World Financial Group
World Financial Group (WFG) is a financial services marketing organization based in Johns Creek, Georgia that markets investment, insurance, and various other financial products through a network of associates in the United States and Canada. It is a wholly owned subsidiary of AEGON.[1] Although WFG is publically referred to as a Network Marketing company (also known as Multi-level Marketing (MLM)), the company has released several illustrations describing it as a unique hybrid business model utilising the best aspects of network or "referral marketing," franchising, and corporate business models.[2][3][4]
History
World Marketing Alliance (WMA) introduced the Business Format System (BFS) in 1992, a blueprint to help its associates build and run their business.[5] MD TV, the company's private satellite television network, was also introduced. During this period, the company expanded its operations to Canada, Taiwan, Mexico, Puerto Rico, Guam and the Philippines.[5] The company held its first convention in Las Vegas in 1992. It was attended by about 2,000 associates.[5]
On March 23, 1998, WMA Executive World Headquarters opened in Duluth, Georgia. The 100,000-square-foot (9,300 m2) building housed 500+ employees.[5]
In November 1998, WMA was fined $100,000 "for not properly supervising its sales agents" after their clients lost nearly $2 million in unregistered investments.[6] In 2000, WMA was fined $125,000 "for failing to report nearly 900 customer complaints".[7]
In June 2001, select assets of WMA were purchased by AEGON and renamed World Financial Group, Inc..[8][9] Alexander Wynaendts, chief executive of AEGON, was quoted as saying, "When we took the company over, we put in place very strict regulatory and compliance procedures".[10]
In 2011, a number of World Financial Group offices began to work under the alias Managed Wealth Financial.[11]
Industry partners
In the United States, a sampling of WFG's numerous provider companies would include hundreds of investment companies (including mutual funds and unit investment trusts, offered through its affiliate broker-dealer World Group Securities) and various insurance and financial services-related companies, including Allianz, Debtmerica, Hartford Life, ING Group, Jackson National, John Hancock, Life Lock, Lincoln Benefit Life, Lincoln National, MetLife, Nationwide, National Long-Term Care Brokers, Old Mutual Financial Network, Pacific Life, Principal Financial Group, Prudential, Shaw American, Transamerica, and Western Reserve Life.[12]
In Canada, some of WFG's provider companies include Transamerica Life of Canada, Equitable Life of Canada, TD Mutual Funds, IA Clarington Investments, Fidelity Investments, AEGON Fund Management, AGF Management Limited, RBC, and Franklin Templeton Investments.[13]
Announced in March 2008, World Financial Group has teamed with Laserfiche, an electronic document management company, to launch a paperless records management and Straight Through Processing (STP) platform called "Navigator" for the registered representatives of its affiliate, World Group Securities, Inc.[14]
Activity
In the United States, World Financial Group's insurance lines of business are generally managed by World Financial Group Insurance Agency, Inc., while its investment lines of business are managed by its affiliate broker-dealer World Group Securities, Inc. The newest division, Investment Advisors International, now offers active money management.
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 and mortgage 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.[15] WFG's Canadian head office is located in Vaughan, Ontario.
Ratings
The Toronto-based WFG was named Canada's best managing general agent and top firm overall in 2006 and 2007 with an IE rating of 9.3, surveys conducted by Investment Executive, a newspaper for Canadian financial advisors.[16][17]
Toronto-based World Financial Group Inc. scored top spot again in 2008 for Canada's best MGA, alongside Mississauga-based IDC Financial Inc.[18][19]
Sponsorships and charities
World Financial Group provides financial support for the following athletes, teams and events:
- In NASCAR, Matt Kenseth[20] in the #16 Ford in the Great Clips 300 Series. Previously, WFG had sponsored Roush Racing with Carl Edwards' #60 in the Busch Series, #99 Ford in the NEXTEL Cup Series, and the #50 Ford in the Craftsman Truck Series.[21]
- In 2007, WFG signed a two-year sponsorship agreement with Fox Sports Network and the Pacific-10 Conference (Pac-10).[22]
- On October 3, 2007, WFG agreed to a three-year sponsorship of USA Luge.[23]
- In 2008, World Financial Group sponsored Canadian professional golfer Brad Fritsch.[24][25]
- In November 2008, World Financial Group announced its sponsorship of the Nanaimo Clippers for the 2008-2009 season. Now known as the World Financial Group Nanaimo Clippers, a Tier II Junior "A" ice hockey team from Nanaimo, British Columbia, Canada.[26]
A summary of sports sponsorships can be found at WFG Sports.[27]
Also, World Financial Group has a charitable organization, called the WFG Foundation,[28] that focuses on increase the quality of life in impoverished areas, both domestically and abroad. Some recent charitable activities of WFG include:
- The Trailhead Discovery Museum[29]
