I disagree with you guys in parts.
As an investor in this firm, I did my research.
I found that over 15% of the reps have been with Primerica for 15years
or longer and 30% of reps for 10years or more.

Additionally, they cannot offer products or help clients unless being schooled and licensed first.

Secondly, their backgrounds have to be CLEAN/CLEAR else they will not be issued a life insurance or securities or mortgage licenses. Which also means they cannot work with PRI.

Thirdly, I’ve also found that Primerica provides a lot of training and education to their reps in order to beat their competions.

These things were important to me in investing millions in this firm.

Check them out for yourselves too.

But the stigma still stands. I’ve been approached by several Primerica consultants who explained over lunch or coffee how I could become a “business owner” and fit into the pyramid looking structure.

As a general rule, I was appalled by the knowledge and experience of these representatives (AND ONCE AGAIN I KNOW THERE ARE EXCEPTIONS) – but many of these reps were recruiting their parents, neighbors, babysitters and others to join in their business. If this is where middle income America is supposed to get their financial advice, we are in serious trouble.

Sticking to the investment – yes, you’re right. My purpose is not to debate the merits of Primerica as a service to middle America but to analyze the stock as an investment vehicle. And with significant selling pressure likely to increase as Citi and other private investors dump their positions, I believe there is risk in owning the shares.

I could be wrong – it wouldn’t be the first time and it certainly won’t be the last. Primerica could shoot to $30 or higher. But with the risk of selling pressure and what I believe to be a poor business model, Primerica strikes me as a better short than long position.

Thanks for the comments guys,
zachstocks.com

Of course, I am not as familiar with Primerica as yourself (also not as biased) but I have a good friend who is an RVP in the organization and have come to learn a few things. Zachary is not wrong but it’s important to separate the company from the distribution chanel. Primerica reps are not employees, 90% of them will come and go and 90% of them make no money. The MLM structure counts on that. If everyone who joined tomorrow could make RVP, then the pyramid would have to expand exponentially. Pretty soon, 1 in 3 people in the U.S. would be Primerica reps. This is evident in the way that recruiting is more important to reps than selling the product -and in the way they make recruits PAY MONEY TO JOIN. And they recruit anyone from anywhere. While I’m sure there is the odd anecdote of a successfull Merrill Lynch veteran jumping ship to be a “business owner” (assuming the guy wasn’t fired or chased out for embezzling), these are far outweighed by gas station attendants who joined with the promise that they could become rich. This is what bothers me about this model, the only thing anyone speaks of is money, and free trips. My friend is the least educated of my group, but perhaps the smoothest talker. He does not try to recruit from our social network of bankers and traders, but does engage assistants, retail store employees -people who are a bit more needy and who would love to buy into the idea that you don’t have to be too smart to become rich.

While I respect that you care about your clients financial needs, I witness more of my friend’s downlevel reps trolling malls looking for recruits than putting their time into understanding the markets and financial products.

As a Regional Leader with Primerica, I will aggressively disagree with several of the statements in this article that lead readers to believe that it is a bad thing that the company is focused around a network marketing approach and utilizes independent contractors.

Without knowing anything about the background and past experience of these representatives, it is unfair to categorize them all as if to say they are inexperienced or unqualified. Case in point, two of the people on my team left Merrill Lynch and Ameriprise with a combined 19 years of experience in the financial services industry, and knowing what they knew, they already saw great merit in Primerica as well as their opportunity for growth. The fact that representatives are not employees, but are independent business owners, only serves to give them more value and drive to become successful.

Without a doubt, there are people that join Primerica for the opportunity, and then simply don’t have the desire to become succesful by learning all they can about how money works so that they can properly educate our clients. Those people give up after a short time and leave the company. It is the rest of us that stick with it, not only because of the story behind the company and how the moral and ethical values that we promote lead to providing better service for our clients… not only because of the opportunity to grow a business that can be left as a legacy to our children… not only because of the potential to earn great amounts of income by working hard to build up a team of professional, knowledgeable, and respected consultants… but we stick with it because we don’t only believe in what we are doing with our heads, but it’s in our hearts too. When I sit down with a family that is in financial trouble, I provide them with a financial plan that shows them how to change their spending pattern without needing to spend more every month, and provide them with a solution so they can get out of debt faster, provide for proper income protection, and savings for their retirement or their children’s education… and I don’t charge them a penny for doing any of that. Where’s my reward? Of course, if I provide them with any products that can help them, I earn commissions… and in the cases when they don’t require any products or they are better served by similar products from other sources, I earn nothing besides the peace of mind of knowing that I did the right thing to help that family… but moreso, the reward comes from the referral business that they will send my way.

You may be good at reading financial fundamentals on a company’s SEC statements and providing your opinions about the fiscal strengths and values of a company’s stock, but perhaps you should stick to advising in that capacity and refrain from publishing opinion about what a company does or how they do their business until you truly know what you are talking about.

– Mike