Personal Finance

Greatway Financial, scammed my wife into an Insured Retirement Plan with Universal Life using a BMO Insurance policy.

[OP]
Member
Jan 31, 2008
479 posts
172 upvotes
Summerstown, ON

Greatway Financial, scammed my wife into an Insured Retirement Plan with Universal Life using a BMO Insurance policy.

My wife, a new immigrant from the Philippines, who was a new immigrant to Canada circa 2014 was duped into signing up for an Insured Retirement Plan by Greatway Financial.

They sold her some life insured life insurance "investment" known as an Insured Retirement Plan

After 5-years, they tried to recruit her into becoming a so-called financial advisor, obviously I questioned this and looked deeper into the "investment."

So the investment was costing her $150 per month, but somehow, it left her with less then her principal payment after 5-years.

When she tried to cancel, they informed her that it would cost her $2,800 in "surrender charges" which is the equivalent of nearly half of her investment.

All I can say is that many people have absolutely no clue about how to use RRSP, TFSA or why they should use segregated funds or life insurance "investment."

My wife was duped by Greatway Financial's advisor, I hope nobody else is. I have no idea why BMO is staining their reputation with a company like this.

When she tried to cancel, they attempted to talk her out of it for close to 30-minutes.

After a careful review, it was very clear this product from BMO (which was legitimate) was only suitable for high net worth individuals who maxed out their TFSA & RRSP, as well who had substantial supplemental income that they wanted to save for retirement. The product outlined a recommended age of 35+ (she was only 27) and had no savings, worked min. wage, and did not have substantial supplemental income.

Please be careful out there before signing contracts.

Although the law states an advisor must work in a clients best interest, this may not always work out as it is suppose to.
Last edited by chriskanaan on Apr 16th, 2020 11:40 pm, edited 9 times in total.
"It is never too late to be what you might have been. "
124 replies
[OP]
Member
Jan 31, 2008
479 posts
172 upvotes
Summerstown, ON
My wife had paid into the Greatway Financial (via BMO funds) $150 a month since Nov. 2015 and ended up with only $6,400 in February 2020 (below principal)

Greatway Financial is not great at all if they are allowing their agents to push Insured Retirement Plans on products who lack suitability.

It is heinous. Be very careful out there. Some people may not realize this "investment" is not for them for many decades down the road.
Last edited by chriskanaan on Feb 11th, 2020 3:47 pm, edited 1 time in total.
"It is never too late to be what you might have been. "
Deal Addict
May 16, 2017
1837 posts
2333 upvotes
It isn't a fraud - but it is an inappropriate investment for people that aren't capable of contributing in the order of $THOUSANDS per MONTH.

I'd allege that Greatway Financial fuels inappropriate investments using Multi-Level Marketing (MLM) with barely qualified "Investment Advisors".

Still, the company and its "advisors" could be liable for regulatory and/or civil damages for the alleged inappropriate "advice" if anyone ever decided to spend the time and lawyers' fees to start a suit,
Newbie
May 10, 2012
16 posts
21 upvotes
London, Ontario
I agree it's not a Fraud, it's also the fact that most people don't spend the time to increase their knowledge about something.
If you are buying a car would you blindly trust a dealership's sales rep and trust whatever they say and buy the first vehicle they suggest??? Does that vehicle even fit your needs??
I think everyone's situation is different and it's unfortunate that someone would sign a contract without knowing what their need is.

We are in the information era and it's not acceptable to me when I hear about these situations when someone didn't read a contract they signed and now are thinking they were scammed.
Yes maybe you don't have the time to do such a thing but it's your money and life that you are putting at risk without knowing about it.

