PHP Agency Review: Life insurance & recruitment?
PHP Agency was launched in 2009 and operates in the insurance MLM niche.
The company is based out of Texas and headed up by CEO and Founder, Patrick Bet-David.
As far as I can tell, Bet-David (right) began promoting himself as a financial advisor following a stint at Morgan Stanley Wealth Management.
According to Bet-David’s Wikipedia entry he joined the army after high school.
After leaving the Army he got a job at Morgan Stanley wealth management.
After a dinner event with George Will in 2009, he launched a website called Saving America and later a radio show broadcast in Los Angeles, to encourage people to be entrepreneurial and to educate people about fiscal responsibility.
Later that year he opened a financial services agency offering term and permanent insurance, debt settlements, and 401(k) rollovers into indexed annuities called PHP Agency, which stood for “People Helping People”.
Update 15th October 2018 – As of October 2018 Bet-David’s Wikipedia entry has been deleted. The quoted text above is from the entry prior to deletion. /end update
Bet-David doesn’t appear to have any MLM experience prior to founding PHP Agency.
In addition to PHP Agency Bet-David also runs Valuetainment, a moderately successful YouTube channel.
Read on for a full review of the PHP Agency MLM opportunity.
PHP Agency Products
PHP Agency bills itself as “a national financial services marketing company”.
Services listed on the PHP Agency website include:
- term life insurance
- return-of-premium term life insurance
- indexed universal life insurance
- no-medical exam life insurance and
- fixed indexed annuity
PHP Agency provide brief descriptions of each service however no pricing guidelines are provided.
While not disclosed on its website, “premier carrier partners” cited in PHP Agency marketing material include Foresters Financial, AIG, National Life Group, Nationwide, National Western, American National and Allianz.
Presumably these are the providers of PHP Agency’s advertised services, however there’s zero disclosure on the company website.
The PHP Agency Compensation Plan
PHP Agency affiliates are paid commissions when they sell insurance services.
PHP Agency Affiliate Ranks
There are eleven ranks within the PHP Agency compensation plan.
Along with their respective qualification criteria, they are as follows:
- Trainee – sign up as an affiliate and “complete week 1 of PHP System Flow (costs not disclosed)
- Associate – recruit three affiliates, generate three sales and at least 3000 GV a month
- Field Associate – get an insurance license (cost not disclosed), recruit and maintain at least fifteen affiliates (one Associate), generate fifteen sales and at least 30,000 GV a month
- Director – recruit and maintain at least thirty affiliates (two Field Associates or one Field Associate and two Associates – six of your recruits must also be licensed), generate thirty sales and at least 60,000 GV a month
- Marketing Director – recruit and maintain at least fifty affiliates (three Field Associates or one Director and one Field Associate – fifteen of your recruits must also be licensed and appointed), generate fifty sales and at least 100,000 GV a month
- Senior Marketing Director – recruit and maintain at least one hundred affiliates (two Marketing Directors – sixty of your recruits must be licensed), generate one hundred sales and at least 200,000 GV a month
- Executive Marketing Director – recruit and maintain at least two hundred affiliates (four Marketing Directors – one hundred and twenty of your recruits must be licensed), generate two hundred sales and at least 400,000 GV a month
- Senior Vice President – recruit and maintain at least three hundred affiliates (six Marketing Directors – one hundred and eighty of your recruits must be licensed), generate three hundred sales and at least 600,000 GV a month
- Executive Vice President – recruit and maintain at least four hundred affiliates (eight Marketing Directors – two hundred and forty of your recruits must be licensed), generate four hundred sales and at least 800,000 GV a month
- President’s Council – recruit and maintain at least five hundred affiliates (ten Marketing Directors – three hundred of your recruits must be licensed), generate five hundred sales and at least 1,000,000 GV a month
- Chairman’s Council – recruit and maintain at least six hundred affiliates (twelve Marketing Directors – six hundred of your recruits must be licensed), generate six hundred sales and at least 1,200,000 GV a month
GV stands for “Group Volume” and is sales volume generated by the sale of insurance services by an affiliate and their downline.
Required GV at each rank is capped at 50% derived from any one unilevel team leg.
Note PHP Agency do not disclose affiliate signup, insurance license or appointment costs.
Direct Commission Rates
PHP Agency pay direct commission rates on insurance services sold based on rank:
- Trainees earn 30%
- Associates earn 40%
- Field Associates earn 50%
- Directors earn 60%
- Marketing Directors earn 75%
- Senior Marketing Directors earn 77%
- Executive Marketing Directors earn 78%
- Senior Vice Presidents earn 79%
- Executive Vice Presidents earn 80%
- President’s Council affiliates earn 81%
- Chairman’s Council affiliates earn 82%
Direct Commission Bonus
An additional 40% direct commission is paid out as a bonus.
- recruit 10 affiliates, have had 25 potential applications filled and generate 25,000 GV = 5% bonus
- recruit 25 affiliates, have had 25 potential applications filled and generate 50,000 GV = 10% bonus
- recruit 50 affiliates, have had 50 potential applications filled and generate 100,000 GV = 20% bonus
- recruit 100 affiliates, have had 100 potential applications filled and generate 200,000 GV = 30% bonus
- recruit 150 affiliates, have had 150 potential applications filled and generate 300,000 GV = 40% bonus
Applications are cited as “base applications” in the PHP Agency compensation plan.
