message World Financial Group

World Financial Group



World Financial Group
Type Subsidiary
Founded 2001 (under AEGON ownership)
Headquarters 11315 Johns Creek Parkway
Duluth, Georgia 30097-1517
Industry Financial Services
Products Life Insurance
Variable Universal Life Insurance
Mutual Funds
Annuity
Segregated fund
Loans
Mortgages
Parent AEGON
Website www.worldfinancialgroup.com
www.wfg-online.com
www.wfg-online.ca


World Financial Group (WFG) is a financial services organization based in Duluth, Georgia that markets investment, insurance and mortgage products through a network of associates in the United States and Canada. WFG is a Network Marketing company that utilizes a system also known as Multi-level Marketing (MLM).[1][2] WFG is a wholly owned subsidiary of AEGON.[3]

Contents

Activity

WFG insurance lines of business are managed directly by WFG in the United States, while its investment and mortgage lines of business are managed by its affiliate broker-dealer World Group Securities, Inc.

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.[4] WFG's Canadian head office is located in Vaughan, Ontario.

World Financial Group created and partnered up with Investment Advisors International (IAI), a co-owned 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, Flexible Plan Investments, Ltd. and The Institute for Wealth Management.

Industry partners

In the United States, some of WFG's provider companies include Western Reserve Life, Pacific Life, Allianz, Transamerica, Nationwide, John Hancock, and Investment Advisors International.[5]

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.[6]

History

Founded in 1991 by Hubert Humphrey, World Financial Group was founded as Alexander, Inc.. The company was renamed to World Marketing Alliance, Inc. (WMA) in the same year.[7]

World Marketing Alliance introduced the Business Format System (BFS) in 1992, a blueprint to help its associates build and run their business.[7] 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.[7] The company held its first convention in Las Vegas in 1992. It was attended by about 2,000 associates.[7]

On March 23, 1998, WMA Executive World Headquarters opened in Duluth, Georgia. The 100,000 square foot building housed 500+ employees.[7]

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.[8] In 2000, WMA was fined $125,000 "for failing to report nearly 900 customer complaints".[9]

In June 2001, select assets of WMA were purchased by AEGON and renamed World Financial Group, Inc..[10][11] Alexander Wynaendts, chief executive of AEGON, was quoted saying about WMA that "When we took the company over, we put in place very strict regulatory and compliance procedures".[12]

Announced in March 2008, World Financial Group has teamed with Laserfiche([R]), 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.[13]

Ratings

The Toronto-based WFG was named Canada's best MGA 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[14][15]

Toronto-based World Financial Group Inc. scored top spot again in 2008 for Canada's best MGA, alongside Mississauga-based IDC Financial Inc.[16][17]

Sponsorships

World Financial Group provides financial support for the following athletes, teams and events:

  • In NASCAR, the Roush Fenway Racing and Carl Edwards's ride on the #60 Ford in the Busch Series. Previously, WFG had sponsored Roush Racing on Edwards' #99 Ford in the NEXTEL Cup Series and the #50 Ford in the Craftsman Truck Series.[18]
  • In 2007, WFG signed a two-year sponsorship agreement with Fox Sports Network and the Pacific-10 Conference (Pac-10).[19]
  • On October 3, 2007, WFG agreed to a three-year sponsorship of USA Luge.[20]
  • In 2008, World Financial Group sponsored Canadian professional golfer Brad Fritsch.[21][22]
  • 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.[23]

Public speculation and lawsuits

WFG's stated mission goal is to "serve the financial needs of individuals and families typically overlooked by the financial services industry".[24] 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 NASD disciplinary action.[25][26] In preparation for Aegon's acquisition in 2001, "World Marketing Alliance 'ramped up' compliance before the acquisition".[27] 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." [27]

A 2004 NASD disciplinary action report summarized disciplinary actions against WGS. According tho 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."[28]

In 2006, state regulators in the State of Missouri have accused broker Jolee Martin, and World Group Securities (WGS), a division under World Financial Group, of making variable annuities sales that are unsuitable and misrepresenting investment returns, in addition to private allegations making similar claims. While WGS neither admits nor denies the Division's investigative findings and conclusions, WGS agrees to implement the following remedial actions in the State of Utah. To list a few, all seminars given by WGS registered representatives will need to be filed with and approved by the home office prior to any presentation. Supervisors are not allowed to approve their own seminars or seminar materials. Failure to comply by a registered WGS representative will result in corrective action up to and including termination. [29][30] 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.[27]

