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World Financial Group (WFG) Review: Scam or Legit?

Last updated Jan 5, 2021

If you’re reading this article, chances are you’ve been either approached to buy a World Financial Group (WFG) product or to start working for WFG as a financial advisor. 

You might be curious but may also be wondering: Is World Financial Group a scam? 

You’ve probably heard whispers about this from other friends or colleagues warning you that WFG is a scam, which I believe is a common occurrence. 

In the finance industry where I had worked for over a decade, World Financial Group doesn’t get a lot of respect amongst its peers. But as of 2019, WFG has over 42,000 associates working for them. In 2018, WFG paid out over $792 million in commission to its associates. 

Say what you want about the company, but there’s no denying that it is a huge global force and one that requires close examination. Let’s go over this World Financial Group (WFG) review to see if it is a scam or legit.

world financial group logo

Review of: World Financial Group (WFG)

Use: MLM Financial Planning

Wealthawesome Score: 1.5/5

Summary: Is World Financial Group (WFG) a Scam or Legit? Read this World Financial Group WFG Review to find out.

What is World Financial Group?

world financial group logo

WFG is a company that sells financial planning services. The company sells savings, insurance, and retirement products through its associates, who usually have to pass a licensing exam for the country they live in.

The company was launched in 2001 by an insurance company called Aegon. In 2008, another insurance company, Transamerica, purchased WFG from Aegon. The company operates in Canada, the U.S, and Puerto Rico.

Is WFG a Scheme or Scam?

scam

I wanted to answer this question right off the bat. In the literal sense of the word, no, World Financial Group is not a scam. The company will not take your money as a customer and give you nothing in return. That’s what a pyramid scheme is, and WFG is not that.

If you join the company as an agent, you will have the chance to earn an income and need to be licensed in order to directly sell any of these products. WFG is approved and regulated by the financial governing bodies of the countries that it operates in.

However, where many people are turned off of WFG and wonder if it is a scam, is due to its sales tactics in acquiring customers, and multi-level marketing (MLM) methods of hiring agents to work for them.

How Does WFG Hire Associates?

WFG employs a Multi-Level-Marketing (MLM) business model for its associates. The way it works is after you get hired onto WFG and pass all the licensing exams, you’ll have to recruit new associates.

After you join WFG, you’ll be encouraged to get off to a “fast start,” where you are supposed to recruit 3 new members and sit in on 3 training sales within the first 30 days of the company.

This aggressive approach to recruiting new members sets off alarm bells in my head. Getting these new recruits and associates is another type of sales tactics.

Any products that those associates either buy themselves, or sell to other people you’ll get a percentage of the commissions. A lot of WFG’s sales come from it’s associates themselves. It’s a classic MLM business model, and one that should be a huge red flag in choosing to work for WFG. Their own website shows the multi-level shape of their business model.

world financial group review
Source: WFG website. Their own website shows the multi-level shape of their business model. 

How Much Money Can You Earn at WFG?

salesperson

You will only receive money as a commission if you sell something at WFG, or if those associates you recruit under you buy or sell WFG products.

Even ignoring all the negative connotations that come with MLM companies, I’ll give you an example of why WFG is not a great place to work. Let’s take a look at the WFG contract levels, which is the amount of commissions you can earn for say something like life insurance.

If you can have a contract level of 100%, you will earn 100% of the first-year commissions on top of what your commission structure is.

When I first started out as a life insurance broker, I had an 80% contract level to start, and it increased to 140% near the end of it.

According to this report, a WFG Associate contract level is a measly 36%, and a Senior Marketing Director contract level is only 64%.

There are other better and more reputable brokerages out there. If you are willing to get licensed, they can also train you and support you better than WFG, and give you a larger payout.

How Does WFG Get Its Customers?

WFG relies on its associates in two ways to get customers. Firstly, any of the products the associates themselves purchase, essentially turn them into the customers.

All those new associates will be immersed in WFG products and culture, and probably end up buying products themselves. Then, they are forced to aggressively try to get more associates, spreading the WFG product line and sales almost like a virus as it multiplies down the levels.

As an associate, you’re expected to make a list of all your friends and family and approach them to sell your financial products, or to recruit them as an associate for WFG.

But that is typical of MLM companies, and I don’t want to knock WFG specifically. They aren’t doing anything illegal, but I just think it’s a terrible business model for both customers and associates, and there are so many better products and options out there. But it obviously works, as WFG has a tonne of sales. If anything this just shows the power of “warm” leads and buying from people that you know and trust.