- Second Harvest Food Bank of Central Florida and Coalition for the Homeless of Central Florida[30]
- WFG Canada sposored 2 mountain climbing events in 2010 and 2011 in support of the Salvation Army. http://www.summitsofchange.ca
Regulatory issues and lawsuits
WFG's stated mission goal is to "serve the financial needs of individuals and families typically overlooked by the financial services industry".[31] It is yet unclear how successfully the company has managed to distance itself from its more controversial US based predecessor WMA, associated with fraud, misrepresentation and false statements, and the subject of class action lawsuits, and National Association of Securities Dealers (NASD) disciplinary action.[32][33] In preparation for Aegon's acquisition in 2001, "World Marketing Alliance 'ramped up' compliance before the acquisition".[34] As reported in the same Bloomberg article, Aegon's Chief Executive Officer Alexander Wynaendts said on Bloomberg TV that "When we took the company over, we put in place very strict regulatory and compliance procedures, Of course, when you have such large numbers of people out there in the field, it is quite an effort. We feel comfortable that we now have the regulatory issues under control."[34]
Some state securities officials, including those in Iowa, Alabama, Missouri, Utah, and Minnesota, have filed lawsuits to bar inappropriate sales practices by World Financial Group (WFG) and World Group Securities (WGS).[35][36]
- A 2004 NASD disciplinary action report summarized disciplinary actions against WGS. According to the report, WGS "submitted a Letter of Acceptance, Waiver, and Consent in which the firm was censured and fined $15,000. Without admitting or denying the allegations, the firm consented to the described sanctions and to the entry of findings that the firm permitted representatives to act in registered capacities while their registrations were inactive due to their failure to satisfy the Regulatory Element of NASD's Continuing Education Requirements. NASD also found that the firm failed to establish and maintain a supervisory system reasonably designed to assure compliance with the Regulatory Element of the Continuing Education Requirement by its registered representatives."[38]
- In December 2006, WGS and one of its brokers were fined $150,000 by Missouri's commissioner of securities for selling unsuitable products to elderly people.[10][39][40][41] Other cases of private arbitration "where variable annuities were allegedly sold to people too old to realize any benefit before they died" were also reported. Utah’s Division of Securities has cited at least four World Group Securities brokers since 2006.[34][42]
- In April 2007, WGS was fined $50,000 for failing to supervise its representatives in the State of Utah, who were misrepresenting their credentials and services rendered during free lunch seminars targeting seniors.[35][39][43][44][45]
- In June 2007, a couple filed an NASD arbitration claim against WGS, alleging misrepresentation that caused them to lose over $500,000 on investment products that were unsuitable for their risk tolerance. A judge sided with the couple and forced the company into arbitration over the proceedings, and a settlement was reached.[34][42]
- In April 2010, WGS was fined in excess of $850,000 as the result of the unauthorized sale of private securities by some of its agents in the State of Arizona.[46][47]
- In May 2010, the U.S. Securities and Exchange Commission (SEC) filed a federal case against two former brokers of WGS, accusing them of having raised approximately $14,800,000 through the offer and sale of promissory notes as part of an illegal Ponzi scheme in the States of Ohio and Florida starting while the two were employed by WGS and using their customer contacts there.[48]
- In November 2010, the SEC ordered WGS to pay, among other things, a civil monetary penalty in the amount of $200,000 for the fraudulent selling of unsuitable securities in the State of California, which were funded using home equity, derived from the refinance of the customers' homes into subprime mortgages.[49][50][51][52]
References
- ^ "2005 Annual Report". AEGON Review of Operations: Americas. http://www2.aegon.com/annual_report/2005/eng/aegonamericasaa.shtml. Retrieved February 2, 2007.
- ^ Aegon in Missouri Provokes Regulators Finding Sales Deceptions Bloomberg : May 28, 2008
- ^ Form 20-F
- ^ http://www.investmentfraudlawyerblog.com/2008/06/have_things_changed_at_world_f.html
- ^ a b c d http://www.huberthumphrey.com/flash/timeline.swf
- ^ http://www.cc.state.az.us/divisions/securities/news_releases/1998/nov25-98.pdf
- ^ http://www.investmentnews.com/apps/pbcs.dll/article?AID=/20010305/SUB/103050717/-1/INIssueAlert04
- ^ World Financial Group: www.worldfinancialgroup.com Info at the Work From Home Directory
- ^ World Marketing Alliance
- ^ a b Dutch insurer's U.S. unit draws scrutiny from regulators - The New York Times
- ^ Managed Wealth Financial - Affiliates
- ^ World Financial Group Inc (WFG), World Financial Group Company - Worldfinancialgroup.com - Industry Partners
- ^ World Financial Group Inc (WFG), World Financial Group Company - Worldfinancialgroup.com - Industry Partners - Canada
- ^ "World Financial Group, Inc. Launches "Navigator System".". Business Wire. March 5, 2008. http://www.accessmylibrary.com/coms2/summary_0286-34102042_ITM.
