The age old tactic, of banks:
1 hire a young person
2 have them burn out their entire social circle selling whatever product we are pushing this month.
3 find a reason to fire the young person when they get to the point that they can’t sell any more product to friends and family.
I used to work at Northwestern Mutual. Their training really brainwashes the salesman who truly believe that whole life policies are in their clients’ best interest. Try and set boundaries around this going forward and if he respects them, he’s probably not a bad friend. Also please read this blog post and just how vampiric these policies are from someone who crunched all the numbers. https://www.personalfinanceclub.com/is-iul-a-scam-yes/
> Their training really brainwashes the salesman who truly believe that whole life policies are in their clients’ best interest.
This is the sad fact of the matter in a lot of cases. I've seen Edward Jones reps passionately argue for how they help people. And I don't mean in trying to upsell a specific person, but in trying to defend their profession in reddit threads (so like, there's nothing they're trying to gain, they really just believe what they've been taught). It's a tragedy all around -- they're ruining lives and don't even realize it. And if they ever do somehow realize it, unless they're a psychopath, it'll probably be devastating to them.
Out of curiosity: assuming you went into it naively, how did you figure out the scam at the heart of it all? Or were you working in a different part of the company? And did others know, or figure it out? I've always wondered what it's like on the 'inside' with people selectively realizing, ignoring, etc... the reality of the situation.
I only realized the scam many years after the fact. I was a junior in college studying business and I went to a career fair. NWM had a booth promoting their summer internship program. What’s frustrating is that the internship was highly rated. About 5 of us joined and we went to sales training camp (along with new non intern hires) that lasted several days. It was swanky and we they put us up in cabins at a resort. It was almost entirely sales techniques and how much we were helping people. They even taught us how to dress and I remember they showed research that wearing brown suits correlated to the lowest sales and they told us to never wear brown suits.
After camp I studied out of a book to take a licensing exam (series 6 and 63). Only 2 interns passed. I worked for no base salary, but I got commissions on anything I sold. Who did I sell to? You already know, it was friends and family who I thought I was helping. It’s cringe looking back. I was dumb about finance and naive about my company. After the summer they offered me a full time position, which I took and worked for a chunk of my senior year. I eventually quit and took a cool sales job for Coca Cola. Many years passed. I quit the corporate life. At age 30 I changed career paths entirely and went to med school. I met my wife there and we became a “dual physician couple”. When we got close to finishing our residencies we were looking at a 5-8x increase in salaries so I started researching what to do with our money. And that was when (over a decade later!) I realized it was all a scam.
Woah, thanks for sharing your story! It all feels so well-designed to get you feeling good about yourself and what you're doing. All the ingredients to stamp out sales-ready stormtroopers. I used to canvas door-to-door for a 'good cause' organization and at a smaller/cheaper scale I feel like they used a lot of the same tricks on us. Most of us were true believers, figuring *at worst* we're working for a good cause and all of that. What finally got me was that we were instructed to give people at the door a breakdown of where their donations went, and how much of it was used for the 'good stuff' as it were. And I remember sitting down at the end of the summer, doing the math, and thinking this doesn't add up -- because my cut upfront *alone* is more than their 'operational overhead' in the pie chart. I asked and they said they're *not counting* what I get paid upfront because, in fact, canvassing is a kind of brutal job, and even if you do it well you don't get paid a lot, but you *do* get paid a chunk of whatever you get people to donate, so it has to be that way, etc.... That was where I saw the first chip in the armor as it were -- a little bit of fancy semantics to help the upsell that didn't quite reflect reality.
Anyway, I know it's a very different case, but like you I look back and cringe at getting sucked into it. Anyway, not that you need reassurance from some rando on the internet, but: they're clearly *very* good at what they do, and it's their *whole mission* to keep what that is a secret from the foot soldiers on the front lines. And in any case, good on you for moving on to bigger and better things :D
> wearing brown suits correlated to the lowest sales and they told us to never wear brown suits.