As a former sales guy, I think that WFG must have an extremely effective pitch for new members because it is obviously working and getting results. But as an investor or insurance purchaser, I would never hire a WFG associate.

I get it though, investing and insurance can be intimidating, if you’ve never worked with numbers or cared about it before, the whole process can be daunting. But put some time in, learn how to start investing, and take control of your own finances.

If you need to hire an advisor, try to find a properly trained fee-based one, and one that won’t just try to charge you an annual fee on your investments and never speak to you again.

Is WFG a Legitimate Company for Customers?

Yes, WFG is a legitimate company. If you purchase an insurance or investment product from them, you will receive the product.

However, there is a limited number of companies that WFG is associated with, so your product selection will be limited to those companies.

Also, you may be pressured into purchasing expensive products that may not be the best for you, such as permanent life insurance or segregated funds, but will earn the associate selling it a big commission.

Often, the associate you are dealing with may not have very much experience also, and will likely try to recruit you to become an associate also.

As a former life insurance agent and financial advisor, I can understand the success of WFG. The secret to WFG is its method of using what we call in the industry as “warm” leads. You’re much more likely to buy or trust someone that you know. Multi-level marketing relies on this, and you’ll see it applied to many different businesses, the most successful one probably being Amway.

Should You Become a WFG Associate?

MLM/Multi-level marketing

In my opinion, it is very difficult to make money with this business model. Yes, there are some success stories, and in its marketing materials, there will be descriptions of people getting rich at WFG. However, it will be a very tiny fraction of the overall recruits.

Sure, if you’re willing to hustle your butt off, contact all your friends and family, and aggressively pursue new sales prospects then yes, you might be able to find success with WFG. But if you’re this much of a go-getter, why would you stick with a company like WFG?

You’ll also risk damage to your reputation, and maybe even your personal relationships. WFG almost has the same negative stigma as Amway does. You could become known as the “pyramid scheme” person behind your back and to be avoided in social situations.

Why I Hate MLMs

I’ve been pitched multiple MLM ideas over the years, ranging from smoothie drinks, painting business, Amway, and many more. Here are some of the reasons I hate MLMs

  1. MLM pitches are annoying and misleading, and always sell the same kind of story: recruit 3 other people, and they will recruit 3 more, then you’ll have hundreds of people working for you, all while making money on whatever they sell!
  2. If someone I know pitches me an MLM business idea, it makes me think less of the person and want to avoid them in the future.
  3. While selling something like smoothie drinks is relatively harmless, having this business model for something so vital as investment products could have a direct harmful impact on customers by not having properly trained advisors that have your best interests at heart.
  4. It’s very difficult to climb to the top of a MLM company and actually start making really good money.
  5. Any business model that places more of an emphasis on recruiting new members rather than customer needs in order to make money is one to be cautious of.

World Financial Group Alternatives

Employee

Instead of working at WFG, you can get licensed on your own to sell investment and insurance products, and start working for an insurance or investment brokerage. I mentioned before that I worked for an insurance broker in Canada that had way higher commission payouts than WFG has. You won’t have to worry about the bad reputation that WFG seems to have among some consumers. You will also get trained up at these brokerages.

Customer

As a consumer, there are countless other options. If you want to invest your money, you can look at robo-advisors if you need a little bit of advice, or discount brokerages if you want to learn and construct your own portfolio. If you need an advisor, try to find a fee-based advisor that is not incentivized to push you towards a certain product.

For insurance, I would recommend trying to find first an online quote from multiple companies, then find an insurance broker that has access to those companies.

Conclusion

While WFG may not be a scam, I would never work or buy any products from them, nor would I recommend any of my friends or family to either. I believe there are so many other better options, in terms of choosing a career or buying financial products.

WFG Review Scam or Legit

Christopher Liew, CFA

Christopher Liew, CFA

Author Bio - Christopher Liew is a CFA Charterholder with 11 years of finance experience and the creator of Wealthawesome.com. Read about how he quit his 6-figure salary career to travel the world here.

23 Comments

  1. PEN Moon

    Hi If I bought some product from WFG and if I know that is not a good option, what should I do?

    Reply
    • Christopher Liew, CFA

      hi there! You’ll have to contact your WFG advisor and ask him what the exit options are for your investment

      Reply
  2. Jayme Gagne

    So say I’ve completed their training program and passed wfg provincial courses in canada. Does this make me potentially employable to other brokerage outlets? Is this sometime thing that will be useful for me in the long run ?

