October 19, 2007, 7:00 am

The Primerica Paradox: The Conclusion Part 2

by: The Financial Blogger    Category: Career,Personal Finance,Primerica Series
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After this fourth post on the Primerica Paradox series, I finally put a final dot on the reasons why I decided to not follow this career path. While I was able to find somebody that was successful in this kind of business, it was still not enough for me to leave my job and hop on the Primerica Train to… financial freedom?

Back to the pyramid scheme

Is it a pyramid scheme? In legal terms, the answer is no. However, it does not mean that because it is legal that the company’s structure is not shaped like a pyramid. Everybody is making a cut off of the people below them; it goes four layers deep! I think it is clear that the guy on top makes the big bucks. They will answer that every company is the same, the President and the VPs sit in the box seats and the  employees are left in the bleachers. It may be so. However, Primerica does not explain why they are able to compensate four people for the same sale. The answer is pretty easy: they have cut down the commission compared to the industry norms. For example, if a life insurance policy of 100K would provide one agent with $1,500 in commission, a Primerica advisor at the lowest level will earn $900, then his recruiter will receive $300, the recruiter’s recruiter will get $200 and finally the guy who put all of them together will earn $100. So for those who are in to sell, Primerica is definitely not the right place to be. “Yeah, but you could build a team and create your own business”, I guess they forgot that the best sellers on earth are not necessarily interested in building a team compared to earning the big bucks right away. The main problem I see with this approach is that you have to convince many an individual to work hard for less that they could earn only because they have the option of building a team to earn extra commissions from somebody else’s work. In fact, if everybody concentrates on recruiting individuals, who will close the sale? You may have a hundred people below you, if nobody sells, it still means $0 in your pocket.

Anybody can do it

Another thing that bugged me was the fact that any Walmart greeter could manage one’s personal finances (no offense intended). With only a couple of licenses in hand, they are shipped to their relatives’ homes  to sell them financial products. Primerica was able to build complete questionnaires that are completed by the clients with the advisor and then sent back to their control centre. An evaluation of the client’s file is done and the result is communicated to the advisor. This is how they manage to have a mechanic suddenly “specialized” in financial products. Don’t get me wrong, I have nothing against mechanics or any other profession, but would you really give me the keys to repair your car if you know that I am a banker and that I recently passed a three month technical class? I can barely check the engine oil myself, how the hell in three months would I be able to diagnose much less fix your car?

This results into a huge lack of credibility in the advisors. Most of them have very limited knowledge as to what they are recommending/selling and why. They follow the guide and offer what Primerica tells them to offer. There is little place for creativity there and real financial planning. The thing is that their market consists of every one that the advisor knows. Most people do not know much about finance anyways and they are even less likely to question their advisor if he is part of the family or has been referred by a good friend. The relationship you have with your financial advisor is based more on trust than competence. You simply assume he knows what he is doing as you know him through your circle of contacts. This is why dealing with a Primerica advisor might be dangerous. Then again, I am not generalizing the situation, but the way they recruit individual leads to this kind of supposition.

How you start making real money with Primerica

It took me a while to figure out the best way to make money through Primerica. The reason is simple; they prefer presenting their company as an opportunity to build your own business and make money on your team’s sales. However, if you think about it twice, you figure out that if everybody is trying to build a team, nobody is concentrating on selling. As I said before, I may have a hundred advisors under my position, if they don’t sell, I do not make s%!t. So how can you really make money?

You have two options: The first one is to recruit good salespeople that will concentrate their business on their own capacity to sell financial products. However, you have to be prepared to answer their questions when they find out that they would make almost twice their income if they would work for another company. You will have to show them how to recruit people in order to keep them. If not, they will surely transfer to the competition. Unless you remind them that the client base must remain with Primerica as it is not yours anymore (wait… I thought it was an opportunity to own my business?).

The second option is how you really make money. When you think about it, the training process is done in two steps: the advisor gets his licenses to sell insurance and mutual funds and then, meets his five best contacts to see how to close a deal. The recruiter makes full commission on these meetings as the advisor is not fully trained and “not ready” to jump into hot water. Therefore, every time you recruit an individual, you are more likely to close four deals out of five. Why? Because you ask them for their best five contacts, people that have a high potential need in financial products and that fully trust your new advisor. The evil plan goes beyond this point: if you train your guy to recruit efficiently, you will make extra commissions on his rookie’s first five sales.