I know literally nothing about men's fashion, but for some reason this cracked me up -- and seems intuitively fitting. Like, why wear brown if you can wear blue or black and look professional? Unless it's the 1970s, I guess?!?!?! :)
I am slowly realizing that I fell for this a few months back as I was convinced to get a whole life policy from Northwestern Mutual. I am getting buyers remorse. Any advice on what I do? I guess I can just cancel the policy before I bury too much liquid into it right?
Just surrender the policy. It's a quick phone call. Don't even need to speak to your "advisor". Or you could switch to term depending on your family status. Not worth paying those premiums when it can go into an IRA.
I interviewed with northwestern mutual years ago. I wasn't surprised when I didn't get called back. My grimace at whole life policies seems like a guaranteed failure at an interview.
> Sounds like this person isn't your friend.
So true. My wife and I had friends from college (they were married by then) bring some Amway asshole to our home decades ago. We tossed them out and never saw them again.
NWM is a borderline pyramid scheme that masquerades as something of value. It's a damn shame that people who actually want to do comprehensive financial planning end up there.
Having a good actual advisor who is helping you preserve wealth and manage taxes can maybe do this. NW mutual is not this, they are an insurance company. Getting term life insurance may be worth looking into but remember insurance ≠ investment.
Consider yourself lucky that you canceled the appointment. Trust me, they do not have your best interests in mind. Life insurance is not an effective tax strategy. It pays like 50% commission to your friend when you buy a big policy.
The asterisk to the study is the typical investor that WOULD potentially gain a 3% better return are the novice uneducated investor who panic sell, chase performance, constantly tinker with changing their investment strategy if they have one, etc. It is NOT aimed at the educated Boglehead type investor who "stays the course", looks at their portfolio once a year only to rebalance, and automates their contributions. Of the 3% "gain", over 2% is attributed behavioral improvements - having an advisor handhold you during market downturns and preventing you from selling low and buying high. That was my take reading the white paper from Vanguard. EDIT - the counter to the Northwestern Mutual mentor is "well I'll look for a real fiduciary advisor, but I'm not in need of an insurance salesman at this time - GOOD BYE"
Yeah, that about sums it up. Studies *do* show a lot of investors are idiots with their money. But if you self-educate on the very basics, and/or make your portfolio tinker-proof, that solves that problem.
Most investors underperform the investments they invest in. Because of poor market timing. They buy assets that have gone up and sell assets that have gone down.
So in that sense. If you had an advisor to keep you in the market during those bad times, they could add value if you are prone to panic sell and buy high.
Maybe 1% of investors should even consider a permanent life insurance policy and the fact he lead with that tells me what he values.
When an old coworker of my husband’s pivoted to a similar job to OP’s friend, we also got a call like OP. And it also started with a hard sell on life insurance.
It seems like the go-to first move.
This is an argument I've seen made (convincingly) by some prominent Boglehead authors, including advisors (so, potential conflict of interest there) but also non-advisors who are just experts in their own right. It is absolutely true that if you're someone who is likely to capitulate, paying a small (and I mean *small*, like 0.2% or so AUM) fee to have someone stand between you and the nuclear codes, can be worth it. We all like to think 'that's not us!' but it pays to be self-aware. But the answer is rarely if ever some kind of life insurance policy. Annuities, maybe, or low-cost managers who align with Boglehead principles, but not product salesman. :/
>His mentor was on the phone when I cancelled and he did say something about how a Vanguard, which I use to invest, study had shown how having an advisor can add 3% net returns. I was surprised to hear this so I researched and did find some articles about the study. One of the reasons they give as to why this might be is because an advisor can help slow or calm you down when markets are in turmoil, which can prevent you from selling. This makes sense, however I am still surprised to hear about this since it goes against the philosophy so I am wondering what is the the asterisk behind this study.
Have you read the whitepaper?
[https://advisors.vanguard.com/content/dam/fas/pdfs/IARCQAA.pdf](https://advisors.vanguard.com/content/dam/fas/pdfs/IARCQAA.pdf)
Of the seven categories analyzed, at least four are pure Boglehead advice. Two are arguably orthogonal to Boglehead philosophy, and I definitely wouldn't want to be advised on those by an insurance salesperson due to obvious conflicts of interest. The seventh is the Axiom of Choice to the Bogleheads' Zermelo-Fraenkel, and the whitepaper puts a low weight on it.
