Military Money Manual, a financial blog and website that actively markets credit cards and other financial products to service members, has published a review of First Command that contains false and misleading statements about our business model and the Advisors who serve our clients.
While we respect the rights of others to express their opinions about our company, we are concerned about the negative effects of spreading incorrect information. Misrepresentations generate unfounded doubts about our ethical standards and commitment to serving clients, and they unfairly impact our reputation in the military community. For this reason we seek to set the record straight by sharing nine reasons why you can feel confident doing business with First Command.
1. We put the interests of our clients ahead of own.
We are proud of our long-term commitment to the fiduciary standard, which means always putting clients’ interests first when providing investment advice and related financial recommendations. We deliver the full measure of our knowledge, skills and judgment in the service and best interests of our clients.
In the spring of 2005, we registered with the U.S. Securities and Exchange Commission as a Registered Investment Adviser (RIA)* and required all our Financial Advisors to become Investment Adviser Representatives. The RIA designation is vitally important because it requires the practitioner to provide a higher standard of care and achieve a higher level of professionalism than that required of mere salespeople.
We assert our commitment to the fiduciary standard in our Code of Ethics, which applies to everyone at First Command. The first and most important standard of conduct stated in our Code of Ethics is “We put the interests of our clients ahead of our own interests.”
We continuously monitor our company policies and actions to ensure they reflect a culture of compliance and a fiduciary standard of conduct. First Command Financial Advisors focus on coaching clients to become financially disciplined and confident in their pursuit of financial security. We are committed to a client-first culture that reflects the highest ethical standards and best practices of the financial services industry.
2. Our life insurance recommendations are not focused on any particular type of product, but rather on the long-term needs of our clients.
We object to the accusation by Military Money Manual that we sell “high fee investment and ‘whole life insurance’ products.” In fact, we do not focus on the sale of whole life insurance or any specific type of financial product. Rather, we coach our clients to become financially disciplined and confident in their pursuit of financial security by addressing the spectrum of financial issues they face.
How do we handle life insurance? We start by thoroughly assessing client needs, assets and any coverage already in place — including existing coverage through Servicemembers’ Group Life Insurance (SGLI). Then, if any gaps exist, we will propose a solution.
We recommend term life insurance as a cost-effective option that provides coverage for a set number of years. It can be used to cover temporary needs, like paying for a child’s college tuition or making mortgage payments. Permanent insurance products (like whole life) offer lifetime protection. We recommend this type of insurance to cover permanent needs, like final expenses or providing income to help support a family. In addition to term and whole life insurance, we offer universal life, indexed universal life and variable universal life. This approach is key to our commitment to follow the highest ethical standards and best practices of the financial services industry.
Regarding fees — we offer products and services at competitive market rates. We are completely open and transparent about the expenses associated with the products and services we offer. No expenses are hidden from our clients or the public.
3. We promote the great value of the Thrift Savings Plan to our clients as part of our lifetime financial planning approach.
Military Money Manual has made a false contrast between working with First Command and investing in the TSP. This is not an either/or proposition. Our clients are ardent users of the TSP. We recognize that TSP is a powerful retirement savings tool at a low cost. We coach our clients participating in the Blended Retirement System (BRS) to contribute a minimum of 5 percent to the TSP to ensure that they will receive the maximum possible matching contribution.
In addition, we coach our clients to make the right investment choices within the TSP. Many service members put their dollars in the G Fund, a government securities fund which offers protection from loss of principal but delivers returns that may be below the rate of inflation. While the G Fund may look like a haven from stock market losses in the near term, it may not deliver enough growth for service member families to meet all of their retirement wants and needs. Our Advisors help military families concentrate on investments best suited for building personal wealth, and that typically means a broad participation in the stock market. Of course, all of our recommendations are tailored to our clients’ specific goals and needs.
The TSP plays a key role in our efforts to help clients:
- Start saving early
- Build assets throughout their working years
- Move from asset accumulation to retirement income generation
Notably, TSP participation rates for First Command clients are higher than for the overall active duty military market. And we recommend the TSP even though we earn no fees or commissions from it. Why do we do it? Again, because we put the interests of our clients ahead of our own.
4. We recommend the financial products that are right for our clients.
We work with a number of trusted, leading investment and insurance companies to deliver the best products for our clients. We do not offer any proprietary First Command-branded mutual funds. We recommend carefully selected investment and insurance products from major financial companies. Our independence from any single product or service provider means we can advocate on behalf of our clients and recommend investment and insurance solutions that are right for their unique circumstances. Our investment partners must continuously meet our closely-monitored performance standards. To address the unique needs of active duty service members, we’ve worked with our insurance partners to offer:
- Competitive rates for clients in hazardous occupations, such as combat pilots and special forces.
- Policies for clients who have already received deployment orders to a hot spot or war zone.
- Product options that do not include war clauses or other restrictions that can prevent payment of death benefits due to an act of war or terrorism.