Regardless, Life insurance is similar to any other product out their. it's a very powerful tool if you utilize it properly and it's highly under scrutiny from CRA.
So I suggest to you to read more about it and see what TAX benefits it has.
Deal Fanatic
Jul 1, 2007
8506 posts
1644 upvotes
New immigrants are the bread and butter for companies like this.
Money Smarts Blog wrote: I agree with the previous posters, especially Thalo. {And} Thalo's advice is spot on.
Deal Addict
Aug 1, 2006
1972 posts
1505 upvotes
Toronto
Sorry OP your wife had to go through this. Those RESP companies that leave their pamphlets in hospital wards , or who recruit people you know to sell their policies, are kind of similar. They have high yearly fees and basically invest your money in GICs. If you try to pause the plan or leave, there are high penalties. And if your child doesn't attend post secondary education you usually lose all the earnings and government grants. The only saving grace is the payout for students attending post secondary education gets a bit of a boost from students who lost their payouts at the end when they didn't go on to higher education.
Deal Fanatic
Jan 19, 2017
5624 posts
3141 upvotes
chriskanaan wrote: My wife who is a new immigrant to Canada circa 2014 was recruited by Greatway Financial.

They sold her some life insurance investment.

After 5-years, they tried to recruit her into becoming a so-called financial advisor, obviously I questioned this and looked deeper into the "investment."

So the investment was costing her $150 per month, with annual fees of around $700 on an "investment of over $6000."

That means, 5/12 payments per year were going essentially into fees, leaving just over half of her principal to invest.

When she tried to cancel, they informed her that it would cost her $2,000 in "surrender charges."

All I can say is that many people have absolutely no clue about how to use RRSP, TFSA or why they should use segregated funds or life insurance "investment."

My wife was duped by Greatway Financial, I hope nobody else is. I have no idea why BMO is staining their reputation with a company like this.

When she tried to cancel, they attempted to talk her out of it for close to 30-minutes.

Please be careful out there.
According to my calculation, there are 51 months between Nov., 2015 and Feb., 2020 if you include both Nov., 2015 and Feb., 2020. Since the monthly payment is $150, she would have paid total of $150 x 51 = $7650. So the value of the investment has gone down by $1250. That is a average of $315 per year or about 5% of the $6400 investment. That is about the average fee for a segregated fund from a life insurance company. If the annual fee is $700, then the total fee paid would be $2800. If the investment didn’t go up in value, the current value would have gone down by $2800. If the current value is $6400, that would mean the investment would have to go up by $1550 to produce a current value of $6400. Why did you raise the question after 4 years? I bet you that the sales person(I.e. investment advisor) gave her a previous high return performance and she felt for it. Now she is not getting the high return and feels it is fraud. Did you know she bought the investment in 2015? There is nothing to do with new immigrants or not about lack of knowledge for investment. I have seen people born and raised in Canada, well educated, still knows nothing about investment choices.
[OP]
Member
Jan 31, 2008
479 posts
172 upvotes
Summerstown, ON
ml88888888 wrote: According to my calculation, there are 51 months between Nov., 2015 and Feb., 2020 if you include both Nov., 2015 and Feb., 2020. Since the monthly payment is $150, she would have paid total of $150 x 51 = $7650. So the value of the investment has gone down by $1250. That is a average of $315 per year or about 5% of the $6400 investment. That is about the average fee for a segregated fund from a life insurance company. If the annual fee is $700, then the total fee paid would be $2800. If the investment didn’t go up in value, the current value would have gone down by $2800. If the current value is $6400, that would mean the investment would have to go up by $1550 to produce a current value of $6400. Why did you raise the question after 4 years? I bet you that the sales person(I.e. investment advisor) gave her a previous high return performance and she felt for it. Now she is not getting the high return and feels it is fraud. Did you know she bought the investment in 2015? There is nothing to do with new immigrants or not about lack of knowledge for investment. I have seen people born and raised in Canada, well educated, still knows nothing about investment choices.
She fell for it as a new immigrant to Canada working in rural Saskatchewan for Tim Hortons under a work visa.

As for me, I was pushing her for the past couple years to determine what the $150 charge was in her account for insurance and she kept shrugging me off.

Greatway Financial is using Filipino immigrants to market/sell to Filipino immigrants; I suspect many of the "sellers" who are referred to as "financial advisers" do not even know they are engaging in unethical behaviour, as many of these sellers are already victims of buying the very same policies the company is pushing to unsuitable clientele.

The scary part for me is they are able to use the legitimacy from the Bank of Montreal to do it!