This is obviously the main reason why I decided to not leave my job and work for Primerica. However, I understand that many people may find success with this company. The problem is not that it doesn’t work (because it does) but how Primerica is presented to their new employees (or should I say partners?). This was an honest conclusion and if you think I am in the left field and did not understand the process properly, please feel free to comment

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by: Success | May 10th, 2012 (9:20 am)

What a Great Company! With Fantastic Products! I became a client before becoming a representative! I have been a Rep in business for a year and a half
after becoming a client first. By taking a look and doing a financial needs analysis I saved o er two hundred dollars a month. As being a Rep on a part time basis i made over twenty five thousand! We don’t get paid to recruit and the compensation program is great weather you just want to be a sales person or build a business. I quit my seventy thousand a year job after a year and a half. It’s now been two years, and I love the freedom to control my own life and time. I was a industrial mechanic before. Had no background was willing to learn something new. Worked!!! What I see to be the common denominator on most blogs is that the people who write them just did not put in the effort to learn and work. It’s easy to go write a bunch of crap on a blog or form! Have a great day! Definately worth having a look from the client side of things, if it’s better than what you got now why not!? If you need the extra cash or fed up with your J o b, have not seen anything else that beats it!

by: Smarter Guy Named Greg | May 10th, 2012 (8:47 pm)

Greg whom commented on April 24th. I think you are missinformed. You do realize that a LOAD fund is not only a mutual fund with an up front sales charge, back end sales charge, level load 12b1, but also any mutual fund that has a 12b1 fee. If you are correct in your statement which I doubt you are, then how exactly are YOU as the rep compensated? Are you working free of charge? If so how does working for fre equal a business opportunity?

by: Smarter Guy Named Greg | May 10th, 2012 (8:54 pm)

also Greg whom commented on Aprl 24th, have you ever been an independent agent? You do realize that the account analysis software from Morningstar and others are provided free by other companies right? I am guessing you know nothing about the financial services business, and I dare say I doubt you have a securities license or even a life license! BTW, Primerica is a place to get a start, but they are not worth staying with if you actually want to own your own business.

Also, the fact a pension from Canada owns shares in PRI doesnt mean crap, do you realize how many large investors and charities had with Madoff’s Fund? Primerica is a real company and their stock is real, but the fact someone or some pension owns it doesnt mean anything.

More disgusting propaganda from brainwashed Primerica drones. Primerica is the worst form of multi-level-marketing. Its pyramid system is designed to bring failure to any new person and only the people at the top of the pyramid make any money. Over 99% of recruits fail. If it was so great, why do they have to beg people to join? Ask yourself that–people are lined up trying to find jobs but Primerica is having to chase down people to join.

With Primerica, there is NO base Pay, NO benefits, NO help with marketing. They just want to get your friends and family as leads and leave you to fail. The company was started by an uneducated football coach and ia run by ignorant people who are low down enough to rip off their friends and family selling terrible products.

Its important for people to realize that just because a company is legal doesn’t mean that its good and the company is being honest. Fortune tellers that charge for phsycic readings are legally allowed to charge but does that mean they are really beneficial for the average consumer?

Primerica is like a big leech sucking the life blood (warm leads) out of new recruits. The people at the top of the pyramid make all the money while new recruits give away their friends and family to be sold the products and there is no training beyond selling to your closest freinds. By that point, you will fail and that’s how its designed.

Please understand this people. MLMs/pyramids are DESIGNED to bring failure to new people and keep the income going for those that got in early. Every business has a marketing plan and Primerica’s marketing plan is to sell a new recruit on the dream of becoming wealthy and this is all a a scheme to make sells to the new recruit’s friends and family and when they are done with that recruit, they will mve on to a new victim.

by: Carlo Johnson | June 9th, 2012 (5:03 pm)

one crucial thing i think that you are missing is that they train associates in areas of managing there own money which is why there are a lot of satisfied reps. If any job were to explain to an individual what should be done with the money that they are receiving from them then more people would in turn be apart of the few that make thousands a month.

I just spend few hours at a training session with Primerica [ I would call these people a ” Happy Bunch”] and I’m sorry to say that I felt like a complete idiot. I sat with other 20 victims in a classroom and watched numbers fly across the screen.Sexy teacher like lady spoke fluently and really didn’t say anything that would explain to us the most important thing we needed to hear. How are we going to make any money? In the room next door other members of Primerica were constantly clapping their hands and cheering.Most of them seemed to be Filipinos and I though for a second that the office space is shared with some Baptist congregation. I could see even small children running around in the hallways.I kept asking myself what’s all this about ?Apparently Primerica likes to invite as many families as possible to their gatherings. To me the whole meeting seemed very strange to say it politely. All these happy faces, everybody shaking my hand and the ladies gave me that look ” oh I wanna sleep with you pretty boy”. I have never attended any cult meeting in my life but it sure felt like one to me. Primerica may be a successful company and I’m sure this organization makes lots of money for some but the way they try to recruit new members certainly didn’t work in my case. I feel any above the average intelligent person will walk away from these recruiters .I’m sorry Primerica people but you didn’t convince me and the 99$ you asked me to pay for the criminal check at the end of the meeting was a cheap shot.I’m glad I didn’t give you any of my $$$ I already gave you few hours of very beautiful sunny Saturday morning.