5. We offer products and services at competitive market rates, and we waive financial planning fees for our active duty clients.
We are completely open and transparent about the expenses associated with the products and services we offer. No expenses are hidden from our clients or the public. Visit our Disclosures page and check out the Regulation Best Interest Disclosure, Brokerage Fee Schedule and other related documents.
The mutual funds we offer pay us similar market-rate commissions and fees that the fund companies pay to other broker-dealers. We also offer an asset management program and various banking products, and we make a point of setting fees that are competitive with – and sometimes lower than — those assessed by other firms in our industry.
One area where our expenses look very different from our competitors is financial planning. We waive financial planning fees for our active duty clients. That’s a valuable offering. Industry fees for a basic financial plan typically start at about $1,000 and may include continuing costs and renewals. We choose to waive these fees so that the cost of the financial plan is not an impediment to military families getting started as early as possible on their path to pursuing financial security. In 2020, First Command Financial Advisors produced more than 28,000 complimentary financial plans, most for service members and their families.
Our financial plans include recommendations for various products and services. While these recommendations will vary based on the unique needs of the client, we typically recommend paying down debt; setting up an emergency fund (typically through a savings account at a bank or similar institution); making regular investments for retirement in the Thrift Savings Plan; investing for long-term goals in various diversified investment products; and buying insurance to protect loved ones from financial risk. Our clients pay commissions or fees only on the products and services they decide to buy.
At times we have waived certain fees due to a financial crisis or challenge. During the government shutdowns in 2013 and 2018-2019, we offered zero-interest payroll advances and other forms of assistance to help our eligible banking clients deal with financial hardships. In January 2019 we partnered with Coast Guard Mutual Assistance to offer interest-free loans to Coast Guard members and their families. At the start of the COVID outbreak, we quickly rolled out a financial relief package to ensure that our clients had ready access to the funds they may need to weather this storm. That program includes reduced-rate loans, payment relief assistance, penalty-free early CD withdrawals and other offerings. Visit our bank relief program page to learn more.
6. Military families want and benefit from professional financial coaching.
Since 1958, we have been helping military families develop positive financial behaviors in their pursuit of long-term financial goals. Third-party research has consistently revealed that military families who work with a financial advisor save more and feel more confident about their financial future than their colleagues who go it alone. Career military families who work with a financial advisor report a higher monthly savings rate and more accumulated assets than those without an advisor. This research is not specific to First Command clients but represents the broad experiences of those in pay grades E-5 and above. You can read more about that research on our Advisor Difference page.
7. Our Advisors have a genuine desire to earn and keep the trust of our Nation’s military families by serving them in a meaningful way.
Four out of five First Command Financial Advisors come from the ranks of veterans and military spouses. They join our company because they are inspired to serve those who serve. They are committed to staying connected to the military community in a way that adds value to the lives of service members and their families by helping them pursue their financial objectives and goals. Read what our Advisors have to say about why they serve military families and our clients at:
8. We have a client-centered culture we’ll put up against anybody.
You can still find online content relating to First Command's 2004 settlement with regulators and a related class action lawsuit. A lot has changed at First Command since then. We are proud of our efforts to embrace the best practices of the financial planning industry and make sure that our commitment to clients is never again called into question.
We have done everything that anybody could expect of us. As noted above, we are fiduciaries, and today we have a client-centered culture we’ll put up against anybody.
But don’t take our word for it. Read what our clients have to say about our services in the client stories on our Reviews and Ratings page.
9. We support causes that matter to military families.
First Command actively supports organizations and programs that are important to the well-being of military families. Our commitment goes beyond a typical sponsorship of financial support.
The men and women of First Command are active in their local military communities, working side by side on programs that matter. In 2020, our Advisors and employees donated more than 25,000 hours of their time to military and other charitable causes.
In 2020, our charitable gifts and hands-on assistance benefited:
- United Way of Tarrant County by raising more than $110,000 in donations through the 2020 Spirit of Giving campaign at First Command.
- Project Sanctuary by sponsoring 22 retreats for at-risk military families across the country. Also, we served as the primary sponsor of their San Diego Destination Weekend.
- The four military service academies through major sponsorships of their athletic programs.
- Veterans and military spouses seeking career opportunities through First Command’s participation in more than 100 virtual military and military spouse career fairs. First Command received the 2020 Hiring Our Heroes Military Spouse Employment and Mentoring Award.
- First Command Educational Foundation, a separate 501(c)(3) charity that provides financial readiness education and college scholarships for service members and their families.
We may be a medium-sized company, but we are proud that our philanthropy is on a “big company” proportion. Although our business structure gives us no tax benefit from charitable contributions, last year we contributed more than 7 percent of company profits to military sponsorships and charities.
Ready to get your finances squared away or your second career launched?
Begin your pursuit of financial security today by speaking with a Financial Advisor. Or, learn more about how you can make a difference in the lives of service members while staying connected to the military community. Visit our Get Started page to learn more.