I am truly bedazzled that with all of our financial regulations in Canada, Greatway Financial is able to continue operations without repercussions. This week, I will likely contact the Saskatchewan provincial insurance regulator and so some research into whether we can pursue Greatway Financial for deceiving by selling her an Insured Retirement Plan which was adverse to her financial interests.
Last edited by chriskanaan on Feb 11th, 2020 3:59 pm, edited 2 times in total.
"It is never too late to be what you might have been. "
Sr. Member
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Dec 28, 2010
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Well 6 years in Canada, I'm not sure but that doesn't sound like a new immigrant to me. Sure, you need to be careful when buying financial products but waving the 'new immigrant' label seems unnecessary. At one point anyone of us will have to take responsibility of their actions. Are you an immigrant as well, or a Canadian citizen?
Do you want to meet the love of your life? Look in the mirror. | Byron Katie
Deal Fanatic
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Sep 23, 2009
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She was paying $150 per month for investment and insurance?

You are looking at what the investment has grown to but you have not accounted for the insurance portion.

Insurance seems like a scam until you need it to be paid out.

Of course, I doubt the insurance coverage would cost the same as what was ultimately paid .... the people who "Advise" need to be paid from somewhere.

In the end, she probably did over pay for what she could have got elsewhere, but that cost is lower than what you have claimed.
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Sep 23, 2009
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In terms of scams, I don't understand how "Canadian Protection Plan" is allowed to call themselves CPP.

That's a form of trickery as many are told paying into CPP is mandatory if you are employed.

Of course, they are talking about a different CPP ... but how they can be allowed to sell a financial product with this moniker seems off to me.
[OP]
Member
Jan 31, 2008
479 posts
172 upvotes
Summerstown, ON
Born and raised.

As for my wife, they lured my wife within her first months as an immigrant to Saskatchewan but she didnt clue onto the scam until 5-years later after they tried to recruit her, much thanks to me.

If it sounds too good to be true, it probably is...





VESTEGAARD wrote: Well 6 years in Canada, I'm not sure but that doesn't sound like a new immigrant to me. Sure, you need to be careful when buying financial products but waving the 'new immigrant' label seems unnecessary. At one point anyone of us will have to take responsibility of their actions. Are you an immigrant as well, or a Canadian citizen?
Last edited by chriskanaan on Feb 11th, 2020 4:16 pm, edited 1 time in total.
"It is never too late to be what you might have been. "
[OP]
Member
Jan 31, 2008
479 posts
172 upvotes
Summerstown, ON
First post by a user, it is probably a Greatway Financial agent

On the Funds Fact sheet it clearly says that this product (Insured Retirement Plan) should only be sold to folks who maxed out her TFSA, RRSP have a "high net worth" and high income.

As someone who studied securities, I know it is legally required for an adviser to act ethically and professionally. Pushing a financial product that is designed for the rich who have maxed out their TFSA/RRSP + have a high income/net worth unto a new Canadian immigrant who is working as a min. wage employee at Tim Hortons certainly DOES NOT meet that criteria. Greatway Financial allowed an unethical transaction to take place.

The lapse in judgement from Bank of Montreal to associate with a company that engages in behaviour like this is rather appalling.

Greatway Financial is in the business of marketing to new immigrants to Canada before recruiting them as "financial analysts" to scam their family and friends.

I believe wholeheartedly that Greatway Financial is on the border of what would constitute outright fraud and simply unethical behaviour (which they could be liable for financially, as noted in this thread.)

After duping my wife, years' down the road they tried to recruit her and assured her she would be taking cruises. *DO NOT DEAL WITH GREATWAY FINANCIAL*
ThatGuyOverThere wrote: Lol at this post. Legal and fraud in the same line?

It was your spouse’s decision to take the plan. Why are you pissing yourself?

I’ve seen Greatway’s proposed strategies and it make sense. I actually wish I knew it earlier in life. Please show me where it says it’s ILLEGAL to have these plans if you’re not high net worth. Is it for everyone? Probably not, it’s all based on needs. I unfortunately, was not able to qualify due to health reasons.

