MLM opportunities - why focus on how much money can be earnt but not tell us how much you are earning?

Evening all,

Brian, with regards to your points 1+2, why do you feel that is necessary? I certainly dont remember BT putting on my bill how much they made from my monthly bill!

Point 3, welcome to the wonderful world of residual income!, and leading on from that to Phils point I always make sure my customers are aware of any updates to our services,that may benefit them. For example I have a long standing customer who signed up for line rental and internet,long before the introduction of our combined calls/broadband(known as broadcall) broadcall is the cheaper option,I made her aware of this and she changed to broadcall,saving her money!

Happy customers dont leave!

Andy - we know how much BT make from the bill - they make the entire amount!

I'm well aware of residual income as that makes a significant part of our firm's income. The key difference is that we provide a level of service for it, as opposed to random or adhoc selling opportunities.

BTW, we just moved from Broadcall to BT - much cheaper and much faster broadband.

Anyway, there will always be a split camp on the subject of MLM. Certainly not a business model I'm comfortable with.

Personally, I'd love it if my commission rate was shown on UW bills because customers would possibly think "I'd like to earn an ongoing income every time somebody pays their bill". I tell all my customers how the money works so they know a) why it's in my interest to ensure they are happy customers and b) how they could earn an income should they want to become a distributor.

Point 3 is absolute gold dust - that is the beauty of the UW model. Distributors get paid over and over again for doing the same work once. That's one of the main reasons people become distributors. It's like the perfect affiliate scheme - none of this 30 day cookie business, you get paid whenever the customer pays their bill, even for services they subsequently take out directly via head office!

I think Brian is making the pointy that it is unregulated and people could be being mis sold.

Being an IFA Brian is heavily regulated by the FSA, i think nowadays you have to state commissions on mortgage quotes etc don't you Brian? I seem to remember my friend, who is also an IFA pointing his commissions out to me when he handled a mortgage for me a few years back.

I think there should also be relevant disclaimers and risk warnings attached to, for instance, Stuart Ritchie's signature. Such as,

"the majority of MLM distributors make little or money from MLM schemes. It is illegal for an MLM promoter or distributor to persuade anyone to make a payment by promising benefits from getting other people to join an MLM scheme. Do not be misled by false claims that high earnings are easily achieved from MLM schemes"

I have checked our entire private client base going back 17 years, and there is only 1 person who's primary, regular income is noted as being from MLM schemes. Kind of says something doesn't it!

Keep a perspective, Trowbridge is hardly the epicentre of the MLM industry. I would ask you in your 17 years, how many petro chemical engineers have used your services? The answr of course is as irrelavant as your comments

Your comments just show how biased your opinions are and as with any relationship if that shows, I wouldn't use you which would just add to your statistics.

Our client base stretches way beyond the County Town of Wiltshire. MLM distribution is not a specialist occupation, whereas a petro chemical engineer obviously is, so you need to compare apples with apples, not pears. We actually have quite a few engineers on our books. So my comments are completely relevant.

And as for the disclaimers, I think they are pretty valid based on my observations.

Brian

Brian

I don't particularly want to get into a disagreement with you regarding the specialities of occupations but like most occupations I believe they are distinct and therefore special. But as I said before try and keep things in perspective. First of all most people who are involved in MLM do not do it on a full time basis they are involved either because they use and like the product/service or they use it as an additional income stream.

In relation to the number of clients you have dealt with over the last 17 years (and I commend you for taking the time to check every clients occcupation) to the number of distributors who do MLM full time and want the services of an IFA which is a tiny proportion of the UK workforce, it is hardly surprising that you wouldn't have any on your client base. And coupled with your obvious disregard for the industry and the people involved in it, and if you apply the 4N philosophy of meet, like, know, trust then those involved will recognise your antipathy and find someone else.

With regard to your request for disclaimers - it is a requirement when presenting any MLM business opportunity with a view to recruitment to have a disclaimer. It is not necessary to have a disclaimer on signatures or business cards.

I'll just respond to 3 items if I may:

1. Our database shows very clearly both primary and secondary occupations for our clients and prospect database, and also from what sources income is recieved, which includes MLM.

