Is Primerica Evil?

October 31, 2011 2:35 PM

Is Primerica a bad company and would you invest with them?

My wife and I have tried to be smart with money. We try to do our best at balancing the worksheet. Put away for emergencies, pay with cash etc. However, we have made our fair share of mistakes with which we choose to invest through. We got sucked into a Variable Life Insurance (cash value life insurance) plan a few years ago. Now we are recovering from that mistake.

We are now just doing the normal retirement planning strategy that seems everyone else does; 401Ks, IRAs, 10% rule…etc…

So a friend of mine (one of my closest friends) introduced me to another friend of his. This man works at Primerica. My wife and I are naturally suspicious with these kinds of things now.

We are not looking to be part of their employee model but more wondering if we should be running away from their investment model?

I should mention we are not looking at throwing everything we have at them, maybe just use them for insurance and some additional investment options.

I would love to hear stories from others, good and bad. I do appreciate brutal honesty if necessary.

As always, I find myself trusting the opinion of the people on this site more than most others.

Thanks!

posted by birdlips to work & money (16 answers total)

I've invested sing Primerica using their social awareeness mutual fund. No complaints here.
posted by 4ster at 2:38 PM on October 31, 2011

My experience with Primerica was about nineteen years ago, and it was an Amway-style pitch where they first wanted to sell me on term life insurance (which is perfectly fine advice), and then wanted to recruit me to be a Primerica agent. It was the typical downstream thing where the guy who recruited me would get a percentage of my sales, and if I recruited anyone I would get a percentage of their sales. It wasn't technically a pyramid scheme, but it certainly walked and quacked like a pyramidal shaped duck. I elected not to become a Primerica agent.

That being said, the financial advice they offered seemed generally sound and was not a scam (at least as far as I could tell). I was just turned off by the whole Amway approach. One thing in particular that turned me off (aside from the whole structure) was the way they bragged about how long they had been around as a company, but basically had bought a previous company (something like the Great American Can Company?), and used that company's inception date as their historical talking point even though they clearly were not manufacturing cans anymore.

But again, that's nineteen years ago, ancient history. Hopefully other people here will have something more timely for you.
posted by Lokheed at 2:53 PM on October 31, 2011

Primerica is not in itself evil, but some of its franchisees are. Be cautious and do the appropriate research.
posted by Cool Papa Bell at 2:53 PM on October 31, 2011

Yeah, my dad works (or maybe "works", because I don't know how much he actually sells) for Primerica as a sideline, and he had to get properly licensed to sell mutual funds and whatnot - that side of it is a real thing, and you can definitely treat it like any other investment product (ie, do your homework.)

The employee side of it is much, much dodgier, and while I wouldn't call it evil exactly, it's a typical MLM setup and they're kind of deceptive about how much money the average person is likely to earn.
posted by restless_nomad at 3:01 PM on October 31, 2011

I can't speak to the life insurance or investment part directly, but I had two different Primerica agents try to recruit me into their not-quite-a-pyramid-scam at the mall at different times. I was just walking around in street clothes. That was a year ago or so. It's possible their life insurance and investment stuff is great, but I wouldn't risk it when they run other parts of their business in such a sleazy way. Why bother with them when you have other options?
posted by Nattie at 3:14 PM on October 31, 2011

I had a friend of mine who was interested doing this for a while, it's investment advice where agents are recruited via MLM, which seems ridiculous. Why take investment advice from someone who is probably easily scammed?

Just invest in an index fund. Mutual funds are a ripoff since they rarely outperform the market and with the minor cut they take they end up doing slightly worse then the market overall.
posted by delmoi at 3:28 PM on October 31, 2011 [3 favorites]

Why would you deal with a company where you had to ask that question? A company that is scamming people with its "employment" model is not one I'd trust simply to hold a brokerage account or insurance policy when there are so many other options.

MLM is an intrinsically dishonest business model. Don't deal with the intrinsically dishonest people who promulgate the model -- not the schmucks on the bottom of the pyramid, of course, but the ones at the top.
posted by spitbull at 3:49 PM on October 31, 2011 [1 favorite]

A friend of your closest friend, by the way, is not necessarily your friend. MLM does very strange things to friendships by introducing a profit motive into them.
posted by spitbull at 3:50 PM on October 31, 2011 [1 favorite]

I used to work with financial advisors from every company you can think of in a support capacity. It's been a few years, but here's my opinion:

There have been so many mergers in the financial services world in the last 10 years that it's harder to say with certainty which firm's advisors are good and which aren't. Primerica used to be PFS Investments (who's advisers as a rule I always thought were dumber than a bag of rocks - once a PFS advisor asked me what a capital gain was. I shit you not. I wept silently for his clients), but then they bought out Travelers and Smith Barney and the good advisors mixed in with the bad.

