund. Let's say this fund has a 5% load fee. Suddenly, your money goes from $10,000 to $9,500, and given the ***n/loss statistic chances are your money is going to take a while to make up that 5%.Obviously fees and things of that nature are how Mutual Fund Companies make their money. So it doesn't matter who you invest with, it's not going to be free. There are advantages and disadvantages of having a Mutual Fund and you sould always read your prospectus carefully and thoroughly. Some loaded funds may be worth the front-end fees in the long run. Others may just have you going broke faster.6. Primerica's company presentation is abosolutely brilliant. It seamlessly flows from Primerica's credibility, touting it's trillion plus dollar backing from Citigroup and the many accounts of Primerica and Citigroup in various publications, to it's Mission of "Helping Families Become Debt Free and Financially Independent," and closes with a wonderful piece on the commission schedule and my favorite part, a ***ulative look at the yearly cash-flow incomes of some representatives.The numbers are astounding. Nearly 5,000 people make between $50,000 and $99,000. Another 2,600 people make between $100,000 and $999,999 a year. Around 30 make over a million. 16 make over two million. To be honest, this is what sold me on the company. When you have that sort of yearly track record then you are obviously doing so****ing right. Right? No.These numbers are deceptive. Rather than based upon what Reps had made in the year of 2005, the figures are based upon "***ulative rolling 12-month cash flows" as of November 30, 2005 and dating all the way back to the company's creation in 1977. Also mis-leading is the idea that those 5,000 people making six-figure incomes are different persons. This is not so. A "rolling 12-month" cash flow means that in a 12-month period a Primerica Rep. made X amount of commission. So, if Theo made $125,000 from May '04 to April '05 and then from April '05 to March '06 made another $130,000 he is counted in that "earnings" group twice. Seeing as how the timeline dates all the way back to 1977, its obvious that there are several people who are probably counted in each category 4 or 5 times. Even the guys who have been in the company since its beginning as A.L. Williams, who are now making millions a year, have probably been counted in the higher six-figure category a dozen or so times.7. The Financial Services Industry is a dynamic and rapidly growing industry. This is 100% true. There is a HUGE MARKET and NEED for MANY new and qualified Financial Planners. America is in a heap of trouble financially. This is solid fact. There is also a ton of money to be made in the industry. This is another part of the Primerica presentation altogether. There truly is a ton of opportunity for growth in this field. However, Primerica proclaims it is on a crusade to "Do What's Right" for families everywhere while charing higher interest rates and premiums, using loaded mutual funds, and limiting options to a mere handful of investment tools and plans. In order to do what is right for people you have to create a custom-tailored financial suit for each clients situation. One size does not fit all. The only way to truly "Do What's Right" for families 100% of the time a Consultant needs to be able to educate and extend to them the best options out there for their particular situation. You must be educated and have access to the best options when discussing a persons financial life.Primerica takes anyone off of the street and sends them out to recruit and give financial advice with no education what-so-ever. I never did that because I felt very uncomfortable approa****g someone to talk about their finances when I had very limited knowledge of the industry and the services available. Furthermore, most Primerica representatives worry more about recruiting than they ever do about learning the products and options available to their clients. The reason for this is because Primerica has a huge bonus program based upon base shop recruits and premium. In order to make bonuses every month you have to recruit a certain amount of people and sell a certain amount of product. Consequently you have a bunch of "Financial Advisors" with little to no education, who approach people they haven't ever spoken with, and already know exactly which products (Citigroups) they are going to use to "Do What's Right" for the family. Laughable. In order to give each situation the best possible you MUST have ACCESS to all or a vast majority of the options out there. There are countless Life Insurance companies, countless lenders, countless retirement and investment plans. By pushing and selling only a fraction of the options available to families you are robbing them of a better opportunity. Granted there are some representatives who are more experienced and have a lot of knowledge as to all the services available in the Financial Services Industry, but for the most part Primerica Reps. are guys straight off the block who more than likely, do not have a clue as to what they are talking about. Once you learn and see all the options available I can't understand why anyone in their right mind would remain with Primerica when they are limited to perhaps 3% of the options available.I would like to conclude with a couple of conversations I had with people towards the end of my two and a half month tenure at Primerica. After an "Opportunity Meeting" at my base shop I was ****ing around the lobby of the office. A few of us lingered, asking questions and just making friendly small talk. I had quite a few questions about the mortgage products and I began to ask the younger brother of the multi-lucky-millionaire about the interest rates and how the interest is calculated. After a few minutes of talking it out, and realizing he had backed his way into a corner, he looks at me and says;"You aren't going to be able to win every client. Don't worry about interest rates, calculations, and fees. Just fill out the applications and send them in. If you can save them money, then what difference does it make if the APR is 8% instead of 6%?"That's the conversation that sealed the deal for me. What difference does it make? What difference does two percentage points make in amounts of cash on hand every month? ***dreds a month. Thousands in the long term. When I resigned I called my upline to inform him I was leaving. He asked me my reasoning. I told him the products weren't the best. What he said next is so****ing I will remember and laugh at for the rest of my life;"Since when did you care about product? When you were a cashier at Wal-Mart did you research the products they sold?"Brilliant my friend. Captain Crunch.....Retirement......Cocoa Puffs......Investment Planning. One and the same!Based upon my experience I have this advice to give;Stay away from Primerica Financial Consultants. Chances are they don't know what they are talking about and, if they do, they won't be able to offer what's best for you