    Reply
    • Christopher Liew, CFA

      Hey Jayme, yes you should be able to work for other brokerages, the licensing process should be the same. Sure, it could be useful in the long run. If you’re already invested in the process with WFG it might be better off to finish it and see what you think about the company first-hand.

      Reply
    • Anestasia

      Yes your license is with the province you reside in. So once you obtain your license you can take it to a different broker if needed

      Reply
  3. Matthew

    Hi Christopher, I’m going to offer my own succinct but respectful rebuttal of your post here. I’ve contracted with WFG for a couple years now.

    While it’s clear that you know your way around the financial industry, I believe your summary of this company is too simple, and in some places inaccurate. I hope to offer some level-headed clarity.
    In no particular order, here I go.

    First and foremost: WFG is an operating platform/toolbox. You take agents and agency owners one at a time. You can’t be too liberal in saying “WFG does this, or practices that.”

    The agency I’m apart of places a massive emphasis on doing the very best thing for clients every time. Recruiting IS important to us, simply because a ton of families out there need better financial service than they’ve been getting (check Stats Canada). And because a lot of people could use a second income stream, twin career, or even career change. Virtually every company in the financial industry is hiring and/or recruiting right now. I’m happy to recruit because I was looking at becoming a career coach anyway. I know I can deliver industry-standard training. Doesn’t mean I’m aggressive or cringey about it. I hate that as much as anybody else.

    Being top-notch at helping families as well as building an agency are not mutually exclusive. I’m one of the best at what I do because I’ve poured ENORMOUS effort into becoming so. But, partnered with around 70 companies throughout Canada, including many industry leaders in banking, insurance, and investment, I can shop the market and be pretty sure I’ve come up with a rock-solid solution for my client (cost-effective insurance, robust fund investments, whatever). There are no “WFG products.” We just have favourite companies for specific services, because we believe those companies are the best at what they do.
    You also need to factor in that some of our partner companies hired entire divisions of employees to train WFG agents to know their stuff inside and out.
    I’ll acknowledge that it can take longer to become genuinely skillful in WFG, simply because we have more products to learn from more companies than most.

    You say that an agent could go and work for any insurance brokerage or investment brokerage – that’s precisely what we do here. No different – just a bigger toolbox than most. It’s called a Managing General Agency (MGA).

    I also disagree with your recommendation to find a fee-for-service advisor. These professionals make a happy little profit even if their client goes bankrupt. Our passive paycheck grows as our clients become wealthier (and vice versa), and so we have all the incentive in the world to make sure our clients are doing as well as possible.

    So, no. There’s no obligation to recruit. I know plenty of agents who make 6-figures or multiple six-figures just by helping families personally. This is because our industry pays well, and you can do that at many companies if you’re genuinely good at what you do. Therefore your comment about it being impossible to make money at WFG because it’s MLM-ish is nonsense. It’s a more difficult industry than many, I’ll give you that. But the statement that you have to climb to the top to make money is simply incorrect.
    An advantage of recruiting is that I don’t have to continuously look for more clients to grow my income. I don’t know about you, but I don’t want a 1,000 client workload when I’m 60 years old. 100-200 is plenty, and I can focus on giving great service to that smaller number.

    Regarding compensation, something you said in here was straight-up incorrect and misleading. When you said a WFG associate makes “a measly 36%” whereas you made 80-140. You’ve mixed your concepts here. The stuff you’re talking about is called “First Year Commission” which is total revenue paid to your company upon a sale. Personal commission is how much of that lands in your pocket. First Year Commission on products we are authorized to distribute is typically 110%-160%, depending on the nature of the product. So there’s a flat revenue to the company, and an agent is paid on that based on the seniority of their contract. I’ve spoken to a lot of agents at a lot of companies – our pay is perfectly comparable. Not necessarily the *very* best, but there’s certainly nothing wrong with it.

    In short, Christopher, I appreciate what you’re trying to do here. You’re trying to provide value to your readership. Kudos. I truly mean that. But you do need better information and more first-hand information before you can render an opinion on a company like WFG. I think you also need to speak more to what the company’s vision is and where its heart is. I haven’t seen a company that cares as much about distributing basic financial education to the masses as WFG, but you don’t seem to have much to say about that.

    Reply
    • Christopher Liew, CFA

      Thanks for the very detailed response Matthew. Do you happen to have any referring documents for the compensation? I was going off the compensation report that I link to in that section. And I did mean I got 80% on my First Year commissions to start vs the 36% listed in the report, so I don’t believe I confused my concepts.

