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Last week, I wrote about my first experience with Primerica and their incredible ability to convince people to work for them. However, I was about to encounter this company once again in my life. One of my friends quit his job to work for Primerica a short time before I went to that first meeting. A year had passed and he was still working for them, saying that he was building his own company within Primerica. As I do have the profile of a successful salesman, he approached me when he felt comfortable with the idea of recruiting a friend.

I was enthusiastic about speaking with one of my friends about Primerica as I figured that he would tell me the truth about how it works. The whole pyramid scheme was scary and I had a lot of questions. This question and answer session went on and on for over a year as it was very complicated to get an answer that would not lead to another question. So, here are most of the questions and answers we discussed.

What is Primerica, What is your purpose as a Primerica advisor?

- Our role is to help out other people with their financial needs. Too often, they are left alone as banks are only interested in selling their products and not helping clients. The population needs guidance with regards to their finances and we are there to provide them with great service. It usually starts with a protection plan including life insurance.

How do you make money? Do you have to sell insurance?

- Well FB, you make money by building a team of salesman that will help people with their financial situation by selling Primerica’s products. The system is pretty simple: my VP recruited me so he makes a cut on all my sales and my team’s sales. Then, when I recruit individuals at my level, I also make a cut on their sales and their team’s sales as well. You can earn a commission on a sale up to four levels below you. I should become a VP in two to three years. I’m already part of the top 5% of team leaders and I just became a regional director.

Becoming a VP within the next three years? What does this mean?

- To become a VP, you need to recruit a certain number of Primerica advisors directly related to you. Then, you simply have to reach your objectives in term of premiums, investments and other requirements.

So, who is selling if you concentrate on recruiting? What does the commission chart look like?

- The people you recruit will become your sales force and you will be making a part of their commissions as you are above them. The commission chart is below the market industry simply because you have the opportunity to recruit individuals and benefit from the pyramid-like system.

Okay, then how do you recruit people and find new clients?

- Everything is produced through the word-of-mouth approach. Basically, anybody with a deep feeling of entrepreneurship and a need to help people will be considered as a potential recruit. We are looking at people that want more than a small 9 to 5 job that they are looking for financial freedom and a better future. All clients are contacted through references. So you don’t need to make any cold calls. We sit down with you and help you out to draft a list of your main references. These will be your first clients. Then, you ask your clients for more references and you build your business this way. Word-of-mouth is the best publicity around and this is why we don’t need to advertise.

How can they efficiently offer financial products with such limited financial background?

- All Primerica Advisors attend the classes they need to complete before they can sell (we are talking about insurance and mutual fund licenses here). The whole team, especially the person who recruited you, is there to compliment your training. I usually go to the first five meetings with my new advisors and I show them how to explain our products, lead the conversations and close the deals. When they have a lot of potential, I can go to ten meetings with them. I always tell them “if you want to know how to swim, come and meet me on the other side of the river. Then, I’ll help you”. I believe in people who want to work and I will do everything possible to help them out in their careers with Primerica.

Are they making money while they are in training?

- They are not, as they are still in training, and they do not have their licenses. Therefore, it is only normal that the person who trains them earns the commission from their hard work. The training process is very important for their proper development. This will often make the difference if they will succeed or not. They look at it as an investment in their own business.

I think I got the picture, let’s chance the subject now; How come Primerica has such a bad reputation on Google?

- Not everybody understands how the company works or that they have to make extra efforts in self discipline as they don’t have any boss who will look over their shoulder to see if they are working. Many people are frustrated by Primerica but they should be frustrated about themselves. When you really understand what Primerica stands for, you understand that their system is simply beautiful.

Before I get to my own conclusion, I would appreciate to hear your feedback about Primerica and your own experiences with this company. Stay tuned this Friday as I will come out with my own perception of Primerica and their system. I’ll try to be as rational as possible

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I am well aware that this topic has been debated upside down and inside out over the internet. However, I do not feel that many of the opinions expressed were based on rational analysis. I found that several people would eradicate Primerica from the surface of the Earth while others would build a temple honoring Hector La Marque, one of Primerica’s most successful financial consultants (gurus).

I have been approached by this company and I really reflected upon their financial model before having formulated an opinion on it. I have decided to present a series of three articles on Primerica: The Approach, The Discussion and The Final Conclusion on Primerica.

In fact, I had many experiences with Primerica. The first one happened when one of my friends told me that he was going to a financial conference on how to make more money. He could not remember the name of the company and as he is barely familiar with the financial industry, I did not bother too much with details. Anyway, the conference was free and I had nothing to lose besides my evening!

So, I attended the meeting which seemed more like a sales pitch, about Primerica, than anything else. The way they work is pretty simple. Each Primerica advisor asks their clients for references. These people are invited (like my friend and I) to this kind of meeting presented as a finance conference. As the invitation comes from a person you know, you may be more interested than if an advisor called you out of the blue. They gather about forty to fifty people in their offices and the room is covered with Primerica Reward Trophies and plaques: $50,000 premium, Team leaders, Golden Primerica Rewards etc.

They were big talkers, welcoming and very captivating. They talk about how banks are mean and want to run with your money (I guess Customer Revenge would agree on that part!). They also explain that Primerica agents are here to help people with little or no financial knowledge. They want to help them build a strong financial plan so clients are not left with nothing at retirement. Then, they show you pictures of successful Primerica advisors who made so much money last year. They talked to you about how they felt privileged when they were the first parents to arrive at their children’s activities since they have flexible schedules or when they came into this big Atlanta stadium to receive their Primerica gold watches. They basically got the whole room pumped up before several financial advisors set out to meet with the guests.

As I had studied marketing, I was able to detect most of their tricks to get people on board with catchy phrases such as “was the only one at my son’s hockey practice. Make other people’s money work for you! Become an entrepreneur; come with us to help people”. I was sitting there and watching how people reacted. We were six friends that attended the Primerica (sales pitch) financial conference. Four of us were almost ready to quit their jobs the next day and jump on the bandwagon to financial freedom. The other two (my wife and I) were amused to see them falling for the big umbrella.

The Primerica advisor that invited us through her client came to see us and asked us questions. She was there with two purposes in mind: Recruit and Sell. I guess their mantra would be the following: “if you cannot enrol them as Primerica recruits, then cover them with Primerica products as clients”. She asked me a single question:

- Hello Mike, nice to meet you. Tell me, which field do you work in?

- Financial services, I’m a banker.

She was livid for a moment, as if she was a drug dealer that discovered that I was an FBI agent.

- Well I guess I would not be of any help then.

- I guess not. I smiled back at her as she turned around to prounce on another one of my friends

After the meeting, the six of us ended up in the parking lot to further discuss the “Primerica Strategy”. One girl asked:

- So Mike, when are you going to join Primerica? You seem to be a perfect fit for this kind of job!

I could see the fire in her eyes; they were burning for those financial dreams.

- Take a minute to look at the cars in this parking lot, I said. She looked around and stared at me with a big question mark on her face:

- I don’t get it, what do you mean?

- My Mazda and your Hyundai are the most valuable cars in the place. If you were making as much as they claim, don’t you think you would drive something like a Benz or a Bmer?

This is how we how left, in our respective cars, with “our” Primerica advisor in the background driving “her” 1990 Buick.

Stay tuned as next Monday, I will write about the discussion I had with one of my friends, a Primerica advisor who tried to recruit me.

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