[NGR] Ackman's presentation on Herbalife: “This isn’t even a pyramid scheme, it’s a pancake scheme.”

not true, but I think you might mean if you own a captive agency/brokerage. In that case, it's still not true.

 

Depending on the Agency/Brokerage, not all are the same. Owners gets paid by commission & end of year incentives based on loss ratio. Captives work with 1 company, independents has many. Owners pay employees, depending on their positions, their pay stucture is different.

Pyramid business model whether sales of products or services. Owner sale and recruit as many as they can, recruits are trained to do the same. 90% will not succeed, 8% will do ok & 2% will do well. This continues & everybody benefits, it's a very effective model but not exactly a scheme, IMO. Theres no real office structure, this is why most Pyramid models are "work from home, at your own time." You get a person train & licensed(paid by the trainee) & send them out to the world, hopefully they atleast sell a few policies whether its health, life, annuities or investments to their friends & families before they realized it's too hard to leave the company. Maybe in the process they will introduce a few friends and family to join.

 

I'm not saying that they are doing anything illegal, Herbalife has been a pyramid ever since inception & they're around for quite a while. You do realize that a lot of companies adopt the pyramid business model. Ever heard of one of the top selling make-up & skincare line Mary Kay or Avon...? All pyramids. Doesn't mean they're illegal.

 

You really are just flat out wrong or are using a very strange definition of pyramid scheme. I practiced insurance law for about 38 years before I retired and had occasion to represent AON and other brokerage firms There is no way that AON is organized the way it appears that Herbalife, Mary Kay, et all are structured. Having corporate subsidiaries DOES NOT make a firm a "pyramid" - at least as that term is being applied to Herbalife.