| The
Training Program
So
how about [XXXX] Corp's "top training program"? That's
guaranteed to help the new rep earn that fantastic income, right?
There
are no guarantees, of course. But firms truly interested in attracting
and training those gems who will produce can spend a heap to get
them and certainly don't want to lose them to competitors. They
offer reasonable pay structures, benefits, a training program, and
a strong lead generation system designed to give every rep a chance
to produce. The firm doesn't want to spin its wheels attracting
reps who won't stand a chance to begin with. They're careful to
seek reps who have a proven track record of sales. If they can't
attract those, then psychological personality profiles are given
in the attempt to weed out those who can't handle the long hours,
possible low initial pay, and rejection inherent in sales. Even
the best efforts result in a turnover of 10-15% in the sales profession,
so care is taken to ensure that the investment in possible producers
is done wisely. No manager at a reputable firm wants to spend massive
chunks of his valuable time training reps to leave, but at a scammer
firm, that's exactly what he is expected to do!
At
a scammer firm, the key to keeping the business profitable is to
get the reps to shoulder the costs, including training. Reps may
be told up front that they will be paying for the program, or the
cost may be creatively hidden, being misrepresented to the rep as
being just the cost of "licensing and a background check."
Furthermore, the scammer firm must go through a lot of
reps just to keep this program profitable. Some firms promise to
reimburse up front costs contingent upon some goal (one that few
in fact attain, though it is represented otherwise). Those who drop
out of the program after paying and becoming suspicious can often
find the firm refusing to reimburse; the firm can simply cite that
they did not complete the goal that reimbursement was contingent
upon. Even those who attain the goal may find that the "rules"
have changed or some other obstacle to getting reimbursed has come
up.
I
believe some fault lies in the law here. If you want to work as
a registered representative of a broker-dealer, you must have a
firm sponsor you to get your licenses with the NASD, and
this leaves the firm wide open to abuse its role. Costs
for the basic licenses are listed on the NASD's site; beginning
reps usually require 2 or 3.
The
costs of obtaining the licenses are really quite minimal, and a
rep can do it on his own time with only a no-cost sponsorship from
a firm. However, the scammer firms may not tell him this and may
further inform him that the cost of "licensing" will be
some ungodly figure. Without knowing the NASD's true licensing costs,
many inexperienced reps will shell out hundreds and even thousands
of dollars for what they believe is basic licensing (or even a criminal
background check, the cost of which is likewise quite minimal --
and no reputable firm has EVER required ME to pay for it anyway!).
When
confronted, the scammer firm may advise that the remainder of the
fees are for the training classes. At one firm, reps paid
as much as $75,000 for the licensing / background check / training
classes!*
It
isn't illegal to charge for training classes, of course. However,
it most certainly is illegal to trick the rep into paying
an exorbitant amount for these classes without his knowledge. Even
uglier is the fact that some scammers promote a "paid"
training program but neglect to mention to the rep that this pay
is a draw against future commissions (read: A
LOAN). Once again, unless the rep is smart enough to ask, he may
end up owing the firm a load of money if he leaves!
It
is worth noting that the inexperienced work force the scammers seek
need this training, and the scammer may avoid hiring an
experienced rep who doesn't require this licensing or training.
Similarly, recruits who cannot afford the licensing/training may
invariably not be offered jobs. Some scammers even compensate their
managers according to how many new recruits they can get paying
for this licensing/training.
In
summary, the training program run by scammers may be designed not
to mold hopeful new recruits into tomorrow's top performers; it
may be designed to keep constant recruiting profitable.
But
there's more money to be made! The next step is getting the recruit
down to producing -- mining his friends and family!
*
Quote is from public forum. |
Financial
Scam Home]