- ^ Mutual Funds Dealers Association of Canada
- ^ "August 2006 Investment Executive". http://www.investmentexecutive.com/client/en/News/DetailNews.asp?IdPub=134&Id=35020&cat=29&IdSection=29&PageMem=&nbNews=.
- ^ "August 2007 Investment Executive". http://www.investmentexecutive.com/client/en/News/DetailNews.asp?IdPub=150&Id=40344&cat=29&IdSection=29&PageMem=&nbNews=.
- ^ "MGAs Deliver Big Time In Their Ongoing Training". http://www.investmentexecutive.com/client/en/News/DetailNews.asp?IdPub=166&Id=45500&cat=29&IdSection=29&PageMem=&nbNews=.
- ^ "MGAs Earn Accolades From Their Advisors". http://www.investmentexecutive.com/client/en/News/DetailNews.asp?IdPub=166&Id=45495&cat=29&IdSection=29&PageMem=&nbNews=.
- ^ "WFG Racing Homepage". http://www.wfgracing.com/.
- ^ "Roush Fenway Racing Corporate Sponsors". http://www.roushracing.com/sponsors.
- ^ "Pac-10 Corporate Partners". http://www.pac-10.org/sponsorships/pac10-sponsorships.html#a.
- ^ "USA Luge Corporate Sponsors". http://www.usaluge.org/sponsors.php.
- ^ "Fritsch Takes Timeout for Open". http://www2.canada.com/ottawacitizen/columnists/story.html?id=f1f6e8e5-711a-470f-9d72-0c3d9f699f01.
- ^ "World Financial Group Sponsorships". http://www.wfg-online.com/wfgSponsorships/.
- ^ "World Financial Group Named Title Sponsor for Nanaimo Clippers Junior Hockey Club". http://www.ibtimes.com/prnews/20081118/world-financial-group.htm.
- ^ "World Financial Group (WFG) Sports Sponsorships". http://www.wfgsports.com/.
- ^ "The WFG Foundation homepage". http://www.wfg-online.com/NonSSL/Home/NonChannel/wfg-foundation/foundation_default.asp.
- ^ "WFG Gives Back: The Trailhead Discovery Museum". http://trailheadkids.org/wfg-gives-back-to-the-trailhead-children%E2%80%99s-discovery-museum/.
- ^ "Second Harvest Food Bank of Central Florida and Coalition for the Homeless of Central Florida". http://www.expertmagazine.com/artman/publish/article_948.shtml.
- ^ "World Financial Group.". http://www.wfg-online.ca/whatMakesUsDiff/.
- ^ "Business Wire press release.". Business Wire. October 22, 2001. http://findarticles.com/p/articles/mi_m0EIN/is_2001_Oct_22/ai_79357030.
- ^ "NASD press release.". http://www.finra.org/PressRoom/NewsReleases/2000NewsReleases/P011410.
- ^ a b c d "Bloomberg Article". http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a8N_74GdteOg.
- ^ a b http://www.securities.utah.gov/dockets/06007801.pdf
- ^ Missouri Securities :: Mark Andrew McEwen, CRD# 4613500 : Case AP-09-28
- ^ "FINRA Broker Check: World Group Securities". http://brokercheck.finra.org/Support/ReportViewer.aspx?SearchGroup=Firm&FirmKey=114473&BrokerKey=-1&IndvlBCCtgry=-1&IndvlIACtgry=-1.
- ^ http://www.finra.org/web/groups/industry/@ip/@enf/@da/documents/disciplinaryactions/p012791.pdf
- ^ a b Aegon in Missouri Provokes Regulators Finding Sales Deceptions - Bloomberg
- ^ SOS, Missouri - Securities: News Releases
- ^ Missouri Securities :: World Group Securities, Inc. : Case AP-06-48
- ^ a b State Regulators Investigate World Financial for Deceptive Sales Practices :: Stock Broker Fraud Blog
- ^ http://www.securities.state.ut.us/press/worldgroup.pdf
- ^ Division of Securities
- ^ http://www.securities.utah.gov/dockets/06007802.pdf
- ^ http://images.edocket.azcc.gov/docketpdf/0000110449.pdf
- ^ http://www.sec.gov/litigation/admin/2009/33-9035.pdf
- ^ Another Promissory Note Ponzi? | Investor's Watchblog
- ^ Kederio Ainsworth, Guillermo Haro, Jesus Gutierrez, Gabriel Paredes, and Angel Romo: Lit. Rel. No. 20768 / October 3, 2008
- ^ Complaint
- ^ SEC News Digest (Issue 2010-220; November 22, 2010)
- ^ http://www.sec.gov/litigation/admin/2010/34-63354.pdf
External links