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First Command™ is a financial services company that targets servicemembers with military network marketing.
First Command Advisors use military veterans to build trust with current servicemembers. The company then uses that trust to sell high fee investment and “whole life insurance” products to those servicemembers.
I do not have personal experience with First Command's products and services, but I have read numerous stories about the company on Reddit and around the web.
You will most likely be much better off investing in your TSP and Vanguard, Fidelity, or Schwab Roth IRA rather than paying extra in fees for investment products from First Command.
You almost certainly do not need whole life insurance. Usually you will be far better off buying term life insurance and investing the savings in an index fund.
Update on 14 December 2021: I received a trademark infringement notice on 14 Dec 2021 regarding the use of a trademark in a domain. It reads:
This domain is illegally using First Command Financial Services's trademarked name in their domain name. This is causing confusion among our client's customers. Our client First Command Financial Services doesn’t own this domain. We request this domain name be unregistered and removed.Trademark Infringement Notice sent to MilitaryMoneyManual.com on 14 Dec 2021
It appears someone doesn't want the information linked to on this page to rank so high on Google. I do not plan to remove this domain name.
First Command™ Whole Life Insurance
First Command™ whole life insurance is usually an unsuitable product for a young servicemember, especially lieutenants, ensigns, and junior enlisted.
The Servicemembers Group Life Insurance (SGLI) is a good term life insurance product while you are in the service. You get up to $400,000 of coverage for $25 per month, plus Traumatic Brain Injury (TBI) coverage and a $100,000 “death gratuity” in case of your death in the line of duty.
If you have no dependents, you probably do not need any more insurance than SGLI. When you deploy to a combat zone, SGLI is reimbursed. SGLI offers free life insurance when in a combat zone.
What To Do Instead of First Command™
Follow this personal finance flowchart for active duty military. You can do all of this yourself.
If you need help, there are free services on base available to assist you.
Max your Roth TSP. Max your Roth IRA. Max your spouse's Roth IRA. Invest in low cost index funds. Don't buy whole life insurance. Check out my book, for a step by step guide to achieving financial independence in the military.
Advisors Rely on Trust
First Command™ uses their military affiliation and veteran network to build their client database. They use their retired military rank and connections on bases to sell financial services and products to active duty servicemembers and families.
A fiduciary has a legal and ethical requirement to put your best interest before their own. Always ask if your First Command™ advisor is a Certified Financial Planner (CFP), fiduciary, or a registered investment advisor (RIA).
Advisors may receive a commission based on the products they sell. Here's 2 articles from an early 2000s investigation in First Command's™ practices: Taking Aim At Military Scams Kiplinger's and from the Securities and Exchange Commission.
Practices at the company may have changed since 2004.
Alternatives to First Command™
Leaving First Command™
There are many anecdotes of real experiences with First Command™ online. Here's one entitled How to Get Out of the First Command Trap.
The author writes: “I'm leaving First Command as well. This post is incredibly helpful, thank you!”
When I was a young Lt, I was seduced by the dark side (re: First Command) because I wanted to get a head start on my finances. As it turns out, First Command is incredibly predatory (anecdotally, and in my opinion). If you want out, here's how to do it:
- Cancel your whole life insurance. Seemed like a good idea at the time, I know. Call 1-800-658-9857 for Liberty National if that's who it's through. I had luck with the paper form that I found using Google, then faxed it in (go to your AFRC, they probably have one).
- If you have an IRA you want to roll somewhere else, contact that agency and request an in-kind transfer. Vanguard did not require any physical paperwork to accomplish this. If they do require anything, request a 60-day rollover. This means FC will liquidate your IRA into your bank account and you won't have to pay any taxes on it as long as you deposit that amount into an IRA within 60 days. Call Vanguard or whatever new firm you're going with and they can help you.
