Thinking of taking position on and not sure of what to expect...

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dragonwalker in Woodland Hills, California

17 months ago

Ok,

So I graduated about 2 years ago from a good college but I now work at a large national bank as a personal banker; handling mostly new accounts, personal, business, application for HELOCs, unsecured loans/lines, credit, refer mortgage, etc. It's mostly a sales position and I've been looking to expand my horizons.

I posted a resume online and a few insurance companies like New York Life and Mass Mutual and some smaller companies contacted me about becoming an agent. I had done some research on these positions before and they are basically all commissioned based, no benefits, and a lot of independent work.

I'm not ready to make that kind of commitment full time as I feel that I don't really have an established network of people I know since moving away for college and needing some stability of a job that has a base salary plus commissions. My pay at work is modest, base about mid 30s and including bonuses and commissions it's about 50K.

I've been approached by representatives of a company called TransAmerica that are owned by a larger parent company AEGON. They explained that I could work part time as a referring agent. Essentially, I would send them referrals from my clients that I can't help. People who are interested in investments with less than 100K, mortgages that we can't refinance, debt consolidation that we can't handle, insurance or some securities needs. I would essentially refer to someone who will share opportunities with them and get split commissions if anything results.

The only costs I'm aware of are $150 to the company for training materials and online course and $150 for a life insurance license so I can technically be on the books for payroll. I'm just trying to get my feet wet in this and I'm not looking for a huge payout yet but maybe some supplemental income, I'd be happy if I could make 5-10K a year...continued below...

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dragonwalker in Woodland Hills, California

17 months ago

One of my concerns however is that HR at my bank has said that this would present a conflict of interest but I need to speak to them again since when I first talked to them I had the idea of needing separate time commitments that might conflict with work but now I'm really just someone who will refer business and nothing else.

Another concern is that this might be some type of scam but I don't think so since there are very low upfront costs and minimal commitment. However it seems like there whole strategy revolves around one person getting more people who in tern get others and the guy who started it all gets a cut from everything...so I'm just 1 cog in the whole thing except I have some built in connections from my position.

Does this idea sound feasible? Problems with it? Thanks.

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Wealth Manager in Livermore, California

17 months ago

Hi Dragonwalker,

I'm almost 99% sure that your employer will have an issue with this arrangement. Although you may technically be referring business that the bank itself cannot service they will be concerned about the potential liability if something goes wrong. Imagine someone comes in with 50K and you refer them over to AEGON. Now let's assume that the referred client loses a bunch of money. Client then says his investments were not suitable for his risk tolerance and files a lawsuit.

Aegon gets named, you get named because you received compensation for referring over the client and then the bank gets named because you are an employee of the bank and the client assumed that since you were acting as a representative of the bank that it was the actual bank that was referring him over to Aegon.

Sounds silly I know but believe me it has happened. My recommendation is that you either get another job in financial services that pays better or consider part time work (while keeping your current job) that is in no way connected to anything financial.

Hope that helps-wm

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