“What do you think of Northwestern Mutual?”
This question, which landed in my inbox from a good friend, was sure to be the kickoff for a great conversation.
Over a few quick text messages I knew immediately what was going on. I asked him for some context, knowing full well what was soon to follow. He responded:
“Life insurance, whole life”
And there it was. It clicked. My friend was being conned by someone who hadn’t the slightest clue of what he was selling. Northwestern Mutual is the king of college “internships” in which they turn college students into underpaid robo-dialiers to sell insurance to people who have zero idea of what whole life insurance really is.
Now, look. I’m willing to admit that this blog is chock full of finance snobbery. I know. It’s bad, and I’ll try not to do it.
But come on. Northwestern Mutual will give an “internship” to anyone with a pulse, which pretty much means they have legions of interns who are 100% sales and 0% finance. These are kids are so caught up in the concept of working in “finance” that they turn into literal drug dealers.
How do I know? Because I was pitched, just like any other college student. Of course, being the finance snob I pretend to be on this blog, I snubbed my nose at the idea of becoming a telemarketer and calling it an internship. The poor HR person that worked the booth at the job fair wasn’t prepared for my endless questions about licensing either.
Let’s get back on topic. I sat down with my friend and listened to his interpretation of the phone call and the meeting that was set up.
He repeated buzzwords like “compound interest,” “growth,” “retirement,” while championing whole life insurance as the investment of the century.
A fast-talking “mentor” who sat in on the meeting made this out to be the investment of a lifetime. Then I looked over the paperwork—and an investment of a lifetime this was (obviously) not.
According to the sheets, his whole-life policy would zero-out only in year 20, at which point he would have put in nearly $70,000 and have slightly less than $70,000 in cash value. This cash value could be accessed only with a credit line, which is common for tax avoidance. Loans are not income—cha-ching! But a loan against this policy would cost 8% per year. ROFL.
My buddy told me that he had another meeting in the future. After our fair share of beer we concluded that I’d tag along for the next meeting. And I can’t wait.
This is going to be the time of my life. I almost feel bad for it, because I am the last person that you’d ever want to pitch an extremely expensive investment product to, and I have very few reservations about giving this intern and his mentor a reminder on fiduciary duty.
It really peeves me to encounter things like this. Not only does it prey on people who cannot make sense of what is being pitched to them, it does it in the worst way possible. It gives financial planning a bad name, and it’s the reason why financial planners are quickly joining the ranks of lawyers and used car salesman. I really, really hope this isn’t standard practice. However, it is playing well into my goal of opening a wealth management office in the future. 😀
In the coming weeks, expect a post on this meeting. I’m stoked; it’s going to be a blast.
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