@Gunther, the meeting you went too and environment was created to inspire You and/or someone you know. You will definitely get more from Primerica than they will get from You for $99.00. I would take what you learned and use it to empower you in the future. Not sure how old you are however at one point in your life you will be in need of financial education or financial assistance and You will remember the day you went to this meeting.

You mentioned:
– I feel any above the average intelligent person will walk away from these recruiters..

My opinion:
– It can be the opposite as well. One may believe to be too intelligent that they may not be aware of an opportunity sitting in front of their face.

to your success

As far as Primerica as a company When ever we worked and put in time we got paid. Primerica paid put over 250,000 to a friend of mines family when they lost there mother. Saved there home and paid for college tuitions. Has 1,000 of dollars saved away for fathers retirement. Has put a lot of extra part time money in my families home what more is there to say about a company that could do that for anyone?

BLW, your spelling and grammar is horrible. Any financial services firm does those things you mentioned for families daily. I have no problem with Primerica. What annoys me is how Primerica brainwashes their agents and clients into thinking every person and company is out to screw them if they are not Primerica.

RUN AWAY FROM PRIMERICA!!! Overpriced life insurance and poor trained agents

I signed up for Primerica under a friend who recruited me even after reading blogs like this and I feel mixed but I think success can be achieved if you think independently and are intelligent and patient.

First, anyone arguing representing Primerica on this blog with terrible spelling is just proving the point of the detractors about the caliber of agents.

Relative to other MLM, Primerica is fairly benign as it does allow for you to actually make some money without the risk of carrying overpriced inventory that you have to dump (like Herbalife, Amway etc) if you can’t sell it retail. .

My strategy so far has been 1 – not being pushy with selling to anyone, but mentioning it in passing if I am already discussing financial topics 2 – treat it like a part time job, but stay educated. I have other sources of income that are far more lucrative than Primerica, so I can be patient. 3 – let it grow slowly and steadily and keep a good reputation 4 – MAKE SURE YOU UNDERSTAND THE TACTICS SOME BRANCHES WILL USE ON YOU! This is important! Don’t just hand over 30 leads for “training”, don’t give in to their pushy demands to recruit more to get your “bonus”,

Be smart – if you can actually sell and are educated, you can make decent money. I have no interest in selling insurance for a living so the non-compete doesn’t really bother me. Recruit only those who maybe have no other job prospects or understand the system, pay for their fees and at least try to get to a level where you get a slightly higher override for your own sales.

It’s amazing how many comments on this blog are negative!! I wonder how many of these negative people are making these comments on their lunch break from their minimum wage job. The “above average person” of intellect, if they truely were above average, wouldn’t be making derogatory comments that are meant to tear down the efforts of a group or individual to make their aimless life more meaningful. Small minds tear down to lift their insecure selves to the level of their target. Live long and prosper if you can making $7.50 an hour.

Whether it is Primerica or Amway, or Mary Kay, any MLM-oriented company is what YOU make of it. I know individuals who are successful in all 3 companies. If you are new and are about to attend one of their larger, recruiting meetings, do this: ask your recruiter to actually see paystubs from anyone they trot out there billing themselves as a “success.” After a Primerca meeting I attended, I did that and all 4 people that the company had speak either declined or said they’d “get back to me.” None did.

[…] bloggers have gone after quasi-pyramid schemes like World Financial Group and Primerica – financial services companies who seem to make more money recruiting others to sell […]

I see a lot of negativity about Primerica and i’m aware that not everyone is ethical in the business or does the business the right way. You can go to ANY company and see this. Is the marketing and prospecting done a little unorthodox? Certainly, but word of mouth was the only way of marketing back in the day and still to date one of the most successful ways. The people who say “when you bring a recruit in, you get paid off their warm market” aren’t even taking into fact that A) you’re giving these people experience and building a rapport for them, B) they’re getting bonuses b/c they can’t write any business legally (why expect to get paid off a business you can’t legally get paid from until your business is licensed?) and C) you’re getting them referrals so that once they are licensed and have the proper field training, they can become independent and do their own thing! There are TONS of people who refuse to recruit and still make good income off their own pen. You don’t NEED to recruit to make money, but if you would like more money+freedom, then you CAN recruit. You don’t build a team who spends every second of their life recruiting. They prospect and train all in the same time frame. Primerica is more customer driven than product driven. Many non-capture agents just push products to get commissions, products that aren’t in the best interest of the customer usually. I’ve met head to head w/ several agents like that who have admitted being predators. We do not PUSH products that families cannot benefit off of.

