Financial MLMs: how to spot the difference between a scheme and an actual business
Published By admin with Comments 0
Between rising interest rates, a shaky stock market and the threat of a trade war with the U.S., it’s no surprise that financial uncertainty has instilled fear in people in recent years.
And unfortunately, this financial uncertainty makes people more vulnerable to falling for get-rich-quick (or “quicker”) schemes in times of need.
Most of us are familiar with MLM schemes (aka “direct sales” or “network marketing”). These companies rely on independent consultants (usually someone you went to school with) to push alleged immune-boosting essential oils or shakes that help you drop 20 pounds.
However, MLMs haven’t just cornered aspects of the wellness market. Now, they’re selling financial products, too — and these companies aren’t new. Some bigger financial MLMs have been selling financial products like mutual funds and annuities since the 1970s.
Like any MLM, when you buy their product, the rep receives a commission, but so does the person who recruited them and their recruiter’s recruiter, and so on.
We are not saying all MLMs are scams. Under Canadian law, if they’re selling you a product or service, then they’re considered legitimate businesses. However, there are some questions you can ask yourself before investing your money in businesses to ensure your financial security.
Content retrieved from: https://www.msn.com/en-ca/money/topstories/financial-mlms-how-to-spot-the-difference-between-a-scheme-and-an-actual-business/ar-AA1AUGxm?ocid=finance-verthp-feeds.
