I haven't thought about First Command in a long time, and for that I'm really happy. Before I go any further - DISCLAIMER - I'm just one person who enjoys personal finance and investing, I'm not an expert, and this is my personal opinion. My true motivation for writing a few lines here is that I'm hoping at least a few Midshipmen at USNA who are looking to explore financial planning options either before or after they receive their career starter loans STAY AWAY from First Command.
These guys, if they are even allowed on navy installations these days, will be lining up at the door to help you invest your loan, and whatever other money you might have stashed away. They'll offer up some handouts, say that they specialize in military financial planning (whatever that means...money is money and a dumb idea is a dumb idea), give you the basics on money, investing, what compound interest over time can do for your personal wealth, and probably invite you to some sort of investor reception. At least that's how it worked a few years ago.
These guys have had to change their company name more than once because the SEC was on to them. Hopefully that sets off alarm bells. My personal advice - stay away, and tell your friends to stay away. Tell the entire graduating class to stay away, because a lot of these guys are retired military officers who try to dupe Middies and Ensigns into horrific financial plans at a time when they're the most vulnerable.
To cut right to it, first and foremost, these guys are insurance salesmen. What they really want to do is sell life insurance to young people at a time in your life when you LEAST require it, especially if you're a single (you'll have SGLI in the fleet, a cheap, generous policy available to the entire US Military.) They do this because it's a vehicle by which they collect massive fees. Then they'll take a chunk of your money and probably invest it in a mutual fund...NOT a highly-acclaimed no-load fund with a proven track record, but one with a hefty fee (known as a "loaded" fund), which they again get a cut of. I'm not trying to make this sound dramatic - read the other reviews across various cities and you'll see lots more reviews just like this one.
As an Ensign, before I got wise to their game, I can remember arbitrarily writing checks every few months for hundreds of dollars because I was paying for their insurance and wanted to keep my "plan" on track. After I did some homework, I visited their Pensacola office to pitch a few investment ideas and discuss the idea of beefing up my actual investments (more mutual funds, ones without fees, and a money market fund) and downsizing the amount of insurance I was buying (single, no kids, at least ten years of military service ahead of me...why did I have multiple life insurance policies?) The dude I met with was some ex O-4 NFO (at the time that seemed impressive to me) who basically called me a silly Ensign, tried to strong-arm me and told me "you're either on our plan, or you're not." Looking back, this firm lured me in with their sense of "military values," exploited that to make a quick buck by selling me the financial equivalent a crappy used car, and then threaten to cease working with me when I didn't agree with their plan for MY money. Sound strange to you? Yeah - it was pretty surreal. Needless to say I moved my money elsewhere at the next available opportunity.
Look, there are plenty of resources for people who "don't have time" to manage their money. All I can say is that you should ALWAYS have time to CARE about your money, so at least do a little bit of research and stay away from the hustlers and the crooks. read more