- Get your money out of those high-fee mutual funds. This part is a little bit more difficult, as most financial institutions require a Medallion Signature to process any transfers. Instead, deal with FC and tell them to give you your money. All you have to do is call your advisor (hopefully you get their secretary) and say you want xyz accounts liquidated into the First Command bank account you probably have set up. If you want to send an email, here's what I sent:
“Good morning xxxxx,
First off, thank you for your advice and work with our accounts over the past couple years. (Spouse) and I are very grateful for your help.
That said, we do want to go in a different direction with our finances. I've started the paperwork to transition our IRA and single registered mutual fund accounts. We have the information for our life insurance accounts, so if there's anything we need to do regarding those, let me know.
I'd also like to transfer the remaining balance of the bank accounts (xxxx and xxxx) to my First Command bank account (xxxx). The current allotment through MyPay will probably run through the end of the month, so I'd like to keep the accounts open long enough for the allotment to go through, then transfer it.
Let me know if there's anything else you need from me in order to move forward.
Once they liquidate your funds, call corporate at 1-888-763-7600, and they'll transfer your money to you. After that, you can invest it wherever you want.
This was all my personal experience, but if you're on the fence about bailing on First Command, please please do some research and/or message me directly and I can help with anything you need. FC is predatory, and there's nothing wrong with admitting to yourself that you were duped. If you have any other tips, please comment and add them!
Reddit Reviews and Experiences
Here is a small sample of the real experiences other military servicemembers have had with First Command™ on Reddit. I could not find one positive review.
Experience with First Command “Stay away from First Command. Stay further away from whole life insurance, it is a waste of money. Research term life insurance and decide if you need it once you’re married.”
Does anyone have experience with First Command? “He's in sales and works on commission. If you want to learn about finances there are plenty of free resources.If you want to make this guy a lot of money than just do everything he says.”
Dumping First Command “Also following, literally in the exact situation. I've discussed it with my advisor and he straight up told me that they only make money by selling people insurance, saying “If we didn't sell insurance to a new lieutenant, we've failed” which to me sounds awfully predatory. I'm in the same boat of wanting to cut ties entirely, but it seems like a huge pain. Let me know how this goes for you!”
Met with a First Command Advisor in Killeen, Texas. “Stay away. You don't need whole life and you don't need mutual funds until you are maxing out your tax-advantaged accounts (TSP, IRAs). As an O-1, this is roughly 50% of your pay, so I doubt you're doing that.”
Cutting Ties with First Command “You're getting hosed.”
Shaking My Head…First Command “Yes, another first command victim…”
I Want to Quit First Command, What Should I Do? “Move your money out of first command asap.”
Another First Command Sucker Alright well as of 24hrs ago I thought I was smart with my finances but after stumbling upon this subreddit and spending some time in here, I've come to the sad and disappointing realization that I've probably lost a lot of potential money over the past few years.
Feeling like a real idiot for using First Command “Long story short, I thought I was doing the responsible thing by using their services. After reading this sub more I realized I made a mistake. What should I do now?”
Leaving First Command – Need Some Help “Trying to leave First Command (finally) after they got me at TBS. Transferring all my money out of their savings and into my main account, trying to liquidate my investments with them, and canceling whole life (yup they got me to buy it).”
I hope this information helps you make an informed decision about whether First Command™ is right for you. Please let me know your experiences with the company, both positive and negative, in the comments.
First Command™ is not a pyramid scheme. You do not need to recruit additional salespeople under you to buy your product as you would in a pyramid scheme or Ponzi scheme.
First Command™ claims on their website to hold all of their advisors to a fiduciary standard in their client relationships. Before doing business with any company, it's important to read real reviews about the company and see if they adhere to the fiduciary standard.
For example, one recommended First Command™ mutual fund is the MFS Growth Fund with ticker MFEGX. MFEGX has a 5.75% front load fee, which means you lose 5.75% of your investments immediately! TSP and most Vanguard index funds have no front load fees. This fund also has a 0.87% expense ratio which is 17x more expensive than a TSP fund or Vanguard Total Stock Market Index Fund (VTI or VTSAX).
First Command is a registered trademark of First Command Financial Services, Inc. Use of the name of the company is allowable under nominative fair use.