Pyramid schemes do not allow you to move past whoever brought you into the business. Primerica allows you to pass someone who brought you into the business if they aren’t working as hard as you. Where else will you get that? So who has worked their butt off for a slacker and wished you was above him in the food chain? You can do that w/ Primerica. Just like with any job, nobody comes out of the blue day one and knows everything about the job. They go thru what? Training. That technician you wouldn’t let touch your car had to touch someone’s car FIRST after training was over. Same rule applies here. Hope I was able to clarify some things.

I am a WFG agent. I have to say that there is a tremendous amount of misunderstanding regarding the process of “giving up” a portion of your warm market to your trainer.

Why is this not a bad deal for the new recruit? First of all, the recruit knows nothing about the business and is not licensed. Training takes the time of the trainer who would otherwise be writing their own business elsewhere. The point is you want your trainer to show your closest people that the company really does benefit them through proper insurance and investing.

This is why I had no problem approaching those who are closest to me. I had no problems giving up all those initial sales because I want my friends and family to have the best service possible. Something I can’t give without experience in the field and watching how it is done correctly. Which is more caring for your close friend? Asking them if you can experiment on their money or introduce them to someone who can really be of help and won’t screw up? Which of the two will give you more credibility as far as your motives are concerned? Do you know which forms to fill? how to evaluate the needs? what are all the issues that need to be considered?

I had one friend say to me when I started he would wait until I got licensed then purchase insurance for his family. I said getting you protected now is more urgent than me making money now. What if you die while waiting for me to get my act together? When the closest people see the best of what your company can offer and they are happy with it, they will refer their friends and family to you as you grow in knowledge and skill. If they don’t, something went wrong. The long-term success of your business is with people referred to you by those who were helped initially. You will be known for your deeds and people will talk accordingly.

I too felt it was is counter-intuitive but it works. It is a system based on giving that keeps on giving. You give your trainer the sale and he gives you his training and skills. Keeps you from screwing up. You give your family or friend the best of the company and they give you referrals in return. You learn to do the business right the first time; what is that worth to you?

No one bats an eye giving up $40k and a few years to go through college for a profession. Why would you be unwilling to give up a few thousand dollars over a few months to become a well trained advisor with a strong support team?

So I was approached to do this primerica thing so here doing research, and just realized by definition stated above, I work for a Pyramid scheme. I work for a Fortune 100 Company tech company as an IT Consultant. My job is to meet with potential clients, sell them my services, perform the services and bill for the services. I receive a base pay plus bonus for what I bring into the company. In turn my Manager whom produces nothing, gets paid for being a manager and his manager gets and receives bonuses on what several of the other pillars under his management receive. This is propagated up 15 levels of management to the CEO.

So my view is that nearly every company on the earth is structured as a pyramid, and the higher you go up from the base, the higher people get paid while the majority of the actual revenue building work is done a the lowest levels. I know that I am given a paycheck, but the condition behind this check is I must sell and meet my quota which is 92 times my annual salary. If I don’t hit my numbers, then they may get rid of me at any time. Have seen many of my co-workers laid off recently and their jobs go overseas, they called it re-alignment of skills, but we all know it was to allow the bosses to get bigger bonus checks.

Now I understand that a true pyramid you cannot get promoted higher than your boss (recruiter) where as a MLM which is what I see primerica follows you can get promoted higher than your recruiter, but there will always be someone over you that gets a cut of your business. This is no different than corporate America so do not see the negative side of this except you have to actually do work.

I come from a family that has a large real estate brokerage firm and it appears to be similar in structure, but am still in research mode and hold my opinion at this time.

I understood almost everyone’s comment here except for ANSWER THIS. If you are as vague as how you write here, I don’t see you see succeeding in anything you do at all. Sorry for this comment, but really, you are not making sense at all to me. Do you read over what you write? I did try to read and make sense of what you are saying but half way through, I just decided to just make this comment coz.. really… you don’t make sense at all. I’m happy to get a line from you that would enlighten me of point but such long blogs with no sense in the most part,,,, Really frustrating. I am not referring grammar at all but just simple a clear point of what you are trying to defend or explain.

I am sure, for the most people who tried to respond to you, they had to rack their brains to understand what you are saying and just simple tried to respond to what they got from a line that they understood.

I am just curious though, as a Marketing person or businessman, what do you do or sell in your company? How do you make money? Until when do you have to do your job to be financially independent and be called decent and not cutting the buck from the efforts of others?

Great article on Primerica financial services company. I think it really exposes the details behind the company!





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