WORLD FINANCIAL GROUP

'World Financial Group' (WFG) is a financial services marketing organization based in Duluth, Georgia, USA. WFG markets various investment, insurance, and mortgage products through its network of associates in the United States of America, and Canada. WFG is a wholly owned subsidiary of The AEGON Group.^[1]
In the United States of America WFG's insurance and mortgage lines of business are managed directly by WFG, while its investment lines of business are managed by its affiliate broker-dealer 'World Group Securities, Inc.' WFG's American head office is located in Duluth, Georgia.
In Canada, WFG's insurance lines of business are managed by its provincially regulated subsidiary managing general agent 'World Financial Group Insurance Agency of Canada Inc.'; while its investment lines of business are managed by its subsidiary 'WFG Securities of Canada, Inc.', which is a member of the Investment Funds Institute of Canada and the Mutual Fund Dealers Association of Canada.^[2] WFG's Canadian head office is located in Vaughan, Ontario.
In NASCAR, World Financial Group is a major sponsor of Roush Fenway Racing, sponsoring Carl Edwards's ride part-time on the #60 Ford in the Busch Series and the #99 Ford in the NEXTEL Cup Series.^[3]
Recently, World Financial Group has also created and partnered up with 'Investment Advisors International' (IAI), a co-owned Registered Investment Advisory firm to give clients fee-based actively managed accounts by third-party money managers. IAI has agreements with some of the nation's top Investment Advisory firms such as 'Hanlon Investments', 'Foxhall Capital Management', 'Curian Capital', 'CLS Investment Firm, LLC', 'The Institute for Wealth Management', etc. RIAs typically required large sums of available assets (usually six-figures) to open these types of accounts. However, due to WFG's aggressive marketing to the middle-income population, WFG requires an initial deposit of only $30,000 to gain access to their actively managed funds.

Contents

History

Criticism and Praise

Industry Partners

References

External links

History

World Financial Group was formed in 2001 from the select purchase of assets by AEGON from the now defunct World Marketing Alliance (WMA). The former company was founded in 1991 by Hubert Humphrey, who subsequently founded World Leadership Group.

Criticism and Praise

A ''Money Magazine'' report generally critical towards Humphrey and WMA was published in 2000.^[4] Humphrey ceased his involvement with the creation of World Financial Group after the sale of chosen assets to AEGON in 2001. Since that time there has been a decline in penalties and fines imposed by the NASD.
Proponents of WFG and the changes that have occurred point to a recent (August 2006) survey taken by Investment Executive, a newspaper for financial advisors, ranked WFG as the top-rated MGA and the top firm overall.^[5]
WFG highlights they do not have products of their own, but are agents for major institutions. Proponents view this as an important factor in WFG's success as they are able to choose products for clients from an array of sources rather than from a single source, or their own.
Critics and proponents say that WFG's business model is unusual, relative to the established industry.
Criticisms are focused on several issues, often including those commonly raised with other businesses based on multi-level marketing, such as recruiters who exaggerate the likelihood of profiting significantly from participation in the business, over-aggressive members (brokers in WFG's case), and brokers who are not paid what they think they have earned. Before being purchased by Aegon, WMA faced at least $3.5 million dollars in fines and payments, or restitution of losses by investors, imposed by regulators; furthermore, multiple claims were made against WMA by former brokers.^[6]
Proponents claim that a balanced approach including recruitment allows WFG to broaden their operations in an industry whose marketplace is increasingly heterogeneous and insufficiently served by the older institutional models, and say that WFG's growth supports their claim. They suggest the established industry continues to experience transitional sales force issues and flat growth, as the established business models continue to compete over the traditional markets of the industry. In contrast World Financial Group argues their model allows them the ability to compete in traditional markets, and additionally gain better access and penetration into overlooked markets.

Industry Partners

★ Investment Advisors International

★ Transamerica Corporation

★ Western Reserve Life

★ Pacific Life

★ Allianz [1]

★ American Skandia

★ Foxhall Capital Management

References

1. 2005 Annual Report
2. Mutual Funds Dealers Association of Canada
3. World Financial Group (WFG) - WFG Racing
4. Hubert the Great Amy Feldman URL accessed on January 24 2006]
5. August 2006 Investment Executive
6. Brokers Pointing Finger at WMA

External links

★ World Financial Group's Corporate website

★ WFG Newsroom

★ Investment Advisors International's Corporate website