Affinity Business Network Review: Health insurance lacking information
Affinity Business Network provide no information on their website about who owns or runs the business.
The Affinity Business Network website domain (“affinitybn.co.za”) was registered by “affinitybn” on June 6th, 2016.
An address in Gauteng, South Africa is provided, which is presumably where Affinity Business Network is operated from.
Further research reveals Fred Andalaft (right) crediting himself as founder of Affinity Business Network on his LinkedIn profile.
Why this information isn’t provided on the Affinity Business Network website is unclear.
Other than a marketing interview on LinkedIn, there isn’t any information publicly available on Andalaft’s history prior to founding Affinity Business Network.
Presumably Affinity Business Network is Andalaft’s first MLM venture as an executive.
Update 22nd October 2020 – A reader wrote in with a link revealing Fred Andalaft, as “Freddie Andalaft”, has ties to Progressive Investment Trust and related companies.
South Africa’s FSB launched an investigation into Progressive Investment Trust in 2008.
The FSB first became aware of the problems at the companies and the trust when the liquidator of the Fraser Lesotho Pension Fund attempted to withdraw investments from Progressive Asset Management.
When the FSB intervened, Andalaft falsely claimed the money had been repaid. This sparked an FSB investigation, which was expanded to include all the companies and the trust, which are now under curatorship.
And after the investigation started, Andalaft falsely told the consultants of the SA Studbook Provident Fund that the fund could not withdraw its money because of the FSB investigation.
The inspection was completed in February this year. But before the FSB could take action, Andalaft, whom the inspectors said was the “directing will and mind”, had to be given the opportunity to respond.
This is despite the fact that Anderson says that on numerous occasions Andalaft attempted to mislead the investigators and to give them false information.
By the end of May curators had been appointed to take over the Progressive Trust companies.
By the end of 2008 the Progressive Trust companies were ordered into liquidation. Investor losses were pegged at R100 million ($6.1 million USD).
An alaysis by the inspectors revealed that PIT’s trial balance recorded operating losses with no investment growth.
This meant there was a real risk that the only potential source of financing the loss was through investor funds.
I wasn’t able to track any further updates beyond 2018. /end update
Read on for a full review of the Affinity Business Network MLM opportunity.
Affinity Business Network Products
Affinity Business Network operate in the insurance MLM niche. The company claims it offers the ‘fastest growing medical health insurance products in South Africa‘.
According to the Affinity Business Network website, the company itself is
a distributor for the long established Affinity Enterprises and its affiliated partners.
Affinity Health is a leading provider of affordable medical and health insurance products to the South African market.
No specific plan information or prices are provided on the Affinity Health website.
The Affinity Business Network Compensation Plan
Affinity Business Network affiliates are paid on sales of health insurance premiums.
Direct commissions are paid based on the cost of the premium. Residual commissions are paid via a unilevel compensation structure.
MLM Commission Qualification
To qualify and continue to qualify for MLM commissions, an Affinity Business Network affiliate must sell three new insurance policies each month.
Retail and Recruitment Commissions
Affinity Business Network affiliates are paid a percentage commission on insurance premiums paid by recruited affiliates and retail customers.
- 1% is paid if the premium costs up to R10,000 ZAR ($731 USD)
- 2% is paid if the premium costs between R10,001 and R20,000 ZAR ($1462 USD)
- 3% is paid if the premium costs between R20,001 and R30,000 ZAR ($2193 USD)
- 4% is paid if the premium costs between R30,001 and R40,000 ZAR ($2924 USD)
- 5% is paid on premiums costing in excess of R40,000 ZAR
Affinity Business Network pay residual commissions on premiums sold by downline members.
These residual commissions are paid down three levels of recruitment via a unilevel compensation structure.
A unilevel compensation structure places an affiliate at the top of a unilevel team, with every personally recruited affiliate placed directly under them (level 1):
If any level 1 affiliates recruit new affiliates, they are placed on level 2 of the original affiliate’s unilevel team.
If any level 2 affiliates recruit new affiliates, they are placed on level 3 and so on and so forth down a theoretical infinite number of levels.
Affinity Business Network cap base residual commissions at three unilevel team levels as follows:
- level 1 (premiums sold by personally recruited affiliates) – 50% of the first premium payment and 2.5% thereafter
- level 2 – 1.5% of premiums sold
- level 3 – 1% of premiums sold
Team Bonuses allow an Affinity Business Network affiliate to earn beyond their first three unilevel team levels.
To qualify for Team Bonuses, an Affinity Business Network affiliate must qualify at the 1 Star to 5 Star ranks:
- 1 Star – generate 2,000 team points a month for three consecutive months
- 2 Star – generate 4000 team points a month for three consecutive months
- 3 Star – generate 6000 team points a month for three consecutive months
- 4 Star – generate 8000 team points a month for three consecutive months
- 5 Star – generate 10,000 team points a month for three consecutive months
Once initially obtained, affiliate rank qualification is an annual requirement.
The Affinity Business Network compensation plan defines team points as an affiliate’s personal referrals multiplied by premiums paid by downline referrals.
I believe this is an affiliate’s own premium sales (the raw number of premiums sold that month), multiplied by premium volume sold by their downline.
Along with premium prices, point values for Affinity Business Network premiums are not disclosed.
Joining Affinity Business Network
Affinity Business Network affiliate membership costs R295 ZAR ($21.50 USD).
Affinity Business Network provide no specific information on their website about the policies their affiliates market.
This, I believe, is key in evaluating whether or not retail is a focus in the company.
The way the compensation plan is presented, in particular the grouping of retail and personally recruited affiliate premium commissions, suggests that the majority of premium holders through Affinity Business Network are affiliates.
If this is the case, Affinity Business Network would be operating as a pyramid scheme.
The good news is establishing whether this is the case is simple. Just ask your prospective upline how many retail premiums they’ve sold, and compare that to the number of personally recruited affiliates they have with premiums.
With respect to Affinity Business Network’s premiums themselves, the lack of information provided certainly doesn’t make it easy to evaluate them.
From my own experience a big part of choosing an insurance plan is comparing what you’re potentially getting with what else is on offer. Short of listening to a marketing pitch from an affiliate, that’s not possible in Affinity Business Network.
Meanwhile I can go visit their competition and get an estimate for the coverage I need. That’s something that actively works against Affinity Business Network affiliates.
At the end of the day insurance, especially health insurance, is a very personal field. Customization is a big part of that based on need, and to some extent that might explain the lack of information Affinity Business Network provide.
Still, a benchmark would be nice so potential customers at least have some idea of what’s possible through the offered premiums.
Out of curiosity I had a look at the Affinity Health and they offer full plan information with pricing.
Whether or not Affinity Business Network simply mirror these plans however or offer variations is unclear.
Still, if their provider can offer full details about premiums than Affinity Business Network has no excuse.
Approach with caution.