How To Understand First Command Settlement

For people in the military, taking care of their assets is one of the most important things they can do, especially for their family. When people in the armed forces go on their tours of duty, there is a possibility that they may not be coming back. However, as noble a cause as this might be, there will always be some worry, especially with regard to their families' financial well-being. For this need, securities investors and investment advisers may help our soldiers, sailors, and pilots on how they can make a profit as they go on their tours of duty.

One company for this is First Command Financial Planning Incorporated or FCFPI. FCFPI was founded in 1958 for professional military families, though they have branched out to federal employees as well. Boasting $17.4 billion in banking assets, FCFPI is one of the largest investment broker-dealers that deal with the professional military. They also have a First Automotive, First Funds and an Air Force command bank for those who want loans for cars, general loans, and a bank for soldiers and pilots in the Air Force.

  1. First Command's Systematic Investment Plan. A Systematic Investment Plan, or SIP, can be likened to a normal bank deposit account. However, one pays a certain amount monthly and instead of it being a personal reservoir of money, it becomes a mutual fund. This fund is then used to buy stocks on the stock market or put in a hedge fund. First Command's Systematic Investment Plan was launched on January 31, 2000 and ran until December 31, 2004. However, they did omit several things when they asked people to sign up, like in the Military Thrift Savings Plan, the 50% commission agents get and a clause that stipulated it was irrevocable for 15 years.
  2. McPhail et al. vs FCFPI Lt. Michael McPhail and others filed a lawsuit against FCFPI with the Securities and Exchange Commission regarding what they claimed were "costly" fees. An example of this was the 50% commission. An easy example of this is if a professional military family paid $100 per month annually to the hedge fund, $600 would be defaulted as a commission by the agent and FCFPI. In light of this, First Command Financial Planning Incorporated agreed to a settlement of $8 million. However, investment analysts and several watchdog groups believe that FCFPI could have been levied more by the SEC since their computations would put FCFPI's profit at $140 million.

  3. Settlement. On March 30, 2009, the United States District Court of California approved the settlement of $8 million to those that filed for inclusion within 45 days of owning the SIP. Distribution Checks were sent after the Fairness Hearing to those who wished themselves included in the Class Suit. However, those who paid less than 50% in commissions will be excluded from the class suit.

First Command is now back in business, however, with this blemish on their portfolio. Their philanthropic work and other charitable institutions may have swayed favor to them, however, we urge you to look well into the fine print of any investment you may push through with. After all, your portfolio may not recover. If you wish to contact First Command, their website is at, where you can register in their military command login area.


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