Is Thrivent Financial A Scam or Pyramid Scheme?

Is Thrivent Financial Legit, a pyramid scheme, or any other type of scam? 

You might be wondering after you’ve encountered one of their financial advisors.

In this post, I’m going to share with you my finding after reviewing Thrivent. 

Over the last few years, I’ve seen a lot of people mention Thrivent but the opinion about it were about it being the best thing that ever happened to them or it being a scam.

This motivated me to take a look at all of this and see for myself since it’s been a while since I have had so many people having opinions about it at both extremes.

Some even called it nothing more than a pyramid scheme. 

So if you’re just as curious about Thrivent and if I’d recommend it as a solid opportunity for earning money keep reading.

Let’s get into it!

What is Thrivent?

Thrivent is a company that provides people with financial advice by selling educational products and services. 

Thrivent is a Fortune 500 company based on Christian values and targets mostly Christians. The reason for this stems from their origins. 

In 1899, Albert Voecks, a member of St. Paul Lutheran Church in Appleton, Wisconsin, suggested creating an insurance society for Lutherans to fellow church members Gottlieb Ziegler and William Zuehlke.

They started the insurance society in 1902 by all putting in $13 and finding +400 people that all invested $5 and called it The Aid Association for Lutherans.

This association was meant to be a tool to support each other in all sorts of endeavors.

In 1962 they merged with the Lutheran Brotherhood and formed what we know now as Thrivent an organization that has raised more than $80 million to help churches and other people in need.

How does Thrivent work?

Thrivent is a company that distributes financial products. Instead of directly selling it to consumers they have chosen to use the MLM model which gives you the choice to earn money by:

• Selling services (products and giving advice) for a commission
• Recruiting people to earn bonuses.

They never mention words like multi-level marketing but when you go through their documents and you come across sentences such as commission being earned based on personal volume, total volume, and team performance it’s a dead giveaway.

What is MLM?

MLM (a.k.a network marketing or direct selling) stands for multi-level marketing.

According to Wikipedia, multi-level marketing is a marketing strategy for selling products or services where the revenue is derived from a non-salaried workforce.

As a part of this workforce, you sell the products from the company, and/or recruit people to do the same thing. This group of people you recruit will work under you and is referred to as your downline.

The bigger your downline is the more money you can earn passively (technically speaking) because you’re getting paid a percentage based on the performance of your downline.

This also means the person that recruited you, your upline, is making money based on your performance.

The act of recruiting turns an MLM company into a pyramid-shaped organization where the first people to join make the most and are on the top of the pyramid and those last to enter are at the bottom.

Source: Wikipedia

MLMs have been around for a long time. There are Multi-level marketing companies active today that were founded in the 1950s. MLM has much in common with pyramid schemes, so scammers often use MLM to disguise their pyramid schemes.

Is it absolutely necessary to recruit people? No.

You can also stick to just selling products you can order at wholesale price and re-sell to make a profit. This is easier said than done for multiple reasons, so most members try to recruit others to earn more money.

What services does Thrivent provide?

Thrivent offers people products, memberships, and consults that help with financial planning. They’ve decided their services into 4 categories:

Advice services
Ongoing and one-time advice services.
Insurance
Providing lifetime, disability, and long-term care insurance.
Investments
Helping with investments, mutual funds, managed accounts, and brokerage accounts.
Annuities
Thrivent offers annuities to secure earnings even in retirement.

Is Thrivent an MLM company?

At first sight, I didn’t think this was an MLM until I took a look at their compensation plan in which they explain to potential buyers how their financial advisors might receive compensation for providing them with services.

They have an independent workforce that receives commissions for their purchases and dependent on what type of affiliate they are they can earn residual income on multiple levels by creating a team in the short and long term. 

If that doesn’t sound like a multi-level marketing company I don’t know what does.

The conflict of interest in Thrivent

You might’ve noticed something strange about Thrivent while reading this review. 

Financial professionals are giving financial advice while getting compensated for selling Thrivent products. 