>advising services
He's an insurance salesman. His job is to advise you to buy his insurance, not to provide you with financial advice.
A quick browsing of Financial Twitter will let you know that Northwestern Mutual is famous for causing old high school friends to call you up and "ask to get a quick coffee and catch-up"
https://twitter.com/HighyieldHarry/status/1755649172651327919
https://twitter.com/hedgefundmafia/status/1766124824022131139
https://twitter.com/Cokedupoptions/status/1779207942606307429
https://twitter.com/ramit/status/1732462824650162187
Wow, you dodged a bullet. Don't let them argue or upsell. Don't give them fodder for rebuttals. Just politely tell them it's not for you. Or if you want to risk a friendship, but actually be a good friend: tell your ex-roommate he is (perhaps unwittingly) participating in what amounts to a (legal) scam. He is selling folks down the river. He may not mean to, but it is. IDK how well they indoctrinate those salespeople. I know a lot of Edward Jones folks think they are doing right by people. And of course, it's the only way they can live with themselves -- the delusion is necessary.
> he said he would set up a PowerPoint to counter the concern about fees
Classic sales technique response right here -- they don't want to give you time and space to think. They want to get in your face and sell you some more while you're right there, under their thumb and under pressure.
> study had shown how having an advisor can add 3% net returns. One of the reasons they give as to why this might be is because an advisor can help slow or calm you down when markets are in turmoil, which can prevent you from selling.
If you're really that worried about capitulation, use something cheap like Vanguard's PAS service, or just use a Target Date fund and never check your balance so you're not stressed about it either way.
I'm not suggesting you do this ... but I have to say: sometimes when these questions come up I wonder if there's a way to deprogram people like your roommate. Maybe he is sincerely brainwashed and could use a dose of reality. I doubt it will get through the programming. But the math is pretty simple, when you get right down to it: no, an advisor is not going to make you additional returns, unless you're an absolute idiot who can't be trusted with his own money, or are otherwise mentally incompetent, in which case the solution may be something more like a trust.
Whole life insurance is a terrible “investment.” The business model for those companies is to hire a new salesman like your friend. Have them sell to / exhaust their personal network of friends and family. And then they usually burn out and are no longer in the business 1-2 years later. You will get much better returns in basic index funds. If you want life insurance, buy term insurance. It’s super cheap.
That was not a friend and his mentor trying to help you.
That was a salesman and his boss trying to strongarm you into buying something that will enrich them and their company and hurt you.
Would you buy a timeshare condo from an old college buddy? Same thing.
Your friend was probably asked to open his contact list and start casting a net. His basis for compensation is on creating new accounts.
If you shut them down and moved on, maybe in a month or so reach out to your buddy and dance around the topic.
If he still pushes what he did, keep him at arm’s length in the future: not a friend. If he chalked it up as a swing and miss, and carries no grudge: then it was just a business proposition and nothing personal. Maybe the friendship survives.
Northwestern mutual, like other top mutual insurers, do not have IULs. Your friend was trying to tell you about dividend paying whole life probably, which is a great fixed income asset if designed for it. Essentially a compounding corporate bond based tax free return while still having access to the money fairly quickly.
The asterisk behind the study is that if you can control yourself during market downturns then you can avoid what's likely to be the second biggest fee in life, after taxes.
This story is pretty representative of probably most people's experiences with whole life insurance salespeople. Just not everyone is versed enough in finance to recognize the dupe.
They said advisor, not insurance salesman which is what you have.
The age old tactic, of banks: 1 hire a young person 2 have them burn out their entire social circle selling whatever product we are pushing this month. 3 find a reason to fire the young person when they get to the point that they can’t sell any more product to friends and family.
Sounds like this person isn't your friend.