2. I have no disregard for the industry, just (a) the positioning of the potential rewards that MLM'ers go on about (see UWC for this), and (b) continuing income for little or no work (UWC)

3. If disclaimers are a requirement if someone is looking to recruit, then your signature doesn't need a disclamier but Stuart Ritchie's, as an example, does, along with 40 second at breakfasts if their is an inducement to recruit?? Possibly being a bit anally retentive here, but that's what you get from compliance supervisor!!

Brian

i

I'm glad my signature caught your eye and I'm pleased to say my statement that your income can grow like the graph (i.e. exponentially) in MLM is true, due to the power of duplication: e.g.

3 x 3 = 9
9 x 3 = 27
27 x 3 = 81, etc., etc.

The important word is "can", not "will". I can say it "can" because mine has over the last three years and I know of others who have been in longer who have reached the part of the graph where the incline is at it's steepest. I and the colleagues I'm talking about are probably in the top 3% and we are focussed on building serious businesses, following the systems and will, undoubtedly, earn multiple six and, in some cases, seven figure passive incomes for many years. I joined for the large passive income and the lifestyle, hence my focus on building a substantial business.

There are also a lot of people who join to earn a few hundred pounds a month and that is where they choose to stop - most of them in fact (some then see the larger potential). The average disposable income of a family can easily be doubled with a small amount of regular, well directed effort. That is great and the beauty is the business allows them to do just that.

A well respected colleague in our business is famous for a phrase "none, some or lots". In other words, if you do nothing, you will get "none", do something and you will get "some" and do lots and you will get "lots". I'd suggest anybody can be a success in MLM if they are teachable, willing to follow the system and prepared to work to get it.

Of course, it also gives many other benefits, including personal development; association with positive, ambitious, motivated people; confidence; etc.

I think MLM schemes do have a standard disclaimer don't they? Something about everyone is different and you only get out what you put in if I remember rightly.

Brian, you mentioned about the agent getting paid commissions in the future for doing nothing - but isn't that exact what happens with B & C, Life & other FS insurance products?

I know many brokers who are earning £1000's a year in renewal commissions from ASU policies and you don't have to do anything for that money.

Not having a dig mate, just trying to balance things out a bit.

All the best, Steve

Fair point Steve. "Drip" commission for buildings and contents insurance, life assurance, etc. is a similar concept to repeat commission for Utility Warehouse distributors. Although the companies paying "drip" commission have, as I understand it, started getting funny about paying you if you're no longer authorised to trade by the FSA (either directly or as an AR (Appointed Representative)).

I guess the difference is with Utility Warehouse you get paid if the customer you introduced subsequently takes out other services, whereas I'm not aware of insurers doing that. For example, a good friend of mine has been in the business since the beginning, over 13 years ago. He introduced customers back when Utility Warehouse only supplied cheap landline calls with a "piggy box" that plugged into your phone socket. Some of those customers are still with him and have gone on to take the myriad of other services Utility Warehouse now offer. He gets paid a monthly commission on the new services, all because he was the original distributor.

To be fair Brian, you've worked for many years in an industry which pays ongoing renewal commission in return fro a reduced front end fee. There will come a time when clients hold an investment beyond the break even point and then you get paid for doing no more than an attentive UW person does.

On top of that, until very recently the way an adviser got paid was based on a percentage of the product premium/sum assured. So a client taking out £150,000 of life assurance paid you more than someone taking out £30,000 worth. All for the same work.

Only now the switch to fees is taking place have these little anomolies been addressed, and even then not in every case.

there is no such thing as a free lunch.

sell your friends, neighbours, people you meet short and you gonna regret it.

UWC have some top people - I know some.

Thanks Paul.

Unlike many of IFA's we are a fee based practice, so what may have been normal business for some is not normal to us.

A client can still agree to remunerate via a percentage if agreeable to them. We charge on a project basis, which includes a combination of value we bring to the table, expertise utliised, time required, and risk. Although something may take the same time, the higher the value the more risk, certainly from a PI point of view.

The key difference is this. My clients agree in advance what work we will do for them, and what the remunertaion will be. I don't see that with UW.

Brian