World Financial Group
Encyclopedia
World Financial Group 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
. 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.
On March 23, 1998, WMA Executive World Headquarters opened in Duluth, Georgia. The 100000 square feet (9,290.3 m²) building housed 500+ employees.
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. In 2000, WMA was fined $125,000 "for failing to report nearly 900 customer complaints".
In June 2001, select assets of WMA were purchased by AEGON and renamed World Financial Group, Inc.. 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".
In 2011, a number of World Financial Group offices began to work under the alias Managed Wealth Financial.
) 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.
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
.
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.
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. WFG's Canadian head office is located in Vaughan, Ontario.
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.
Toronto-based World Financial Group Inc. scored top spot again in 2008 for Canada's best MGA, alongside Mississauga-based IDC Financial Inc.
A summary of sports sponsorships can be found at WFG Sports.
Also, World Financial Group has a charitable organization, called the WFG Foundation, that focuses on increase the quality of life in impoverished areas, both domestically and abroad. Some recent charitable activities of WFG include:
, associated with fraud, misrepresentation and false statements, and the subject of class action lawsuits, and National Association of Securities Dealers (NASD) disciplinary action. In preparation for Aegon's acquisition in 2001, "World Marketing Alliance 'ramped up' compliance before the acquisition". 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."
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).
Johns Creek, Georgia
Johns Creek is a suburban city in Fulton County, Georgia, USA, which incorporated December 1, 2006. It is named for a tributary that runs through the area. The city was created out of the northeastern part of unincorporated Fulton County...
that markets investment, insurance, and various other financial products through a network of associates in the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
and Canada
Canada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...
. It is a wholly owned subsidiary of AEGON
AEGON
Aegon N.V. is one of the world’s largest life insurance and pension groups, and a strong provider of investment products. Aegon's head office is in The Hague, Netherlands...
. Although WFG is publically referred to as a Network Marketing company (also known as Multi-level Marketing
Multi-level marketing
Multi-level marketing is a marketing strategy in which the sales force is compensated not only for sales they personally generate, but also for the sales of others they recruit, creating a downline of distributors and a hierarchy of multiple levels of compensation...
(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.
History
World Marketing Alliance (WMA) introduced the Business Format System (BFS) in 1992, a blueprint to help its associates build and run their business. 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. The company held its first convention in Las Vegas in 1992. It was attended by about 2,000 associates.On March 23, 1998, WMA Executive World Headquarters opened in Duluth, Georgia. The 100000 square feet (9,290.3 m²) building housed 500+ employees.
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. In 2000, WMA was fined $125,000 "for failing to report nearly 900 customer complaints".
In June 2001, select assets of WMA were purchased by AEGON and renamed World Financial Group, Inc.. 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".
In 2011, a number of World Financial Group offices began to work under the alias Managed Wealth Financial.
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 SecuritiesWorld Group Securities
World Group Securities, Inc. is the exclusive broker-dealer affiliate of World Financial Group and is a member of the AEGON Group.- Registration :...
) and various insurance and financial services-related companies, including Allianz
Allianz
SE is a global financial services company headquartered in Munich, Germany. Its core business and focus is insurance. As of 2010, it was the world's 12th-largest financial services group and 23rd-largest company according to a composite measure by Forbes magazine.Its Allianz Global Investors...
, Debtmerica, Hartford Life, ING Group
ING Group
The ING Group is a global financial institution offering retail banking, direct banking, commercial banking, investment banking, asset management, and insurance services. ING is the Dutch member of the Inter-Alpha Group of Banks, a cooperative consortium of 11 prominent European banks...
, Jackson National, John Hancock, Life Lock, Lincoln Benefit Life, Lincoln National, MetLife, Nationwide
Nationwide Mutual Insurance Company
Nationwide Mutual Insurance Company & Affiliated Companies is a group of large U.S. insurance and financial services companies based in Columbus...
, National Long-Term Care Brokers, Old Mutual Financial Network, Pacific Life
Pacific Life
Pacific Life Insurance Company is an insurance company providing life insurance products, annuities, and mutual funds, and offers to individuals, businesses, and pension plans a variety of investment products and services. Pacific Life also counts more than half of the 100 largest U.S...
, Principal Financial Group, Prudential, Shaw American, Transamerica
Transamerica
Transamerica or Transamerican may refer to:*Transamerica Corporation**The Transamerica Pyramid in San Francisco*TransAmerica , a railroad boardgame*Transamerica , a 2005 film**Transamerica...
, and Western Reserve Life.
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
AGF Management Limited
AGF Management Limited, American Growth Fund, is a Canadian investment management company with offices across Canada and subsidiaries around the world. Founded in 1957, AGF serves more than one million investors...
