Source
r/Scams•
Flyboy142

Is Primerica a scam?

(FYI I'm in Canada)

So my cousin is a certified financial advisor and I trust him well, but I want to know what this sub thinks.
He's involved in Primerica, which I understand is a blatent MLM, and 2 years ago he had me set up an RRSP investment plan through Primerica. I've been sending them $200 a month, and every year they send me a statement of my investments, and I've been deducting them from my taxes without issue.
Even though the investment account is managed by Primerica, as I understand, the money is invested with AGF, which seems like a legit financing firm to me.

My cousin gets a small kickback from my investing, but he tells me it's literally just a few dollars per transaction.

I wondering if my RRSP is safe or wise? I have what's called a "Black Rock Fund" portfolio, whatever that means. He says my investment is supposed to grow by 7-13% a year, and if I put in 5k a year, I'll have enough to retire early (I'm currently 24).
I'm wondering why couldn't I just set my portfolio up through AGF directly? Am I losing money by using my cousin/Primerica as a middleman?

Edit: ITT people think I'm some kind of MLM zombie for literally asking questions and correcting facts about my situation. Classic reddit hivemind. Thanks for those who actually decided to be reasonable and not just jerk themselves off in my thread.

Posted Aug 22, 2018, 5:06 PM UTC · edited

8691
DPMx9Quality Contributor•

He says my investment is supposed to grow by 7-13% a year, and if I put in 5k a year, I'll have enough to retire early (I'm currently 24).

He is forgetting to mention that if you invested the same amount in a retirement account with a low cost mutual fund provider (Vanguard, Fidelity, etc.), you'd earn MORE.

Because all those middlemen get to be paid. By you. For as long as your money stays invested through them.

So... choose wisely, and ignore the fact that your adviser is your cousin - MLMs teach their victims to recruit more victims from their families, churches, anywhere where they can trick new suckers into parting with their hard earned money.

98
Hiant•

Dude he's talking about Canadian retirement not US, I'm not sure vangaurd and Fidelity are applicable.

7
DPMx9Quality Contributor•

I only used those two as examples of low cost direct investment mutual fund companies.

Both of them happen to be available in Canada also, but even if they were not available themselves, there are many better choices that using Primerica as a middleman to invest into a likely more expensive fund.

6
JeanneDOrcQuality Contributor•

Dancing for nickels in the street is a better retirement plan than Primerica.

3
JeanneDOrcQuality Contributor•

Why wouldn’t they be?

2
Hiant•

The accounts are specific to the Canadian tax code you need a Canadian provider to set them up, you cant globally choose anything you want for it.

1
JeanneDOrcQuality Contributor•

https://www.vanguardcanada.ca/

https://www.fidelity.ca/fidca/en/home

​

2
Flyboy142OP•

He is forgetting to mention that if you invested the same amount in a retirement account with a low cost mutual fund provider (Vanguard, Fidelity, etc.), you'd earn MORE.

Really though? From the research I've found, my expected growth isn't outside the market averages. The DCCP from my employer is about the same expected growth.

Because all those middlemen get to be paid. By you. For as long as your money stays invested through them.

It's about 7% of my portfolio's earnings. Is that so much? Even if Primerica is sketchy, there will always be a middleman since I'm no expert.

So... choose wisely, and ignore the fact that your adviser is your cousin - MLMs teach their victims to recruit more victims from their families, churches, anywhere where they can trick new suckers into parting with their hard earned money.

Sure, I get that. His higher up was definitely sketchy, but my cousin never tried to recruit me. He said he never gets more than a few dollars a year from me.

-9
emergentphenom•

Here's a quote from Vangard's site:

Imagine you have $100,000 invested. If the account earned 6% a year for the next 25 years and had no costs or fees, you'd end up with about $430,000.

If, on the other hand, you paid 2% a year in costs, after 25 years you'd only have about $260,000.

That's right: The 2% you paid every year would wipe out almost 40% of your final account value. 2% doesn't sound so small anymore, does it?

29
MABEAL84•

There will always be middlemen, sure. But by going through them you are adding extra middlemen. If you know which bank or fund they are investing with, why not just go to them yourself? Instead you’re giving 7% to the MLM, then giving more to the brokers at wherever they stick it. You could just go to the brokers yourself and save that 7%

25
Flyboy142OP•

I wasnt aware that's how it works. So say, AGF is supposed to have their own RRSPs set up?