The above mentioned Bloomberg article also suggests that WMA's corporate culture is retained in WFG, stating that "Humphrey (the founder of WMA) staged lavish conventions and handed out an assortment of diamond-studded rings and other luxuries to motivate the troops.[27] This tradition is carried further in WFG where "World Financial leaders who achieve sales goals are awarded gold watches, diamond-encrusted rings and visits to the top of the 48-story Transamerica Pyramid."[27]

References

  1. ^ Aegon in Missouri Provokes Regulators Finding Sales Deceptions Bloomberg : May 28, 2008
  2. ^ http://www.sec.gov/Archives/edgar/data/769218/000092838503000979/d20f.htm#tx305_4
  3. ^ "2005 Annual Report". AEGON Review of Operations: Americas. http://www2.aegon.com/annual_report/2005/eng/aegonamericasaa.shtml. Retrieved February 2, 2007. 
  4. ^ Mutual Funds Dealers Association of Canada
  5. ^ [1]
  6. ^ [2]
  7. ^ a b c d e http://www.huberthumphrey.com/flash/timeline.swf
  8. ^ http://www.cc.state.az.us/divisions/securities/news_releases/1998/nov25-98.pdf
  9. ^ http://www.investmentnews.com/apps/pbcs.dll/article?AID=/20010305/SUB/103050717/-1/INIssueAlert04
  10. ^ http://world-financial-group.wfhdirectory.com/info/world-financial-group/
  11. ^ http://www.npros.com/dir/worldmarketingalliance/
  12. ^ http://www.iht.com/articles/2008/05/28/business/regs.php
  13. ^ "World Financial Group, Inc. Launches "Navigator System".". http://www.accessmylibrary.com/coms2/summary_0286-34102042_ITM. 
  14. ^ "August 2006 Investment Executive". http://www.investmentexecutive.com/client/en/News/DetailNews.asp?IdPub=134&Id=35020&cat=29&IdSection=29&PageMem=&nbNews=. 
  15. ^ "August 2007 Investment Executive". http://www.investmentexecutive.com/client/en/News/DetailNews.asp?IdPub=150&Id=40344&cat=29&IdSection=29&PageMem=&nbNews=. 
  16. ^ "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=. 
  17. ^ "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=. 
  18. ^ "Roush Fenway Racing Corporate Sponsors". http://www.roushracing.com/sponsors. 
  19. ^ "Pac-10 Corporate Partners". http://www.pac-10.org/sponsorships/pac10-sponsorships.html#a. 
  20. ^ "USA Luge Corporate Sponsors". http://www.usaluge.org/sponsors.php. 
  21. ^ "Fritsch Takes Timeout for Open". http://www2.canada.com/ottawacitizen/columnists/story.html?id=f1f6e8e5-711a-470f-9d72-0c3d9f699f01. 
  22. ^ "World Financial Group Sponsorships". http://www.wfg-online.com/wfgSponsorships/. 
  23. ^ "World Financial Group Named Title Sponsor for Nanaimo Clippers Junior Hockey Club". http://www.ibtimes.com/prnews/20081118/world-financial-group.htm. 
  24. ^ "World Financial Group.". http://www.wfg-online.ca/whatMakesUsDiff/. 
  25. ^ "Business Wire press release.". http://findarticles.com/p/articles/mi_m0EIN/is_2001_Oct_22/ai_79357030. 
  26. ^ "NASD press release.". http://www.finra.org/PressRoom/NewsReleases/2000NewsReleases/P011410. 
  27. ^ a b c d e "Bloomberg Article". http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a8N_74GdteOg. 
  28. ^ http://www.finra.org/web/groups/industry/@ip/@enf/@da/documents/disciplinaryactions/p012791.pdf
  29. ^ http://209.85.173.132/custom?q=cache:vj66tFxgiAcJ:www.securities.utah.gov/dockets/06008002.pdf+world+financial+group&cd=4&hl=en&ct=clnk&client=google-coop-np
  30. ^ http://www.sos.mo.gov/securities/orders/AP-06-48.asp

External links

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