Pac Life Suspends Sales of 79 Plans

Did you read last week’s newsletter titled: DOL Regs. Make Insurance Agents and Series 7 Licensed Advisors Fiduciaries? If not, click on the following link:

Pac Life Suspends Sales of Section 79 Plans

I just confirmed that Pacific Life Insurance suspended all sales of their “Section 79 Plan.”

Why are sales being suspended? I don’t have a definitive or “on the record” reason, but I’ve been told that the reason is IRS related.

Section 79 Plans are not worth Implementing regardless of any current IRS issues.

I’ve been warning about Section 79 Plans for several years. From a pure financial standpoint, I do not believe these plans are worth implementing. In fact, I was so disgusted with how these plans are sold that I created a consumer protection web-site (see which discusses in detail why I don’t like these plans). Keep in mind there is more than one company that sells Section 79 Plans.

Too much greed-even though I’ve been warning about these plans for years, hundreds of agents continue to sell them. Why? Greed. Section 79 Plans pay some of the biggest commissions in the industry.

Clients are the losers–as is typically the case, if clients who have these plans get audited and if the IRS wins the audits or if most clients give in to avoid the costs and consequences of what could be a failed defense, they will lose.

Section 79 Plan EIUL policies are traditionally designed to not be very good from a cash accumulation standpoint. They are designed that way in order to “maximize the deduction.” I can’t imagine anyone buying a Section 79 EIUL policy unless they were getting a 30-40% deduction when buying it.

The consequence of negative audits is that clients are going to be stuck with not very good EIUL polices that essentially will have been funded with non-deductible dollars.

The moral of the story? Don’t sell programs that sound too good to be true. Don’t sell programs that are not in a client’s best interest. Finally, when I say I’ve researched a topic and that it is one I don’t recommend, consider taking my recommendation no matter how much money you could make.

Growing your sales–one reason advisors sell Section 79 Plans is because they sound unique and beneficial. It’s an attention grabber and can help them get new clients.

The one question I’ve been getting asked more lately is what’s the “best” marketing platform? I hate to say that it’s not any of the unique marketing tools I offer through

The best marketing platform in the industry can be found at The POM Planning platform will not only help you grow your business, but it will help keep you out of compliance troubles.

If you can’t pick up millions in AUM using a platform with the following metrics, you can’t sell.

Why POM Planning? It is a low drawdown risk/tactically managed platform made up of 13 terrific managers.

-The top three “conservative” strategies have an average Beta of .24* (the S&P has a Beta of 1.00). The average annual return for their top three “low-risk” managers going back seven years is 9.19%* net of fees (truly incredibly for “low-risk” strategies).

-The top three “moderate-risk” strategies have a Beta of .296.* The average annual return for their top three “moderate-risk” managers going back seven years is 15.29%* net of fees* (again truly incredible for “moderate-risk” strategies).

*Click on the following link to download a summary of the annual returns and risk metrics (like Beta) of POM Planning’s 13 tactically managed strategies: Past performance is no guarantee of future results. Investing is risky and investors can and do lose money.

Copyright 2015

Webinar Thursday, May 21st  1 pm EST ”
College Funding-How to Utilize IUL as a College Savings Vehicle 

                For several years uneducated advisors have been listening to IMOs tout the virtue of using cash value life (IUL) as a college funding vehicle.  In the majority of fact patterns, using IUL to fund for college is a sure fire loser. In this webinar the speakers will explain why that is the case.

The webinar will also cover and explain the fact patterns where IUL can work as a legitimate college funding/retirement vehicle for clients. If you’ve been pitched the idea of using IUL as a college funding vehicle (or if you are actively selling IUL as a college funding vehicle), this is a webinar you’ll want to attend.

Why Become a Certified Medicaid Planner™ (CMP™)Webinar May 18th at 2:00 pm EST.

                There are only 10,000 people turning 65 every day in America. It would make only too much sense to learn a topic that can be used to help many of these potential clients. The CMP™ is the ONLY indepenantly accredited designation of its kind. To learn more, click on the following link to sign up for our informational webinar:

The content of this newsletter is NOT for public use and should not be used without prior written consent of The Wealth Preservation Institute.

Roccy DeFrancesco, JD, CWPP™, CAPP™, CMP™
Founder, The Wealth Preservation Institute
144 Grand Blvd
Benton Harbor, MI 49022