0†
MABEAL84•

If they are sticking the money in AGF it means that AGF actually owns and manages the funds and Primerica is just a no cost to them, scummy business that goes out and poaches new customers. Then the customer (you) are paying for Primerica to headhunt you for AGF’s business. All along you could have just walked into AGF and asked to speak to an advisor who will help you with your money. Sure the advisor gets a cut, but you’ll end up better off than going with Primerica.

11
toolbelt10•

Please don't downvote Flyboy. Their arguments alone are the best defense against MLMs.

6
grokforpayQuality Contributor•

It's not a "scam" but it is a terrible place to invest. Yes, you are losing money.

78
Flyboy142OP•

Okay, so what makes it terrible?

10
grokforpayQuality Contributor•

You're paying 7% of your earnings. That ends up being a TON of money over time, since you're losing your compounding on nearly 10% of your return.

Primerica offers nothing that Vanguard, Fidelity, and many other places offer for MUCH cheaper.

48
JeanneDOrcQuality Contributor•

Primerica offers nothing

A series of pyramid-structured salespersons!

27
NeedsSleepy•

It’s just a reverse funnel system.

7
NeedsSleepy•

Primerica is a multi-level marking scheme. See r/antiMLM. Repost there for additional info on what a horrible, predatory company that is.

You can invest for yourself without participating in this nonsense. See r/personalfinance or r/bogleheads if you’d like help with that once you break contact with Primerica.

52
JeanneDOrcQuality Contributor•

MLMs teach you to

  • Fuck over Family, Friends, and Relatives (FFR) because they trust you
  • “Fake it till you make it”, aka lie about your success and exploit others with lies.

“certified financial advisor”

I would verify his actual credentials versus taking at face value. Again, MLMs work though falsehoods.

39
Flyboy142OP•

I have. It's a real certificate, he got it before ever getting involved in Primerica. He's a smart guy that has partnered with my dad (who is a self-made entrepreneur) to make money in real estate in my town. But he's also really grandoise and ambitious, which is why I dont trust him completely.

-8
NeedsSleepy•

Certified Financial Advisor means nothing. It’s equivalent to nutritionist or reiki master; there are no set of qualifications to use that title.

Also, and most importantly, you shouldn’t want anyone who’s clueless enough to get wrapped up in an MLM scheme managing your own money. It shows that they have no idea how to judge the income potential of an investment.

25
toolbelt10•

Or even read their company's own annual reports

10
NeedsSleepy•

A valid point. I’m sure the income disclosure is telling.

6
JeanneDOrcQuality Contributor•

It's a real certificate

I’m not questioning that he has a printed certificate, I’m questioning that whatever he has is from a reputable source and means literally anything for the industry he’s operating in.*

But he's also really grandoise and ambitious, which is why I dont trust him completely.

Grandiose + MLM = you’re an outstretched wallet to him.

Again, he hustles. Trust your instinct over his promises and whatever he claims.

*Edit: It’s a crackerjack box prize level of qualification, to be specific. He paid money to nobody of note (probably Primerica itself) and printed it out. Now he has a piece of paper with his job tile.

He is NOT LICENSED TO DISCUSS INVESTMENTS BY ANY REPUTABLE AGENCY.

22
Syllogism19•

My uncle was a certified financial advisor. Also when his 99 year old mother died he got her car because he needed it. Even though he had an doctorate in Education he repeatedly tried to access his mother's accounts to pay his bills.

5
34HoldOn•

Yes. All MLMs are scams. Anyone who tells you differently is a shill.

Look up the numbers for what most MLM distributors make. It's dogshit. r/antiMLM

30
bloomingOrchids1•

Check out r/antimlm and search primerica. You'll see some of their scammy tactics. Your cousin is using you to make a quick buck--if he is even making any money at all.

28
Flyboy142OP•

He isn't. He ends up making about 50 cents a month off me.

-8
UltraMegaMegaMan•

Are you sure you actually want advice?

Because you pretty much knew in advance this was a bad deal, you ask for advice, everyone tells you that it is actually a bad deal, then most of your responses are to defend your cousin or rationalize why it's ok.

Either way, you got your answer, and it's the right one. Your suspicions are correct, this is not a good deal for you and there's no reason to do it this way.

Ball's in your court.

35
Flyboy142OP•

Because you pretty much knew in advance this was a bad deal, you ask for advice, everyone tells you that it is actually a bad deal, then most of your responses are to defend your cousin or rationalize why it's ok.