, RBC, and Franklin Templeton Investments
Franklin Templeton Investments
Franklin Resources Inc. is a holding company which, together with its subsidiaries, is referred to as Franklin Templeton Investments; it is an investment firm originally founded in New York in 1947 as Franklin Distributors, Inc. It is listed on the NYSE under the ticker BEN, in honor of Benjamin...
.
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.
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-dealerBroker-dealer
A broker-dealer is a term used in United States financial services regulations. It is a natural person, a company or other organization that trades securities for its own account or on behalf of its customers....
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. WFG's Canadian head office is located in Vaughan, Ontario.
Ratings
The Toronto-based WFG was named Canada's best managing general agentManaging general agent
In insurance, a managing general agent is defined legally as "an individual or business entity appointed by an insurer to solicit applications from agents for insurance contracts or to negotiate insurance contracts on behalf of an insurer and, if authorized to do so by an insurer, to effectuate and...
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.
Toronto-based World Financial Group Inc. scored top spot again in 2008 for Canada's best MGA, alongside Mississauga-based IDC Financial Inc.
Sponsorships and charities
World Financial Group provides financial support for the following athletes, teams and events:- In NASCARNASCARThe National Association for Stock Car Auto Racing is a family-owned and -operated business venture that sanctions and governs multiple auto racing sports events. It was founded by Bill France Sr. in 1947–48. As of 2009, the CEO for the company is Brian France, grandson of the late Bill France Sr...
, Matt KensethMatt KensethMatthew Roy "Matt" Kenseth is an American stock car driver. Kenseth currently drives the No. 17 Crown Royal Ford Fusion in the NASCAR Sprint Cup Series for Roush Fenway Racing...
in the #16 Ford in the Great Clips 300 Series. Previously, WFG had sponsored Roush Racing with Carl Edwards' #60 in the Busch SeriesBusch SeriesThe NASCAR Nationwide Series is a stock car racing series owned and operated by the National Association of Stock Car Auto Racing. It is promoted as NASCAR's "minor league" circuit, and is a proving ground for drivers who wish to step up to the organization's "big leagues"; the Sprint Cup circuit...
, #99 Ford in the NEXTEL CupNEXTEL CupThe NASCAR Sprint Cup Series is the top racing series of the National Association for Stock Car Auto Racing . The series was originally known as the Strictly Stock Series and Grand National Series . While leasing its naming rights to R. J...
Series, and the #50 Ford in the Craftsman Truck SeriesCraftsman Truck SeriesThe NASCAR Camping World Truck Series is a pickup truck racing series owned and operated by the National Association for Stock Car Auto Racing...
. - In 2007, WFG signed a two-year sponsorship agreement with Fox Sports Network and the Pacific-10 Conference (Pac-10).
- On October 3, 2007, WFG agreed to a three-year sponsorship of USA Luge.
- In 2008, World Financial Group sponsored Canadian professional golfer Brad Fritsch.
- In November 2008, World Financial Group announced its sponsorship of the Nanaimo ClippersNanaimo ClippersThe Nanaimo Clippers are a Junior "A" Ice Hockey team based in Nanaimo, British Columbia, Canada. They are members of the Coastal Conference of the British Columbia Hockey League...
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.
A summary of sports sponsorships can be found at WFG Sports.
Also, World Financial Group has a charitable organization, called the WFG Foundation, 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
- Second Harvest Food Bank of Central Florida and Coalition for the Homeless of Central Florida
- 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". It is yet unclear how successfully the company has managed to distance itself from its more controversial US based predecessor WMAWMA
WMA may refer to:- Organizations :*Western Manufactured Housing Communities Association, a nonprofit trade association for owners of manufactured home communities in California*Western Marble Arch, a synagogue in central London...
, associated with fraud, misrepresentation and false statements, and the subject of class action lawsuits, and National Association of Securities Dealers (NASD) disciplinary action. In preparation for Aegon's acquisition in 2001, "World Marketing Alliance 'ramped up' compliance before the acquisition". 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."
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
World Group Securities
World Group Securities, Inc. is the exclusive broker-dealer affiliate of World Financial Group and is a member of the AEGON Group.- Registration :...
(WGS).
- In March 2011, the Financial Industry Regulatory AuthorityFinancial Industry Regulatory AuthorityIn the United States, the Financial Industry Regulatory Authority, Inc., or FINRA, is a private corporation that acts as a self-regulatory organization . FINRA is the successor to the National Association of Securities Dealers, Inc. ...
(FINRA) reported that World Group Securities had incurred ten regulatory penalties since 2004.
- 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."
- 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. 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 SecuritiesWorld Group SecuritiesWorld Group Securities, Inc. is the exclusive broker-dealer affiliate of World Financial Group and is a member of the AEGON Group.- Registration :...
brokers since 2006.
- 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.
- 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.
- 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.
- 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 schemePonzi schemeA Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from any actual profit earned by the individual or organization running the operation...
in the States of Ohio and Florida starting while the two were employed by WGS and using their customer contacts there.
- 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.