Greatway is one, if not the only company that ACTUALLY EXPLAINS their policies. They take a minimum of 2 hours to make sure the client (which isn’t you btw) understands the strategy (yes even the surrender charges) before they even get the client to sign anything.
Last edited by chriskanaan on Feb 11th, 2020 3:53 pm, edited 2 times in total.
"It is never too late to be what you might have been. "
[OP]
Member
Jan 31, 2008
479 posts
172 upvotes
Summerstown, ON
Took a look at Saskatchewan's Life Insurance bylaws and it clearly seems that Greatway Financial would stand in stark violation of section IV (Professional Misconduct)

https://www.skcouncil.sk.ca/download%20 ... 202020.pdf

Selling an IRP to a minimum wage food worker, with the Fund Fact sheet from BMO clearly says this product is suitable only for high net worth individuals who have maxed out TFSA/RRSP sure does seem like a breach of professional misconduct; it may also be a breach of the next section, which is professional incompetency.

We will be pursuing legal action next week against Greatway Financial.

Again: DO NOT DEAL WITH GREATWAY FINANCIAL. Please contact me if you have been scammed.
"It is never too late to be what you might have been. "
Deal Addict
Oct 23, 2017
1980 posts
1473 upvotes
GTA West
VESTEGAARD wrote: Well 6 years in Canada, I'm not sure but that doesn't sound like a new immigrant to me. Sure, you need to be careful when buying financial products but waving the 'new immigrant' label seems unnecessary. At one point anyone of us will have to take responsibility of their actions. Are you an immigrant as well, or a Canadian citizen?
Filipinos can be in Canada for 10 years and still act like new immigrants if they immerse themselves in their own community and get most of their information from their friends. It is in their culture to depend on connections and personal networks for services and information. Being from the same town or province or having the same dialect already creates a powerful connection between Filipinos that can be exploited. So they are very vulnerable to schemes like this, MLM's, vacuum cleaner sales and what have you.

They also love status and the allure of becoming a "financial advisor" is compelling. Whenever I attend a Filipino social gathering, there are often friends of friends peddling things like Mary Kay and yes, financial products. I haven't seen the "cooking demonstrations" to sell overpriced pots and pans for a while though.

Of course, it is not just Filipinos but these are problems typical of every struggling immigrant group looking for income and a place in this society. My parents were immigrants from Europe in the 1950's and got caught in some things as well - inappropriate insurance policies on the kids sold by a countryman, a work at home scheme where they lost money, buying overpriced goods door-to-door, etc. All legal but deceptive, and unwise, purchases.

We meet a lot of recent immigrants through our church and when I befriend anyone I try to explain to them that they need to read the local paper and watch the local news, not the foreign channels they get from back home. That will make them aware of the scams and pitfalls people fall into in this country. They especially need to learn to never buy over the phone and at the door. I tell them that when they have questions about immigration matters or the Canada Labour Code, to go the government web sites for information and call those 800 numbers, and not to depend on advice from friends in these matters.

I know a recent-immigrant lady who buys RRSP's based on advice from her "financial adviser", her countryman at her local bank. It is a bad way for her to build a nest egg, since she is in a very low tax bracket and hardly pays any taxes at all, so she can't get any meaningful tax credit from her contribution. I have told her a couple of times to contribute to a TFSA instead, and not to start an RRSP until she can get a meaningful tax credit. But it all goes over her head - advice from a countryman with a financial advisor title seems better to her.
[OP]
Member
Jan 31, 2008
479 posts
172 upvotes
Summerstown, ON
This company had their agent in Toronto send me threatening letters, informing me they will sue me for defamation for leaving this post online.

My response? Bring it on. Such a lawsuit would be dismissed with an anti-SLAPP motion in Ontario. Trying to silence legitimate and truthful criticism about unethical tactics employed.

A quick search online shows multiple others have fallen prey and exposed Greatway Financial's unethical tactics when pushing Insured Retirement Plans.

We asked the company's agent last week, to inform us how an Insured Retirement Plan is beneficial to a minimum wage employee who had no savings, no TFSA/RRSP or net worth.

Their response? Nadda. But they found time to threaten to sue me.