Um, what? Kindly point out where I stated I'm "defending" anything. Someone said my cousin made money. I'm flatly correcting that he isn't. Not only am I not defending anything, the correction I'm stating just makes Primerica look worse.

Calm the fuck down dude.

-12
UltraMegaMegaMan•

Like I said, defensive.

Good luck with it man.

16
JeanneDOrcQuality Contributor•

He ends up making about 50 cents a month off me.

Clever accounting can promise you anything.

Edit: Even RIAs can do some funky math. I don’t trust all of them, I sure as shit wouldn’t trust an unqualified MLM shill to be giving me honest feedback on my returns.

12
binchcoin•

Then he should get a better job. Or move to the Democratic Republic of the Congo where this might represent a decent wage.

10
Neil_sm•

I think your point is, they're ripping him off too. But either way, it's not really your cousin making a quick buck off of you, it's everyone in Primerica trying to make a quick buck off of you and him together.

If he's getting $.50, that means everyone else above him in the chain (his upstream or whatever they call it) is also getting some cut. And so is "Primerica" itself, most likely. So all of this adds up, and when you factor in loss of compounded interest over time due to these fees, it adds up even more.

2
dvigorouslover•

Primerica is a MLM that works in the sense that they will take on anyone with no qualifications and give them half hearted support towards getting the bare minimum in qualifications to sell investments and insurance, while pressuring that same person to connect the person who brought them in to every single person they know who might be remotely interested in trusting them to sell them financial services.

Their fee structure is a disaster and if you try to cash out early, they will keep a significant portion of your investment because they take their full commission up front from the firm they sold the investment with, with the expectation that the investment stays for 7 years before it’s a wash.

My father in law has Parkinson’s and could no longer work as a minister and connected with a primerica advisor and fell for the promises of easy money and instant success. The advisor had my FIL introduce him to everyone he knew and sold them as many products as possible, while paying my FIL next to nothing because his Parkinson’s prevented him from being able to have enough memory function to pass licensing.

On top of that, the same advisor sold my father in law, in his 60s and with Parkinson’s, an RRSP that he convinced him to take out a loan for, and with a commission structure where the money would be tied up for 7 years because he greedily wanted his full commission upon the sale. He got a commission for the investment loan and a commission for the rrsp sale, both from a guy making $965 a month on disability.

Fuck primerica.

28
flippermode•

Op wants to know if a blatant mlm scheme is a scam. Everyone tells op absolutely. Op ask if we're sure. We say yes because of xyz. Op questions all answers as if they do not believe multiple people who are saying the same thing.

You are in very deep mlm shit. You're not even selling it and you're defending them. Have fun investing into Primerica, op.

22
UltraMegaMegaMan•

Yeah I don't get it. What's the point of asking people for advice if you're just going to try to disprove what they tell you.

Makes no sense.

11
JeanneDOrcQuality Contributor•

His cousin has obviously been grooming him to be his “mentor”, along with whatever bogus shit he’s been feeding the guy’s father.

14
UltraMegaMegaMan•

Seriously. If the dad's working with the cousin to "make money in real estate" I feel for the Dad too. The cousin sounds like a shady con man. Peddling crap financial products through a mlm and lying about it. People like that have no shame.

9
dh-in-orlando•

Late the party. I think from OP's and other perspectives, the twist is that Primerica doesn't literally just take your money and burn it, like most scams. They are actually investing your money. They are *extremely* high fee, and so using them you are paying 3X, 4X, 5X what is on the high-end of reasonable.

For so many people "scam" just means means that the $200 a month is gone. The OP is inclined to disagree because he can see he's got money invested and is probably making a few bucks on it.

1
UltraMegaMegaMan•

You should crosspost this to r/personalfinance. You'll get much higher quality advice, specifically regarding whether this is a good investment or not.

Edit: on second thought, don't. You'd just fight with them about it because you don't like the answers.

19
Flyboy142OP•

Edit: on second thought, don't. You'd just fight with them about it because you don't like the answers.

Yeah, you go ahead and keep shoving words and inclinations in my mouth to give you a strawman to jerk off over. Enjoy your imaginary world of "helpful advice".

-8
bucksfan10•

Have you read the responses? Many show how even a little bit of fees compound tremendously over time. Methinks you are a Primerica shill trying to justify his business.

15
Flyboy142OP•

Yeah, I'm aware you think that, despite having literally 0 reasons to think so.