What prevents them from suggesting people buy “crappy” products so they can earn money instead of products from non-affiliated companies?

Thrivent addresses this in their compensation plan and states they’ve policies and procedures that prevent that from happening. I haven’t come across what type of procedures and policies they’re but I’ll add it to this post when I find it.

They also claim they solve this conflict of interest by thoroughly reviewing their products. 

The problem with this is if you no nothing about financial planning you’re basically at the mercy of the Thrivent financial advisor.

The risks of investing in Thrivent

Just like any business, entering Thrivent and becoming a financial advisor comes with a few risks that you have to take into account. There does seem to 

The risk of losing money 

As a member, you won’t escape purchasing their products, especially as an independent financial professional. 

I have come across this model multiple times and in most cases, it’s hard to break even let alone earn a profit.

The risk of losing relationships

The first people in this business model you are encouraged to approach is your personal circle. 

I have seen this put a strain on a lot of relationships. In most cases, these were MLMs that provided non-financial services and products so I can imagine the effects potentially being even worse with these types of services.

A loss of time

To truly succeed with this type of business model, you’d have to invest a lot of time into it. That’s time that could be spent on opportunities that might have a higher chance of succeeding.

Is Thrivent a pyramid scheme?

To answer this question we need to know what a pyramid scheme is.

What is a pyramid scheme?

A pyramid scheme is a type of scam where people are promised money for joining the scheme and recruiting other people instead of selling products and services. 

No selling of a product or service is involved whatsoever.

So you might be wondering where the money comes from.

The people that join are expected to pay a one-time or a monthly fee and in exchange for that, they get a percentage of the fee of everyone they recruit after.

The remaining money goes to the creators at the top of the pyramid.

The problem with this model is from a mathematical standpoint it’s impossible for everyone to make money because you simply run out of people.

Take a look at this picture below showing how it’s impossible for everyone to earn money.

Source: Wikipedia

As you can see, in this pyramid model it’s required to recruit 6 people. You’ll notice from the 12th level and further, it’s not possible anymore for everyone to earn money.

The 2.2 Billion people on the 12th level need 13.1 billion recruits in total for them all to make money which is more people than there are currently on Earth.

At the point that people can’t be recruited anymore, the pyramid collapses because not enough money is coming in to pay members and sustain the pyramid.

Looking at the description of what a pyramid scheme is, Thrivent can’t be classified as a pyramid scheme from a legal perspective. Thrivent has given people a method to make money without recruiting people.

That being said, there are pyramid schemes that disguise themselves as MLM companies because MLMs also use a pyramid structure but sell products and services. 

John M. Taylor the writer of the case (for and) against multi-level marketing schemes calls these “product-based” pyramid schemes and argues these are even worse than their predecessor.

These pyramid schemes offer products that are almost impossible to sell with the goal of pushing you to recruit people because you supposedly can get higher commissions.

I don’t think Thrivent falls under this category but the absence of vital information to objectively be able to make a conclusion worries me.

Based on the information given to the general public I can’t recommend joining Thrivent at the moment.

Thrivent Alternative

There are in my opinion too many question marks when it comes to Thrivent. 

This is why I suggest to those that want more clarity an alternative.

It is called affiliate marketing. 

It’s the method I use to earn most of the money I earn online.

How do you earn money with affiliate marketing?

You don’t have to sell products or services, you don’t deal with monthly quotas, and you don’t have to recruit friends, family, etc.

The only thing you’ll be doing is referring people online to merchant websites such as Amazon, Walmart, and eBay. 

When people buy something based on your recommendation you’ll get a percentage of the purchase.

My #1 recommendation for learning affiliate marketing is an affiliate marketing training platform with more than 1.5 million members. 

Memberships are basically an all-in-1 package that comes with expert-level training, resources, and support from a community of people doing the same thing. 

Want to learn more? Take a look at my comprehensive review of the affiliate marketing platform.

Do you have any experience with MLM or Avon let me know in the comments!

That’s all for today. 

See you in my next post!

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