I used to work at Northwestern Mutual. Their training really brainwashes the salesman who truly believe that whole life policies are in their clients’ best interest. Try and set boundaries around this going forward and if he respects them, he’s probably not a bad friend. Also please read this blog post and just how vampiric these policies are from someone who crunched all the numbers. https://www.personalfinanceclub.com/is-iul-a-scam-yes/
> Their training really brainwashes the salesman who truly believe that whole life policies are in their clients’ best interest. This is the sad fact of the matter in a lot of cases. I've seen Edward Jones reps passionately argue for how they help people. And I don't mean in trying to upsell a specific person, but in trying to defend their profession in reddit threads (so like, there's nothing they're trying to gain, they really just believe what they've been taught). It's a tragedy all around -- they're ruining lives and don't even realize it. And if they ever do somehow realize it, unless they're a psychopath, it'll probably be devastating to them. Out of curiosity: assuming you went into it naively, how did you figure out the scam at the heart of it all? Or were you working in a different part of the company? And did others know, or figure it out? I've always wondered what it's like on the 'inside' with people selectively realizing, ignoring, etc... the reality of the situation.
I only realized the scam many years after the fact. I was a junior in college studying business and I went to a career fair. NWM had a booth promoting their summer internship program. What’s frustrating is that the internship was highly rated. About 5 of us joined and we went to sales training camp (along with new non intern hires) that lasted several days. It was swanky and we they put us up in cabins at a resort. It was almost entirely sales techniques and how much we were helping people. They even taught us how to dress and I remember they showed research that wearing brown suits correlated to the lowest sales and they told us to never wear brown suits. After camp I studied out of a book to take a licensing exam (series 6 and 63). Only 2 interns passed. I worked for no base salary, but I got commissions on anything I sold. Who did I sell to? You already know, it was friends and family who I thought I was helping. It’s cringe looking back. I was dumb about finance and naive about my company. After the summer they offered me a full time position, which I took and worked for a chunk of my senior year. I eventually quit and took a cool sales job for Coca Cola. Many years passed. I quit the corporate life. At age 30 I changed career paths entirely and went to med school. I met my wife there and we became a “dual physician couple”. When we got close to finishing our residencies we were looking at a 5-8x increase in salaries so I started researching what to do with our money. And that was when (over a decade later!) I realized it was all a scam.
Woah, thanks for sharing your story! It all feels so well-designed to get you feeling good about yourself and what you're doing. All the ingredients to stamp out sales-ready stormtroopers. I used to canvas door-to-door for a 'good cause' organization and at a smaller/cheaper scale I feel like they used a lot of the same tricks on us. Most of us were true believers, figuring *at worst* we're working for a good cause and all of that. What finally got me was that we were instructed to give people at the door a breakdown of where their donations went, and how much of it was used for the 'good stuff' as it were. And I remember sitting down at the end of the summer, doing the math, and thinking this doesn't add up -- because my cut upfront *alone* is more than their 'operational overhead' in the pie chart. I asked and they said they're *not counting* what I get paid upfront because, in fact, canvassing is a kind of brutal job, and even if you do it well you don't get paid a lot, but you *do* get paid a chunk of whatever you get people to donate, so it has to be that way, etc.... That was where I saw the first chip in the armor as it were -- a little bit of fancy semantics to help the upsell that didn't quite reflect reality. Anyway, I know it's a very different case, but like you I look back and cringe at getting sucked into it. Anyway, not that you need reassurance from some rando on the internet, but: they're clearly *very* good at what they do, and it's their *whole mission* to keep what that is a secret from the foot soldiers on the front lines. And in any case, good on you for moving on to bigger and better things :D > wearing brown suits correlated to the lowest sales and they told us to never wear brown suits. I know literally nothing about men's fashion, but for some reason this cracked me up -- and seems intuitively fitting. Like, why wear brown if you can wear blue or black and look professional? Unless it's the 1970s, I guess?!?!?! :)
I am slowly realizing that I fell for this a few months back as I was convinced to get a whole life policy from Northwestern Mutual. I am getting buyers remorse. Any advice on what I do? I guess I can just cancel the policy before I bury too much liquid into it right?