-4
toolbelt10•

To be blunt, the type of person who researches them even a small amount, such as posing questions on sites like this, typically is neither neutral nor defensive of them. They usually ask questions to confirm their suspicions.

6
[deleted]•

They lie. I have caught them lying. In fact, I challenged their region dude to sit down with my lawyer and just let him look at the documents for their whole life insurance plan when a client brought him along to try to talk me into their scam. He refused. I asked him why they had so many lawsuits against them. He said, everyone gets sued. If anyone tries to sell you MLM or whole life insurance; RUN!

18
crazykitty123•

I didn't know that they were still even around. They've always been a scam.

18
JeanneDOrcQuality Contributor•

They spun off of Citigroup in 2010, I imagine.

5
toolbelt10•

I think you meant they were unloaded by CITI?

5
JeanneDOrcQuality Contributor•

Tomato tahmato.

2
toolbelt10•

Actually one implies who was in the driver seat over the decision. CITI needed the cash.

3
ergonomicjones•

u/flyboy142 hey man, glad you took the time to ask your question and sorry if you haven’t gotten a clear and helpful answer yet.

I want you to know that you are clearly and uniquivocally getting ripped off in this situation. I’m about to show you to what extent, and it’s going to blow your mind.

First off, I want to contextualize that absurd 7% fee for you. You can invest in a low cost S&P 500 index fund with ANY retirement account provider for a cost of around 0.1% a year. Yes you read that right. You can get invested for ONE TENTH OF ONE PERCENT, and the return of said fund will be exactly what you’re getting, 7-13% a year. In the financial industry even an expense ratio of 2% is considered very high for this kind of product, and you’re at nearly 4x that. That’s how these scams operate, they take a basic financial product and slap a huge surcharge on it and convince you that it’s not a bad deal.

Now second and MOST important, you have to understand the effect of compounding and what fees do to said compounding. Compounding is a difficult concept for people to grasp because it’s not intuitive, but it has a dramatic effect on your growth. Please see this pic of a calculation I did on your net savings and growth with each fee.

https://imgur.com/gallery/vzSLZxE

If you were starting with 5k and putting in an additional 5k a year into a low cost s&p 500 mutual fund with a 0.1% expense ratio, at 10% annual growth, you would have a fantastic 891,000 saved in 30 years.

If you were to invest the same at a 7% annual fee, you would have 250,000 in 30 years.

That’s a difference of 641,000 at the end of 30 years. I hope this is a no brainer for you. There is absolutely no reason to be investing in any product with such absurd fees, you’re doing yourself a disservice and will regret it. Hope I was able to clear some things up for you and please PM me if you have any questions.

18
toolbelt10•

Primerica preys on the naive.

5
Toger•

Middlemen and expenses make a big dent in your earnings. Those 'few bucks' deprive you of decades of compound growth.

17
Flyboy142OP•

But there will always be middlemen. Investment portfolios are handled by professionals who earn their living from investing your money.

The few bucks I mention are literally a few bucks. My cousin makes about 50 cents per transaction I make - which is once a month. There's no way 6 dollars a year is going to be missed in my retirement. My chequing account fees with my bank dwarf that.

-6
binchcoin•

d to have their own RRSPs set up?ReplysharereportSaveGive gold

level 5MABEAL845 points · 52 minutes agoIf they are sticking the money in AGF it means that AGF actually owns and manages the funds and Primerica is just a no cost to them, scummy business that goes out and poaches new customers. Then the customer (you) are paying for Primerica to headhunt you for AGF’s business. All along you could have just walked into AGF and asked to speak to an advisor who will help you with your money. Sure the advisor gets a cut, but you’ll end up better off than going with Primerica.ReplysharereportSaveGive gold

So are you like DETERMINED to sign up with Primerica despite everyone on this board telling you it's a bad idea? If so, you might actually be the *perfect* spider food for a pyramid scheme. Get a Vanguard acct, pay attention to management fees, diversify, be patient.

13
Toger•

Someone always wants to make $, sure, but why go through primerica to get to AGF -- whats their value-add? I'm guessing not much.

12
Flyboy142OP•

Is it actually possible to invest directly through AGF? I was under the impression that you always need a third party to work with holding groups likr that.