No explanation is provided and I’m not entirely sure what an application is referring to.
I’ve gone with affiliates who don’t complete the signup process but it could also refer to insurance service applications.
PHP Agency pay a Generation Bonus 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.
PHP Agency define generations within a unilevel team each time a Marketing Director is found in a unilevel leg.
The first Marketing Director found caps off the first generation, with the second beginning immediately after.
The second Marketing Director caps off the second generation and so on and so forth.
If no second Marketing Director exists in the unilevel leg, the second generation extends down the full length of the leg.
The same is true for higher generations within a leg that are not capped off by a Marketing Director.
Using this generational definition, PHP Agency pay a Generation Bonus on up to seven generations per unilevel leg.
- 10% on the first generation
- 5% on the second generation
- 4% on the third generation
- 3% on the fourth generation
- 1% on the fifth, sixth and seventh generations
PHP Agency affiliates can earn a bonus 5% first generation rate is they have
- 10 personally recruited affiliates
- 25 potential applications filles and
- 25,000 GV a month
Note that generation calculation for each unilevel leg is done independently from the other unilevel legs.
Recognition and Rewards
The PHP Agency compensation plan details a “$100K Ring” and “$50K Watch” under Recognition and Rewards.
No qualification criteria is provided.
Joining PHP Agency
PHP Agency do not disclose affiliate costs on their website or in their marketing material.
I have seen figures of around $600 quoted all up (includes insurance license), however due to a lack of disclosure by PHP Agency this is unconfirmed.
As the founder of a YouTube channel with 700,000+ subscribers, Patrick Bet-David has some sense of the information age we live in. The lack of disclosure to potential affiliates and customers on the PHP Agency website is inexcusable.
It’s 2018 and restriction of information as a marketing strategy is outdated and anti-consumer.
Furthermore it makes it impossible for prospective PHP Agency affiliates to make an informed evaluation of the opportunity, without copping a marketing pitch from someone with a vested financial interest in their participation.
At a very minimum PHP agency needs to be upfront about potential affiliate costs and that of their offered insurance services. Even estimated cost ranges would suffice if actual costs differ geographically within the US.
Moving onto the compensation plan, the primary concern is that PHP Agency affiliates are required to purchase at least one insurance service.
This isn’t disclosed on the PHP Agency website, in their marketing material or compensation plan, but it’s a requirement I saw pop up again and again in my research.
It’s by design that PHP Agency’s required sales at each rank coincides with required affiliate recruits.
If an affiliate has to purchase an insurance service, by default you’re going to have the same number of services sold as affiliates recruited. With that in mind I’m not sure why PHP Agency even bother to differentiate the two.
In addition to being pay to play (never forcing your affiliates to purchase a product or service is a cardinal MLM rule), this casts a big question mark over retail focus within the company.
PHP Agency affiliates have no incentive to focus on retail sales. They get the same financial benefit (more so even), by just focusing on recruiting new affiliates – who are required to purchase an insurance service.
If this is happening company-wide, PHP Agency is operating as a pyramid scheme.
Seemingly in an attempt to defend this, on his own website Patrick Bet-David narrowly defines a pyramid scheme as having no product.
A lot of people say that network marketing and multilevel marketing are pyramid schemes.
And every time somebody says, “pyramid scheme” they sound uneducated, so I’m going to explain it so people understand it and stop using it incorrectly.
In a pyramid scheme, a product doesn’t exist.
This is patently false.
Pretty much every modern pyramid scheme, particularly of the MLM variety, has attached products and/or services.
Significant retail sales is the differentiating factor between a legitimate MLM company and a pyramid scheme – of which there is no mention of in Bet-David’s explanation of MLM and network marketing.
This to me suggests Bet-David has no issue with retail sales being negligible in PHP Agency, even if the FTC might.
One other aspect I found disingenuous was the idea that PHP Agency affiliates could earn a “152% total gross payout”.
Obviously math is math and nobody in PHP Agency is earning 152% of a payable commission.
What should be disclosed is that affiliates receiving over the 100% commission rate are just getting an extra cut of whatever PHP Agency receive from their third-party insurance partners.
This type of misleading “152% commissions” marketing has no place in a legitimate MLM offering.
Speaking of which, the good news establishing whether PHP Agency is operating as a pyramid scheme on a micro level is relatively straight forward.
As a prospective affiliate, you want to find out how many active non-affiliate insurance service subscriptions the person trying to recruit you currently has.
Once provided, you want to compare this with the active number of insurance service subscriptions held under them by recruited affiliates.
What you’re looking for is a pretty even match. If retail subscriptions are dwarfed by affiliate held subscriptions – or worse non-existent, you’re looking at a pyramid scheme.
Take any attempt to dodge the query or outright refusal to provide you with the requested information as an admission of guilt.
Righting the ship would require PHP Agency to offer full public disclosure on their website.
Seeing as the company has no problem enforcing sales quotas, retail service subscriptions would then be introduced at a minimum 1:1 ratio.
Forcing affiliates to purchase subscriptions (either outright or by way of monthly volume quotas) also has to go.
Given PHP Agency has its tenth year of business on the horizon though, I wouldn’t be holding my breath – even with a decent life insurance policy.