      Reply
      • Matthew

        Hi Christopher, I had realized actually that I misread your comment about commissions and was coming back to apologize for that, haha.
        I’ve heard several veteran agents in our business comment that you could possibly do better with other companies if your sole intent is to sell financial products, since other companies pay better for newcomers, though our senior contracts are very comparable.
        For me though, any shortcoming I might have in compensation compared to another company is made up for by the satisfaction of knowing I can tailor-make a plan with top resources for a family, and get paid perfectly well for it. I believe it also more consistently helps meet acquire and keep clients if I can consistently demonstrate that I have the resources to improve on what someone else might have set them up with.

        What we have, though, is the ability to build an agency if it suits us and grow additional income that way.
        I do have access to compensation slides, but since I am unaware of the confidentiality regulations concerning the companies involved, I’ll err on the side of caution. It would also be a great deal of information as the agreements/compensation have some variance by company.

        Also, Merry Christmas!

        Reply
        • Christopher Liew, CFA

          Hey Matthew thanks for the update! I’m glad to have had this conversation with you. Merry Christmas and have a Happy New Year also!

          Reply
    • Leti G

      To All interested parties- Christopher L was just giving the facts about a company and how they do business. Taking care of your family and friends is very important. Doing what is right by others is the best example of your character. The Truth will always set you free and honesty is still the best policy.
      We live in a great country and each one should make the best decisions for their life and family. Give and you shall receive.
      Term Life is the best way and most economical for families. Also investing in different areas depending on your current age group with diversification. I would recommend all families to take a course in finances & economics. Also contact a friend or family member in your network who can give you the best advice who has 15 to 25 years of experience. They have a wealth of knowledge & wisdom to share with others.
      Be respectful of other’s opinions & knowledge and then make your own decision. Being a person of good moral character and of good reputation is worth more than all the gold in the world. Remember that God is watching what we all do in this World and how we treat each other. Thank you Christopher L for caring for others and for helping us to make our own informed decisions. We all have alot to learn from each other. Best Wishes, stay healthy & Much Success.
      Blessings in 2021! Mrs LG. (Austin TX- Senior & grandmother, & Mother of Adult Sons.).

      Reply
    • Rachel

      WFG is a MLM. I started making 25% commission and stopped after realizing the enormous amount of red flags. I can not with good faith and conscious put clients in front of them bc of the advice they gave to my clients.

      Pull out your 401k and place it in a insurance policy.
      Use your principal payment for your mortgage on your insurance product. (Cringe worthy advice)

      I am very aware that any company has shady people. I am also aware that I can move my license and get proper training and still make good money.

      Proceed with caution if your considering.

      Reply
  4. ML

    I just had an interview and consented to pay 130 $ to move on with them. But now after reading your page, I am disappointed. What alternative to WFG do you suggest?

    Reply
    • Christopher Liew, CFA

      It depends on a few things. Are you passionate about personal finance and want to make a career out of it? Or do you want to just earn some extra side income and this is just one way to do it?

      Reply
  5. Susan

    Me and my husband were a former WFG agent and just terminate our agent yesterday and yes, I hate MLM type and that’s the main reason we quit, even we already get my insurance license, we will join another company that not just giving 25% commission and when the first time we join WFG, my friend that recruited us didn’t say anything about recruiting so yes, I feel being cheated by him and I hate him from that day and we never speaking again. And I hope that nobody will go to the same thing as I do.

    Reply
    • Christopher Liew, CFA

      Hi Susan, I’m sorry to hear that you had such a bad experience, I’m glad you are on a better path now.

      Reply
  6. Julie

    It is not true that they require you as a new recruit to recruit 3 people and attend 3 meetings in the first 30 days. Not at all. They encourage it but it not hard to do. But you do not HAVE to do this. I am a new agent and have never been pushed or told I am required to do anything. But that is a way to make money in this business legitimately. It is a great business.

    Reply
    • Henri

      3 new members and 3 new solutions is a requirement after licensing in order to receive compensation. You must do this each month.

      Reply
  7. Victor

    hey chris nice article, btw how do you only make 6 figures as a CFA lmao, worth it going through all that studying and time committment just to earn 6 figures as a CFA?!

    Reply
    • Christopher Liew, CFA

      Thanks Victor. Wow, you make 7 figures a year, so over $1 million a year? That’s really impressive.

      Reply

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