FRAUD and PONZI SCHEME ALERT IN THE FINANCIAL PLANNING INDUSTRY! – PLEASE SHARE NOW!

HAT TIP:  Anonymous Email (from a high level Broker in the Financial Planning Industry)


We wanted to republish this article about WSG merging with Transamerica, not because we want to bore you with this kind of news!

Really, what caught our eye, was the facts listed in the third-to-last paragraph, pointing out that LICENSED FINANCIAL PLANNERS are committing FRAUD and PONZI schemes!!! 

You must ALWAYS be careful with whom you invest with, and hire as your financial planner.  Our best rule-of-thumb advice is interview several people from several companies, and pick a few people to work with, splitting up your investments – just in case one of them is a crook!!!  PLEASE SHARE THIS ARTICLE!  🙂

~ Mr. IQD 


Insurance B/D to Shutter, Transfers Reps to Transamerica

Apr 18, 2012 12:00 PM, By Diana Britton

World Securities Group tops the list of broker migration in the first quarter of 2012, terminating its FINRA filings and merging with Transamerica Financial Advisers.

Insurance broker/dealer World Securities Group (WSG) has merged its operations with Transamerica Financial Advisors, both of which are subsidiaries of Netherlands-based AEGON. According to FINRA flings, John Creek, Ga.-based World Securities Group filed a request to terminate its FINRA registration in mid-February. The merger was approved Jan.6.

According to data compiled by Meridian-IQ, World Securities Group lost 702 advisors in the first three months of 2012, the most losses of any other broker/dealer this year.   Meanwhile, Transamerica gained 708 FAs, the most of any firm this year. But according to Transamerica, the firm brought over 3,390 WGS reps. With Transamerica’s own 1,604 reps as of December 2011, the combined firm has a total of about 4,900 advisors.

Transamerica did not provide much detail about why it decided to merge, except to say that it was part of a strategy to optimize their business and leverage best practices. The firm will maintain a presence in Johns Creek.

In such types of bulk advisor transfers, most FAs will typically move to the new owner, said Ron Edde, senior career advisor with Armstrong Financial Group. In similar situations, advisors usually keep their same desk, office and management.

A few advisors, decided not to make the leap to Transamerica. A team out of Houston, which included Kevin Kusak, Donald Kusak and George Jones, moved to Proequities, according to Meridian-lQ. David Ting, based in Pasadena, Calif., went to Morgan Stanley Smith Barney.

Big transfers of reps are certainly not uncommon, especially in the independent broker/dealer space. In December, Pacific West Securities closed down and made a deal to move its nearly 300 reps to Multi-Financial Securities.

Transamerica president Seth Miller did not return a call and email seeking comment. It’s unknown why the company will shut down and merge with Transamerica.

Edde said the frm may have been overwhelmed by litigation.  In 2008, the Securities and Exchange Commission charged five of the firm’s reps in its Pomona, Calif., branch with fraudulently selling unsuitable securities, primarily variable universal life policies.  In 2010, the SEC took action against WSG for lack of supervision of the Pomona branch, ordering the firm to pay $200,000.  In May 2010, the SEC charged two other WSG reps, based in Lakeland, Fla., accusing them of operating a $14.8 million Ponzi scheme.

The firm may also have been struggling to compete, “because the securities industry is all about scale,” Edde said. The more advisors you have, the lower a broker/dealer firm can charge clients for their services, he added.

Either way, there has been a lot of consolidation going on in the broker/dealer space, so the WSG/Transamerica transaction continues the trend.

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2 thoughts on “FRAUD and PONZI SCHEME ALERT IN THE FINANCIAL PLANNING INDUSTRY! – PLEASE SHARE NOW!

  1. What I need to know is, are the insurance company’s that they have u invest in legit? and do they pay out when the time comes for your withdrawals of the interest quoted. I have an investment in the annuity of Transamerica that I purchased through my banking facility.

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    • Hello Cindy,

      Thanks for your excellent question – I’m going to answer in a way to benefit you and everyone else.

      FIRST, my advice would be to NOT take insurance “advice” from ANY Guru on the internet – including myself. 🙂

      NEXT, what I would encourage you to do, is to talk to several Financial Planners (FINRA Series 65 Licensed) in your local area that you can meet with face-to-face, then decided who you want to work with based on their knowledge and willingness to help you.

      I will tell you that Insurance Companies LOVE to sell an Annuity Product because there is a HUGE commission!!!

      It is not unusual for an Insurance Sales person to make up to 50% commission on the deposit amount of a client’s Annuity – which explains why they have harsh and severe early withdrawal penalties! So, for example if you deposit $100,000.00 in to an Annuity with one of these companies, it is possible that Sales Person made up to $50,000.00 in commission – not too bad for only a few hours work, right?!!!(sarcastic)

      Of course I don’t consider that ethical – however that is currently allowed by US Gov. Securities / Insurance Law.

      This HIGH commission unfortunately attracts sales people who DON’T have YOUR “best interest” at heart, rather they are thinking about their commission (and a new BMW or Mercedes)!!!

      One of the criteria I would recommend you consider is seeking out Fee Based Financial Planners (FINRA Series 65 Licensed).

      These Professionals make their money based on a fee based schedule, and you pay for their advice based on that schedule. If they are ethical they will not ask you to purchase a product from them that they make a commission on; or if they do make a commission, they will fully disclose that amount of their commission, which will be considerably less than a regular Insurance sales person.

      Note, the FINRA Licensing requirements of a Series 65 Financial Planner is one of the HARDEST TESTS THEY HAVE!!! Compare that to an Insurance License which is issued by a State and is a very simple test which is passed regularly by individuals who only take a “crash course” study program for a few hours!

      Thanks again for your question, I hope that has helped you. 🙂

      ~ Mr. IQD

      P.S. If you are not sure of which Financial Planner to start talking to, I would recommend you first check out the highly rated Ric Edelman (http://www.ricedelman.com/) I have no affiliation with him, and do not earn a commission referring his website. 🙂

      Like

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