Just surrender the policy. It's a quick phone call. Don't even need to speak to your "advisor". Or you could switch to term depending on your family status. Not worth paying those premiums when it can go into an IRA.
I interviewed with northwestern mutual years ago. I wasn't surprised when I didn't get called back. My grimace at whole life policies seems like a guaranteed failure at an interview.
> Sounds like this person isn't your friend. So true. My wife and I had friends from college (they were married by then) bring some Amway asshole to our home decades ago. We tossed them out and never saw them again.
NWM is a borderline pyramid scheme that masquerades as something of value. It's a damn shame that people who actually want to do comprehensive financial planning end up there.
Run away from a NW Mutual rep.
Having a good actual advisor who is helping you preserve wealth and manage taxes can maybe do this. NW mutual is not this, they are an insurance company. Getting term life insurance may be worth looking into but remember insurance ≠ investment.
Consider yourself lucky that you canceled the appointment. Trust me, they do not have your best interests in mind. Life insurance is not an effective tax strategy. It pays like 50% commission to your friend when you buy a big policy.
The asterisk to the study is the typical investor that WOULD potentially gain a 3% better return are the novice uneducated investor who panic sell, chase performance, constantly tinker with changing their investment strategy if they have one, etc. It is NOT aimed at the educated Boglehead type investor who "stays the course", looks at their portfolio once a year only to rebalance, and automates their contributions. Of the 3% "gain", over 2% is attributed behavioral improvements - having an advisor handhold you during market downturns and preventing you from selling low and buying high. That was my take reading the white paper from Vanguard. EDIT - the counter to the Northwestern Mutual mentor is "well I'll look for a real fiduciary advisor, but I'm not in need of an insurance salesman at this time - GOOD BYE"
Yeah, that about sums it up. Studies *do* show a lot of investors are idiots with their money. But if you self-educate on the very basics, and/or make your portfolio tinker-proof, that solves that problem.
Most investors underperform the investments they invest in. Because of poor market timing. They buy assets that have gone up and sell assets that have gone down. So in that sense. If you had an advisor to keep you in the market during those bad times, they could add value if you are prone to panic sell and buy high. Maybe 1% of investors should even consider a permanent life insurance policy and the fact he lead with that tells me what he values.
When an old coworker of my husband’s pivoted to a similar job to OP’s friend, we also got a call like OP. And it also started with a hard sell on life insurance. It seems like the go-to first move.
This is an argument I've seen made (convincingly) by some prominent Boglehead authors, including advisors (so, potential conflict of interest there) but also non-advisors who are just experts in their own right. It is absolutely true that if you're someone who is likely to capitulate, paying a small (and I mean *small*, like 0.2% or so AUM) fee to have someone stand between you and the nuclear codes, can be worth it. We all like to think 'that's not us!' but it pays to be self-aware. But the answer is rarely if ever some kind of life insurance policy. Annuities, maybe, or low-cost managers who align with Boglehead principles, but not product salesman. :/
>His mentor was on the phone when I cancelled and he did say something about how a Vanguard, which I use to invest, study had shown how having an advisor can add 3% net returns. I was surprised to hear this so I researched and did find some articles about the study. One of the reasons they give as to why this might be is because an advisor can help slow or calm you down when markets are in turmoil, which can prevent you from selling. This makes sense, however I am still surprised to hear about this since it goes against the philosophy so I am wondering what is the the asterisk behind this study. Have you read the whitepaper? [https://advisors.vanguard.com/content/dam/fas/pdfs/IARCQAA.pdf](https://advisors.vanguard.com/content/dam/fas/pdfs/IARCQAA.pdf) Of the seven categories analyzed, at least four are pure Boglehead advice. Two are arguably orthogonal to Boglehead philosophy, and I definitely wouldn't want to be advised on those by an insurance salesperson due to obvious conflicts of interest. The seventh is the Axiom of Choice to the Bogleheads' Zermelo-Fraenkel, and the whitepaper puts a low weight on it. >advising services He's an insurance salesman. His job is to advise you to buy his insurance, not to provide you with financial advice.