So, I will say buyer beware and check the guy out. Get other recommendations, find out how long he's been doing this (you want someone with a lot of experience - years and years). Talk to other advisors and compare their strategies to see what you feel most comfortable with risk-wise.

Steer clear of any advisor who only pitches investments their company manages. That's like walking into a Ford dealership and asking what the best car is for you. They are only going to sell you Fords even if a Prius is your best fit.

Personally, I always got the best vibes from Edward Jones advisors. They are individual folks, but they get really good support and training from their home office.
posted by cecic at 3:55 PM on October 31, 2011

I should mention we are not looking at throwing everything we have at them, maybe just use them for insurance and some additional investment options.

What exactly would you get from Primerica that you can't get from a unambiguously non-scammy company? Are you doing this because you are getting a hard sell from someone, or because you would actually seek out Primerica to actually pay for their services without the sales pitch? Just like with the Variable Life Insurance thing, if someone makes money selling you something, you can't really trust them to give you objective advice about it.
posted by burnmp3s at 4:06 PM on October 31, 2011

Go with a company that actually employees intelligent college educated people. That company will take anyone and everyone.
posted by Bun Surnt at 4:29 PM on October 31, 2011

Just to chime in, Primerica tried to rope me into a "mob interview" one fourth of July weekend after grabbing my resume from a career fair at my college. They were really vague with me, evasive even, about the position but eventually confirmed it wasn't going to be anything close to what I was looking to do for work after I did some Googling and confronted the guy who approached me with what I'd found.

When I asked him why he couldn't have been up front with me about the nature of the position, or why he thought an aspiring computer programmer would be interested in selling insurance, he told me that sometimes it isn't enough to read a review of a movie, that you really need to see it to understand what it's about.

I'll let his view on honesty and disclosure speak for itself. But there's no way I'd do business with this company under any circumstances.
posted by alphanerd at 5:07 PM on October 31, 2011

I worked in Primerica for a while a few years back. Get the free analysis, it'll give you a good debt payoff plan, weighting your debts to show which to pay off first (then roll that into the next, etc.) It has some other good info too. Be aware that while a Primerica rep must be federally licensed to sell securities, that doesn't mean they're necessarily proficient at tailoring an investment package for you. And due to the nature of their employment-side business model, that person may not be around long - your insurance and investments will pass to their upline should they quit. So a standard caveat emptor on putting any money with them, but get the free stuff if you are reasonably immune to the follow-up recruitment efforts. They may ask for contact info of friends and family; refuse if you like, most reps will still run the analysis for you.
posted by attercoppe at 5:09 PM on October 31, 2011 [1 favorite]

Forgot to mention that Joe Rep won't be managing your mutual fund, that's done by the experts. He will recommend some for you though, and may or may not know much about any of the options.
posted by attercoppe at 5:11 PM on October 31, 2011

The Boglehead approach makes sense to me - index funds with low fees give you a real advantage in helping your investments grow.

A few quick searches at the Bogleheads forum shows the folks there aren't terribly impressed with Primerica:

Jan 2011: "I'd run away ASAP. ... Just search Google for Primerica and you will find plenty of sites talking about the questionable practices of this company. "

May 2007: "Funds with loads are what you sell to people you hate. Friends don't let friends buy load funds. ... I doubt any broker would actually invest in the trash they push on clients."

Feb 2011: "My mom started a Roth IRA for me with $2000 when I was 18 and I wasn't able to add anything to it until I finished with college 6 years later. She had the money with Primerica and it was nickel and diming my Roth to death."

Evil or not, you probably have MUCH better investment options available to you.
posted by kristi at 11:11 PM on October 31, 2011

There is a lot of great info here. We were skeptical of this and just wanted to see if we were just being overly cautious. My wife and I talked after this post (and spending hours over the past couple days googling and reading what we could) and we are not going to work with this company.

I appreciate everyone taking the time to give us their opinion. Our search for a good honest financial adviser continues....
posted by birdlips at 8:47 AM on November 1, 2011