-5
Toger•

Looking at https://www.agf.com/ca/en/advisors/index.jsp it appears you can log in as an individual investor, though since you mentioned BlackRock funds I notice they have their own individual investor program as well: https://nge01.bnymellon.com/NextGenV4/NASU2/Outside.blk

​

In that scenario I don't know why you'd pay your friend to use Primerica to use AGF to use BlackRock when you can go straight to BlackRock.

11
pm_me_gold_plz•

Investment portfolios are handled by professionals who earn their living from investing your money.

They typically don't beat the market, though.

12
toolbelt10•

Actually a random dart board approach has beat the investment guru's each and every time.

3
pm_me_gold_plz•

certified financial advisor

That's not really an official thing, but certified financial planner is.

Honestly, the best thing to do is to just invest in a low-fee index fund.

17
binchcoin•

certified financial advisor

They're totally hoping people will get confused with actual CFAs (Chartered Financial Analysts) - which are *very much* a real thing. But much like how 'Female Body Inspectors' can't call themselves FBI agents...

9
toolbelt10•

Im sure your cousin explained the "Rule of 72" to you? Why not ask him what even an extra 1/2% in annual fees will do to your investment. So regardless of how much your cousin personally receives annually, as him how much his company also receives. Ive heard it ranges from 3-5% of your portfolio, plus whatever commissions are charged signing up. And if your cousin only makes $6 annually off your $2400 annual investment, it only serves to show what terrible compensation MLM'ers receive, and would make me wonder why he values his services so little.

12
JeanneDOrcQuality Contributor•

I’d definitely not expect a MLM zombie to provide direct, honest responses to this.

7
toolbelt10•

Of course, but most see right through it so it makes them look even worse ;)

4
JeanneDOrcQuality Contributor•

most see right through it

But threadposter?

​

3
RiotGrrr1•

All MLMs are scams and unethical. There’s a lot of bad things on them if you do a quick google search. I would not invest any money into any company that had that much negative stuff on them even if they weren’t a MLM.

11
esotericshy•

Yes. Primerica is an MLM. Check out the sidebar in r/antiMLM for details.

8
hiphoptomato•

Yes

More specifically, their "financial advisers" are just licensed to sell insurance, namely life insurance and annuities. They try to make these types of financial vehicles fit anyone's needs when they might not. It's not bad to have life insurance, and annuities aren't inherently bad, but you won't find one of their reps who knows an awful lot about actual investing. One thing they do is try to sell life insurance policies, usually whole life policies, and tell people that they can make great retirement accounts. You technically could use a life insurance policy this way, but it makes no sense when there are tons of better options. Also, as others have stated, their fees are near criminal. When I worked in financial services I saw so many of these accounts that stagnated and never accrued any notable interest. Furthermore, a lot of these accounts have really odd, specific rules that make it near impossible to ever take your money out and not surrender a large portion. Feel free to ask me any other questions.

7
JeanneDOrcQuality Contributor•

More specifically, their "financial advisers" are just licensed to sell insurance, namely life insurance and annuities

Exactly. Their training is exclusively on that. Anything beyond he’s out of his element and not qualified for.

6
hiphoptomato•

Yup. I can remember having clients stolen from me because a relative or a friend started working for Primerica and they would take huge losses because they were convinced a whole life policy was the answer to all of their financial concerns. It’s actually supposed to be literally criminal to sell someone a financial product they don’t need, but they’ve developed a way of framing whole life policies as a catch-all. This is all beyond they fact they’re a pyramid scheme because they encourage people they sell to to also begin selling Primerica products and create down lines.

3
toolbelt10•

Actually, their training focuses on recruiting. By that measure, they are more qualified to sell Amway or Herbalife than financial instruments.

3
JungleSumTimes•

look up the difference between "front-loaded" and "no-load" funds. Your scammy cousin only sells the former, leaving you with way less in earnings.

6
_Kaurus•

Primarica is brutal. They pray on your friends and family.

​

So what happens, you share your family contacts with them, they convince your family to invest with them, which is just mutual funs since that's all they can sell since they are not account managers, and then instantly the rep is paid a big commission on the "job well done."

​

The best way to work Primarica is to become a rep with them, "convince" someone to invest 100k, wait for your buddy to get paid, then pull all your 100k out of primearica.

​

You'll make instant profit.

3
JeanneDOrcQuality Contributor•

The best way to work Primarica is to become a rep with them, "convince" someone to invest 100k, wait for your buddy to get paid, then pull all your 100k out of primearica.

​

You'll make instant profit.

Something tells me they've planned on that contingency and it won't work as well as you describe.

1