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Can you believe these grifters hawking indexed universal life (IUL) insurance on TikTok? Here’s the actions I’m taking to put an end to this predatory nonsense. I encourage all readers to do the same.
Just plain ridiculous
The other day this disgusting video clip from TikTok popped up in my feed.
This guy, Jeff Lerner, was touting this exclusive "secret" of the "wealthiest" – borrowing from an IUL – without providing the full story about the risks.
Gimme a break, bro.
- No talk about interest charges, risk of policy lapsing, surrender charges, nothing.
- Is it true that wealthy people borrow from their cash value life insurance plans? It seems far-fetched they would draw from insurance when they have more liquid resources.
- It’s also very short-term focused. There’s no guidance given about what happens if rates rise (or are collapsing, more likely), or your obligation to maintain the plan over time.
- There are at least five ways you can borrow from an IUL policy, all with different charges, and where the money is drawn from varies case by case. None of this is mentioned here.
And you can see the guy who is reviewing this video – the owner of the “joelopezmindset” channel – is nodding his head agreeing with him!
Now look at this guy in this TikTok video below – he’s saying that an IUL is better than a 401(k) because of its death benefit!
These gimmicky sales pitches are hurting unwitting Americans, and it’s our responsibility to fight back and defend the American family!
Here are some ways.
1. Confront the grifter
The first thing you should do when you see someone making a ridiculous product pitch on social media is to send them a direct message and politely explain why they are wrong. Give them the benefit of the doubt and assume they didn’t know any better.
If they are honest (lol), they’ll admit they were wrong and take down or revise the content. But even if they respect what you say they may block you from seeing what’s in their feed in the future due to embarrassment or lack of desire to be “trolled.”
If that doesn’t work, move to #2 and set them on fire (figuratively).
2. Create response content
The regulators can create laws until the end of the alphabet; the more effective way is for us to actively shut down these grifters by educating the public about why their ideas are bogus. This is not a waste of time because if you publish this the right way you can get a good deal of attention.
Here’s an example.
The Money Guy Show debunks several of the outrageous statements these influencers are making, one by one, giving sound explanations for why the behaviors suggested are harmful to consumers.
If you don’t want to make the video yourself, send the information to me and I’ll publish it on my social media.
3. Advise social media networks to censor this content
Platforms like Twitter, TikTok, LinkedIn, and Instagram should suspend accounts that publish these scammers. If you can get kicked off Twitter for standing up to the woke propaganda, then the IUL hucksters should be censored, too!
When you see a TikToker making outrageous claims in a video, press that report button and rat them out to the platform! If this happens enough times, the platforms will get the hint.
4. Influence regulators
The SEC recently apprehended eight social media influencers who ripped off $100 million in a Ponzi scheme. But “regulation by enforcement” does not work effectively.
There should be legislation that could categorically provide that IUL and crypto are indeed securities, and anyone who gives any type of advice on the internet related to a market-based product should have to register as an investment advisor:
- Social media influencers
- Celebrities and actors paid to push a product
Let the internet celebrities grapple with compliance over paragraphs of disclaimers and a three month wait to get a video approved! If the “good advisors” have to, then so should everyone else! Fair is fair. I’m writing a bill to propose to my senators, the Regulation of Media Influencers (ROMI) act. To support the drafting and have your name included, please reach out to me.
You’re crazy, Grillo, you say?
Sorry – I believe in democracy!
I’ve watched the SEC’s open meetings and the regulators do have our best interests at heart. Why would they take a pay cut to work like crazy? Most of them could be earning millions at a law firm or Goldman Sachs (lol).
I follow them on Twitter and the SEC is apprehending criminals all the time. Like any high-profile agency, you only hear about the times they mess up.
Get rid of the defeated attitude that we live in a dictatorship. At the very least, we should be educating and informing regulators of what is going on by commenting to them.
- Reach out to your local House representative or senator and request a meeting. I am meeting with my senator; some are open to this, and others aren’t. But this is a democracy, and you should keep trying until you find someone who will listen.
- You can report a tip to the SEC if you think the person posting the content is breaking the law.
- You can send activist letters or call your local reps.
Here’s an example of an activist letter. Just copy, paste, and send.
Hello, my name is (your name) and I am calling to urge Senator (name) to require all internet influencers who discuss market-based securities to have to register with their state or federal regulators as an investment advisor. Left unregulated, these influencers are free to make untrue statements that impede the effective formation of capital for many Americans. It undermines trust and competition in our industry. It is imperative that policies be amended to require anyone who discusses market sensitive instruments such as IUL and cryptocurrency on the internet to be required to register as a regulated securities professional.
Enough is enough
I don’t care about any of this woke nonsense. I love my family, my community, and my beautiful America.
I love my country and I’m not willing to sit here and let unconstitutional actors tear it down. So go ahead and kneel at the flag or whatever else you want to do – I’ll be standing proudly with tears in my eyes when they play the national anthem. I’m saying it loud and clear because I couldn’t care less what anyone else says.
As the leaders of financial planning and investment knowledge, we are the soldiers that need to stand up and fight, and our words are the weapons.
I’m asking you all to be an activist:
- Suggest tax reform to the IRS through its taxpayer advocacy service (TAS).
- The SEC has a Federal Register and list of SEC Proposed Rules where you can comment on any proposed regulation. Right now there is an amendment to Regulation NMS that is very relevant.
The situation is only as bad as we let it be. It’s our responsibility to take care of our fellow Americans by influencing those who have the power to create laws to protect them. There are hundreds of thousands of advisors out there and if every single one of us assumed a position of activism these grifters would be shut down.
I’m willing to fight.
If you’re fired up about getting out there in the Wild West of social media, I teach advisors how to use these tools in a variety of ways. The membership is an affordable self-directed option and there are other options here.
I’m organizing a Transparency Movement in our profession.
We meet monthly on the second Wednesday at 1 PM ET. You can sign up for the next meetup here.
Sara Grillo, CFA, is a marketing consultant who helps investment management, financial planning, and RIA firms fight the tendency to scatter meaningless clichés on their prospects and bore them as a result. Prior to launching her own firm, she was a financial advisor.
Joe Lopez Mindset. Pay yourself, not the bank. Get an indexed universal life. #shorts. [Video]. Youtube. https://www.youtube.com/shorts/4EHcGYVmy20
Marvin Bontrager, Ph.D. [@mbontrager5]. (15 Dec, 2022). Telling people to open an IUL instead of doing a 401k with a match because death benefit. [Tweet] Twitter. https://twitter.com/mbontrager5/status/1603529091591946244
Sec.gov. (14 December, 2022). SEC Charges Eight Social Media Influencers in $100 Million Stock Manipulation Scheme Promoted on Discord and Twitter. https://www.sec.gov/news/press-release/2022-221
The Money Guy Show. (10 June, 2022). Financial Advisors React to OUTRAGEOUS Money Advice on TikTok! [Video]. Youtube. https://www.youtube.com/watch?v=TLF8VAcNToE
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