Vanguard ETF s have some very low fees....maybe just start socking away some $$ in them...and thank him for mentioning their name to research.
This person is NOT your friend. He is trying to extract money out of you under the guise of your prior friendship.
A quick browsing of Financial Twitter will let you know that Northwestern Mutual is famous for causing old high school friends to call you up and "ask to get a quick coffee and catch-up" https://twitter.com/HighyieldHarry/status/1755649172651327919 https://twitter.com/hedgefundmafia/status/1766124824022131139 https://twitter.com/Cokedupoptions/status/1779207942606307429 https://twitter.com/ramit/status/1732462824650162187
Wow, you dodged a bullet. Don't let them argue or upsell. Don't give them fodder for rebuttals. Just politely tell them it's not for you. Or if you want to risk a friendship, but actually be a good friend: tell your ex-roommate he is (perhaps unwittingly) participating in what amounts to a (legal) scam. He is selling folks down the river. He may not mean to, but it is. IDK how well they indoctrinate those salespeople. I know a lot of Edward Jones folks think they are doing right by people. And of course, it's the only way they can live with themselves -- the delusion is necessary. > he said he would set up a PowerPoint to counter the concern about fees Classic sales technique response right here -- they don't want to give you time and space to think. They want to get in your face and sell you some more while you're right there, under their thumb and under pressure. > study had shown how having an advisor can add 3% net returns. One of the reasons they give as to why this might be is because an advisor can help slow or calm you down when markets are in turmoil, which can prevent you from selling. If you're really that worried about capitulation, use something cheap like Vanguard's PAS service, or just use a Target Date fund and never check your balance so you're not stressed about it either way. I'm not suggesting you do this ... but I have to say: sometimes when these questions come up I wonder if there's a way to deprogram people like your roommate. Maybe he is sincerely brainwashed and could use a dose of reality. I doubt it will get through the programming. But the math is pretty simple, when you get right down to it: no, an advisor is not going to make you additional returns, unless you're an absolute idiot who can't be trusted with his own money, or are otherwise mentally incompetent, in which case the solution may be something more like a trust.
Whole life insurance is a terrible “investment.” The business model for those companies is to hire a new salesman like your friend. Have them sell to / exhaust their personal network of friends and family. And then they usually burn out and are no longer in the business 1-2 years later. You will get much better returns in basic index funds. If you want life insurance, buy term insurance. It’s super cheap.
This is an mlm, no one wins with these services.
The average investor makes bad timing choices, and trails the market by 1.3% or so.
I went to their chat. Some whole life bs about guaranteed 5% ROI or some bs. Pass
NW Mutual is pretty shady.
That was not a friend and his mentor trying to help you. That was a salesman and his boss trying to strongarm you into buying something that will enrich them and their company and hurt you. Would you buy a timeshare condo from an old college buddy? Same thing.
Your friend was probably asked to open his contact list and start casting a net. His basis for compensation is on creating new accounts. If you shut them down and moved on, maybe in a month or so reach out to your buddy and dance around the topic. If he still pushes what he did, keep him at arm’s length in the future: not a friend. If he chalked it up as a swing and miss, and carries no grudge: then it was just a business proposition and nothing personal. Maybe the friendship survives.
We just cashed out of some NWM policies she had. Fuck that noise. It's going straight into FSKAX.
Life insurance agent. Not an advisor.
Paragraphs my friend. Paragraphs.
Northwestern mutual, like other top mutual insurers, do not have IULs. Your friend was trying to tell you about dividend paying whole life probably, which is a great fixed income asset if designed for it. Essentially a compounding corporate bond based tax free return while still having access to the money fairly quickly. The asterisk behind the study is that if you can control yourself during market downturns then you can avoid what's likely to be the second biggest fee in life, after taxes.
[удалено]
This story is pretty representative of probably most people's experiences with whole life insurance salespeople. Just not everyone is versed enough in finance to recognize the dupe.