I have little faith in the company to address my spouses complaint. We know she wasn't the only min. wage Filipino worker to sign up to their IRP and won't be the last.

Nonetheless, their "VP" assured us they will resolve this by March 11, 2020 or provide us with an explanation why they cannot address it by then.
"It is never too late to be what you might have been. "
Deal Addict
Oct 23, 2017
1980 posts
1473 upvotes
GTA West
I assume that the "surrender charges" quoted have a lot to do with commissions that would have been paid out to the individual "financial advisor" over time.

I would try to negotiate a waiver or reduction of the surrender charges, based on misrepresentation by the seller, and move on. Look at it as a lesson learned, and put the money into an investment vehicle suited to her current life situation. Your circumstances will determine if the two of you need other life insurance, and there will be cheaper options than what you have within the IRP now. And of course, many employer benefit plans have a life insurance component.
[OP]
Member
Jan 31, 2008
479 posts
172 upvotes
Summerstown, ON
Dealmaker1945 wrote: I assume that the "surrender charges" quoted have a lot to do with commissions that would have been paid out to the individual "financial advisor" over time.

I would try to negotiate a waiver or reduction of the surrender charges, based on misrepresentation by the seller, and move on. Look at it as a lesson learned, and put the money into an investment vehicle suited to her current life situation. Your circumstances will determine if the two of you need other life insurance, and there will be cheaper options than what you have within the IRP now. And of course, many employer benefit plans have a life insurance component.
Totally agree, she will learn from this mistake and move on. She did this as a new immigrant to Canada and was sold this plan literally over a Tim Horton's food counter after arriving from the Philippines.

I cling to the belief that no ethical in-compliance company would permit minimum wage food workers without savings to sign up to an Insured Retirement Plan.

It's for that reason I am very cynical of Greatway Financial's intent to ethically resolve my spouses complaint; according to her, other fellow workers in similar circumstances also signed up to the same ploy.

If Greatway corrects what their adviser did to my wife, it could open up a flood of others who want retribution from the company.

Based on what I read online, the Insured Retirement Plan is a huge driver of business and they suggest in their seminars that an IRP is a superior product to TFSA/RRSPs.

I suppose they seek to place the onus on its advisers who take the $400 life insurance course if hell breaks loose and complaints start coming in?

They have time to threaten people with legal action [for complaining about 100% truth] instead of factually replying to the complaint.

Financial company's are under scrutiny in Canada, we have an advanced financial system and we will be making sure Greatway Financial does not get away with what they did to my spouse.
"It is never too late to be what you might have been. "
Sr. Member
May 5, 2006
797 posts
251 upvotes
I wish you luck in following this through. Shady MLMs and financial 'advisors' should all go DIAF. I'm so tired of deciding whether to bite my tongue or warn off neighbors.
Sr. Member
Jan 16, 2010
565 posts
120 upvotes
Hi OP,

I'm sorry for your experience. Greatway Financial was started by someone who came from World Financial Group (WFG), which is a larger and similar Multi-Level Marketing company that peddles insurance and other financial products. The problem, and why you'll have trouble getting justice, is the term "financial advisor" is only regulated in Quebec. Anyone can use that term otherwise, and there's no legal fiduciary duty to act in their client's interest or sell them the right product.

Folks who say they are "financial advisors" in this case are just licensed insurance sales people, who get commissions for either selling products (whether you need it or not), or usually more lucratively, recruiting others to be "advisors" themselves to make commissions from their recruits' sales. WFG is very popular in Filipino and East-Indian communities, and Greatway Financial is very Filipino targeted. They prey on people new to the country and with low financial literacy, and exploit the nature of social networks within immigrant communities.

The solution around provinces regulating the financial advisor term is a decade long unsolved problem that isn't just affecting these MLM companies. Until the provinces (besides Quebec) start regulating advice and introduce a fiduciary duty in that regulation (that can be legally challenged), there is little recourse. I would suggest only taking financial advice from a Certified Financial Planner (CFP), as that certification body enforces a code of ethics for its members and it's the largest one in Canada.

I would write to your MLA/local Provincial Finance Minister and encourage them to make this a priority whichever province you live in.

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