Complaint Review: Primerica Financial Services

Bobby, your tone of objectivity is appropriate. Primerica isn't Satan reincarnate out to destroy lives.

While I find the sales pitches and meetings I've been to sleazy, mildly misleading, and pep rallyish I agree that if someone is interested in sales there is nothing wrong with Primerica. Also agreed: people should try it out part time first.

While not a Pyramid scheme, Primerica IS an MLM though. Read this definition presented at an IMF seminar in 1998 by Debra A. Valentine, General Counsel For The U.S. Federal Trade Commission.


"Some people confuse pyramid and Ponzi schemes with legitimate multilevel marketing. Multilevel
marketing programs are known as MLM's,(4) and unlike pyramid or Ponzi schemes, MLM's
have a real product to sell. More importantly, MLM's actually sell their product to members of
the general public, without requiring these consumers to pay anything extra or to join the MLM
system. MLM's may pay commissions to a long string of distributors, but these commission are
paid for real retail sales, not for new recruits."

My biggest problem with PFS isn't because of the MLM so much as the poor product they are offering. High interest refinancing, more expensive term life, and heavy load Mutual Funds. I especially find the $MART loans sleazy when they argue that interest rate doesn't matter. They hide the effect of the rate through an extra payment plan. They then show that overall someone pays less with the $MART loan than with their low interest one. This is only true because of the early payments. If a person made the same early payments on their low interest loan it would be paid off even sooner and for less total payout.

Finally, the reps are too poorly trained. The basic concepts of debt reduction are good for everybody--but anyone can do them. Buy term and invest the difference is a good policy but only 95% of the time. They have little experience with estate planning and other nuanced areas of personal finance. Their lack of information can cost people large percentages of their wealth.

Sorry, Bobby, but PFS is an MLM. You aren't allowed to make up your own definition of MLM before deciding.

If you don't believe it, check out the Press section on Primerica's own site and check the number of articles they site which refer to it's MLM or Network Marketing nature (legally, those two are the same).

I think it is prudent for all those getting involved in Primerica to ensure they know all about multi-level marketing, since that's what they are getting involved with.

I am a former Primerica representative who left the company about six years ago (after five years with them), and things apparently have not changed. Many targeted recruits still feel deceived after attending an interview/opportunity meeting, and some Primerica "recruiters" are still using canned scripts that offer only a vague explanation of the company's offerings.

To set the record straight, I want to offer my two-cents to help all of the disgruntled "recruits" better understand what it is that they have actually been offered. None of comments herein are meant to defend the company, but there are truths that deserve to be heard. Here goes nothing!

STRUCTURE
Primerica is not a Multi-level Marketing (MLM) company, neither legally or structurally. Because the company sells securities-related products and services as well as insurance and annuity products, it is classified as a "General Agency". Because Primerica allows wholesale recruiting and uses many of same terminologies, the differences are not immediately obvious; none-the-less, there are differences.

The primary difference to be noted is the fact that MLM companies are founded on the concept of recruits buying products from "uplines" who buy their products from their "upline" and so on and so on. Once I buy products for myself, I can choose to sell those products downline to my recruits and profit from it. Simple enough.

Conversely, a General Agency system as used by Primerica is identical to the agency system used by any insurance company. It is naive to think that Allstate insurance agents whose names appear on marquees don't have their own managing agents they must report to.

But key difference to be noted is the fact that Insurance Commissions and the SEC do not allow agents (from any finanial services agency) to sell insurance or securities products they personally own to other people, namely other agents they recruit. For example, if I bought a $200,000 life insurance policy and a mutual fund IRA for myself, I couldn't sell you my portfolio just because you need life insurance and an IRA. You would be required to purchase your own portfolio of products.

RECRUITMENT
I agree that Primerica uses non-traditional tactics and strategies to get people in their offices for a combo sales/recruiting presentation. The theory is this: If they can't get you as a recruit, then you might be interested in their life insurance, debt consolidation or securities products. After all, you will ultimately own one of their products in your lifetime, even if its from another company, right?

If you do decide to join the company as a representative, then by default, you SHOULD own a Primerica product. Even the CEO of Ford drives a Ford (Ford owns Jaguar and Volvo as well, so reserve your snickering). Anyone in sales accepts the mantra that a good sales person has enough conviction in his or her company and product to own the product (Sales 101).

So, should you get nervous when your Primerica "job interview" turns into a mini rally session? Sure. If you weren't expecting it, then you should feel a little nervous, but if your recruiter offers disclosure, then you shouldn't complain. Unfortunately, the fear of being compared to MLM organizations causes many inexperienced agents to withhold information about the nature or structure of the "interview".

To the recruiter's credit (and I've witnessed it personally), many people who attend an opportunity meeting with skepticism often leave the meeting with hope. That hope can come from the education they receive about how to better manage their money, or it could come from the opportunity to make an extra $500 per month part time on their own time. One size does not fit all.

Any yes, Kristin, the majority of recruits use "a little script". So do telemarketers, other insurance agents, customer service reps, and airline stewardess. In fact, the most highly paid people in the world, actors, make a living doing little more than memorizing scripts.

To be honest, you can typically tell the new guy from the old hat because the old hat will use a script on you, too, but you will think they are saying it off the top of their head. Scripts simply keep continuity in the "story" the company is trying to tell.

In other words, if the recruiter's VP knows exactly what was said to get you into the office, then surprises are kept to a minimum. There are also legal implication which makes the use of scripts preferable over ad-libbing. Remember, Primerica sells highly regulated products and service, so script keep new recruits (and their managers) out of hot water.

My final comment is on the "pitch" they gave you about meeting with a vice president and managerial opportunity.

Primerica's Regional Vice President position is earned by meeting sales goals whereas other non-agency jobs require certain degrees or departmental experience to achieve the VP office. This makes sense since Primerica is a sales organization. In fact, every position in the company must be earned through sales volume generated either by yourself or by your team.

The abililty to recruit a team as new recruit is actually a blessing because it allows you to reduce your workload. The collective efforts of the team add to your sales figures thus helping to propel you up the ladder more quickly. This is no different than any department head in Company X whose effective management of a team (departmental staff) earns them quarterly bonus checks. It's all quite similar, really.

And if you want to locate a Primerica office near you, don't use a search engine. Instead, use something like http://www.bigyellow.com or http://yp.bellsouth.com. Type in "Primerica" for the company name and chose your city and state. Every office run by a RVP will pop up. Nobody is hiding, I assure you.

As far as this Web site goes, it's just another sounding board for misunderstandings and grievences, but when you cut through the fodder, Primerica has done more good than bad for clients and its own agents. You should join the company part-time. Maybe you can teach their reps a lesson on the "right" way to ask someone to sell insurance.