I had to come back to this thread. I thought I still had a transcript of the KRI that we had prepared to propose exiting a multi-layer marketing (MLM) business, for a Bank in Nepal. It was not QNet. I think many of our fellow brethren fell for GoldQuest. Although I think Government went after them, it was still too late for some.

Anyways, tricky are those MLM businesses that are not entirely illegal. They market their products as a crevice for a subscription or membership based service. One can argue Sam's Club, Costco, Planet Fitness, Augusta National Gulf Club all sell services of varying kind to their members based on subscription or inclusion. But there is inherent or perceived value / utility to those membership. MLM use that to their benefit but suffer from 'market saturation' existing in a binary tree model (pyramid models). So say, xyz company sells grocery items to their MLM subscribers. The network marketing concept is embedded in the binary tree subscription model (a pyramid structure) to sell their products. So say a generic fluoride toothpaste that costs $2 at a Giant Eagle would cost $4.5 at xyz company. The extra money, that is $2.5 in this example, is surplus value that can be considered funneling through the pyramid model. The problem is that it is not illegal for me to sell you a toothpaste for $4.5 when although both you and I know that you could have purchased a rival toothpaste for only $2. That's where PFA Life Insurance type of MLM or Network Marketing companies play with layperson like us. If you want to buy a Life Insurance Annuity, an Indexed Fund, a Mutual Fund you can easily go to Vanguard, Charles Schwab, State Farm, New York Life, AAA Life, Merrill Lynch to name a few. Yes there are red herring prospectus that you'd read before investing. Any financial product would have inherent risk, even the PFA Life Insurance guys would make you read the fine prints but at the very end. The trick is to lure you through emotional marketing gimmicks like 'stand in your own feet', 'live the life you desire', 'be financially free', 'earn $4500 per week from home just clicking Facebook likes' etc. Which is why the most vulnerable (here in US) are the minorities and people from communities where median incomes are very low. But not necessarily the only ones, just statistically speaking. (Another off track information: observe how States that market their Lottery products exclusively target minority communities, 'Hey You Never Know'). In Nepal my parents and relatives are more at risk with another Dhukuti, another Ponzi, another GoldQuest; the only way to mitigate this risk is through spreading financial awareness (but I am not totally sure).

So short story long, if I want to buy an indexed fund, why should I pay an extra $250 subscription fee and then a pricey load fee to these PFA guys for the same red herring risk carried by any other indexed fund (refer Vanguard). If I want to buy a life insurance annuity, why shouldn't I shop with a lower cost State Farm, New York Life, AAA Life etc.

Adios amigo.

Reference:
http://www.vandruff.com/mlm.html

http://www.ripoffreport.com/r/Premier-Financial-Alliance-And-WLG/Rockville-Maryland-20850/Premier-Financial-Alliance-And-WLG-Avoid-At-All-COST-Rockville-Maryland-290714#comment_3

http://www.marketwatch.com/story/13-reasons-index-mutual-funds-and-etfs-rule-2013-07-24

http://www.investopedia.com/university/indexes/

http://www.forbes.com/sites/donaldfrazier/2012/10/24/selling-a-better-life/

https://legalreferencer.wordpress.com/tag/referral-marketing/

http://www.investopedia.com/ask/answers/09/insurance-company-bankrupt.asp