Northwestern Mutual former, current workers criticize company

Northwestern Mutual is facing scrutiny over how it recruits and treats its employees after an article published in The Guardian claims they were misled about what working as an advisor entails.

The Guardian, a Britain-based newspaper, reported speaking with 21 current and former Northwestern Mutual employees, as well as five people who interviewed with the company but did not accept a job.

Some feel “dazzled” by promises of financial security and describe the culture as “bigoted.”

One of the main sources for the story is Jeremy Biar, a senior at Texas A&M University, who initially interned at the company before being hired full time.

“You don’t make money and you don’t have the means to live. You either accumulate debt or you live with your parents,” Biar said. “You become a stoic human being. You really have to choose your career in the Northwest over the friendships you had.”

A spokesperson for Milwaukee-based Northwestern Mutual told the Guardian:

“Our job is not always easy, because it requires a lot of work, courage and perseverance. Of course, it is not for everyone.”

But for those with “vision, drive and an entrepreneurial spirit,” it can pay off, the company said.

Salespeople receive “award-winning training” and 94% say the internship “helped them grow personally and professionally,” according to an internal survey.

Northwestern Mutual provided similar responses to the Milwaukee Journal Sentinel when asked to comment on the story.

Here are some of the points reported by The Guardian:

Target of 40 calls per day

The Guardian reports seeing documents showing that counselors’ goal is 40 calls to “friends, cousins, former roommates, teammates, anyone who might respond.”

Biar said he was told to leave 20 missed calls at a time, so it seemed “urgent.” When someone finally picked up, there was a script to follow: a joyful announcement of their new role, followed by an invitation to meet and discuss their financial future.

“As part of developing a successful practice, building relationships and identifying strong, quality referrals is critical to building a client base,” a Northwestern Mutual spokesperson told the Journal Sentinel.

“Financial services is a relationship business, and we encourage interns and new financial representatives to start with their natural market of known contacts to discuss their careers and have the opportunity to expand their network through referrals,” the company said.

A current Northwestern advisor told the Guardian that the company used students and recent graduates to obtain leads.

“It collects immense data without paying for it,” the source said.

Whole life insurance sold to those who may not need it

The Guardian reported that 20 sources said they should always recommend whole life insurance, even to young people without dependents. These policies serve as investment vehicles while providing death benefits.

It seemed like “a brainwashing tactic for the young and naive,” one source said.

Michael Denning said he was convinced to buy a whole life insurance policy from a college friend.

“I really trusted him as a person, and so I agreed to do it,” Denning told the Guardian.

But a year later, he was struggling to pay the premiums, so he consulted a financial advisor, who recommended he drop the policy. Denning said he lost about $2,400.

“It was really painful knowing that I had lost what little money I was saving,” Denning said.

High turnover, high salary promise

Northwestern Mutual told the Guardian that about half of full-time advisors drop out after the first year.

However, 19 Guardian sources estimated that the majority had left the party before then. Three advisors indicated that the turnover rate was above 90%.

A Guardian source identified as “Megan” said she had received a projection from the company indicating her annual income could reach $120,000 by the age of 24 – and $1 million by 32.

“What we are reporting is representative of the average earnings of financial advisors who meet career expectations,” a Northwestern spokesperson told the Guardian.

The average first-year salary is $61,000, but advisors can also earn “stipends and bonuses,” the spokesperson said.

This article originally appeared in the Milwaukee Journal Sentinel: Report: Current and former Northwestern Mutual workers criticize company.