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The Genex Capital CEO's "Hemmorhoid" on Structured Settlements

by Structured Settlement Watchdog®

Roger Proctor is CEO of Genex Capital in Vancouver. His latest "hemmerhoid" is  4 paragraphs of commentary about the reduction in employee benefits packages offered to employees which he then uses to cast doubt on structured settlements in an egregious over the top effort to get people to cash them in.

Here is an excerpt:

"This national pension elimination has many people wondering what options exist for those employees who devoted years of service with the confident knowledge that a pension would supply them with the necessary financial security to retire?  Unfortunately, there is no precise answer and, ultimately, these individuals are forced to find alternative means of financial support through their retirement years on their own.

Understandably, this national pension minimizing effect has been the impetus causing many recipients of structured settlements to begin to question the security offered in these government backed guaranteed payments.  Given the seemingly overnight disappearance of pension plans, it is not challenging to understand why many structured settlement recipients are responsibly wondering how much longer their promised periodic payments will be maintained.  In all actuality, no one can predict the future, but structured settlements could certainly begin to disappear too.

Underlines added for emphasis

Commentary about "The Bum of All Fears"

FACT: The decision of employers to reduce or eliminate employee benefit offerings has nothing to do with structured settlements.

FACT: In a DB plan, a worker's benefit is determined by his/her work history and the terms of his/her employer's plan, while in a DC plan, a worker's benefit is determined by his/her own and his/her employer's contributions and by the return on invested assets. The worker may take on a greater absorption of market risk with the latter. 

FACT: Pension plans have not disappeared overnight. The shift from defined benefit pension plans to defined contribution pension plans has occurred over a 20 year period (Source: National Bureau of Economic Research)

FACT: A structured settlement is determined by an agreement between settlement parties to a claim or lawsuit.

FACT: The insurers writing structured settlements are among the largest insurers in the United States.

FACT: Many life insurance companies issuing structured settlement annuities, or their parent companies, have been in existence and keeping promises for well over 100 years.

The elimination, reduction or risk shifting of pension plan programs is all the more reason why settling plaintiffs should consider structured settlements

The elimination, reduction or risk shifting of pension plan programs is all the more reason why those with existing structured settlements should avoid selling them except as a last resort.

Factoring companies like Genex Capital should not demean themselves or their industry by making such ridiculous analogies. Surely there are valid reasons to do business, right?  Someone? Anyone?

 

 

 

Critique of the Financial Advice Dispensed by Genex Capital CEO

by Structured Settlement Watchdog®

On June 28, 2009 Roger Proctor, CEO of Genex Capital, offers the following financial advice to structured settlement recipients:

"You may have heard in the media in recent weeks that interest rates have bottomed and are slowly creeping back up.  I (Proctor)believe that this is the beginning of a new cycle of incremental increases in interest rates over the next few years. When interest rates go up, the present value of a person’s structured settlement goes down.  This is a simple truth. As such,if you are considering selling your structured settlement, now is the time to get the best rate".

One of the things missing from Roger Proctor's financial lesson "belly flop" is that we are an environment that is also likely to result in higher tax rates. Higher tax rates will INCREASE the intrinsic value of your existing structured settlement.

Have a look at this Structured Settlement Taxable Equivalent Yield Chart. which will help you compare the higher rate of interest required to equal income tax free structured settlement accumulation at various rates of return and various tax rates.

Postscript Mr. Proctor's "clairvoyance" about interest rates "over the next few years" (from June 2009) did not prove to be the case. Interest rates actually got worse! It would have been a bit of a shame for those who people who succumbed to the fear and sold their payments in 2009 (at a discount hoping that after tax interest rates would be sufficient to cover the discount) when they really did not need to. It's like feeling the need to take on more than a reasonable amount of debt because you have a zero or low interest rate card for 6 months. Even though companies like Mr.Proctor's provide a sometimes valuable service such as when people have no other alternatives to raise cash to meet immediate and pressing needs, the point is that there are many valid reasons to keep structured settlements.

Is There Any Truth To The "Sound Financial Advice" From Genex Capital CEO?

by John Darer

Genex Capital CEO Roger Proctor, offers the following sound bytes in a video ad for the "cash now pusher" company:

1. "Were you 'taken advantage of', 'pressured into' or 'not properly informed' of the "REAL TERMS" of your structured settlement when you signed? "
2. "You shouldn't have to beg, borrow or steal" and you should not have to NEGOTIATE.
3. "What if you could go back and CHANGE that settlement to YOUR terms, to YOUR needs, right now?"
4. "has helped thousands of people, like you, nationwide to "free their money" - to deliver your money that YOU NEED NOW "

While the message from Roger Proctor emphasizes his former membership in the American Association for Justice (nee Association of Trial lawyers of America,  nee American Trial Lawyers Association) he implies that trial lawyers and financial advisors are not doing their job properly and that desperate tort victims are thus resorting to crimes.

What evidence does Roger Proctor have to back up his claims?

Should the trial lawyer community be offended that one of its former members is using his one time affiliation with the association (in his solicitation of the dismantling of the work of trial lawyers) as a reason for tort victims to trust HIM and his company?