There’s No Such Thing as a Free Lunch
~ By Gerald Rome, Colorado Securities Commissioner ~
Have you received an invitation or seen an ad offering you a free lunch or dinner at a nice restaurant if you attend a seminar about financial, retirement, or estate planning? If you are like me, you have. I get them all the time. And it always seems they are at nice restaurants, places where I would like to eat. And best of all, I don’t have to pay for it! Sounds like a no-lose situation, doesn’t it.
But know this – when regulators examined firms that offered free lunch seminars, they found that every seminar was a sales presentation.
These salespersons reach out to middle-aged and older adults or host free meal seminars with a goal of selling you something you may or may not need. According to a 2013 survey, 64 percent of people age 40 and older had been offered a free meal and “educational” information for an investment, and nearly one-third attended. The invitations may state that nothing will be sold, and only advice will be offered, but as part of the event, you’ll be strongly pushed to buy something, or at least to set up a future appointment.
These “free” meal seminars aren’t free – you’ll be asked for your contact information (so they can keep bothering you after the event) and know you’re going to get the strong sales pitch. They are good at what they do. You need to protect yourself, so if you decide to go for the free meal, here are suggestions to help.
Before you go:
- Be skeptical about “free meal” seminars. The lure of free meals, door prizes, raffles is to get you to attend something you otherwise might avoid. Often additional pressure will be applied, stressing the urgency to register due to “limited space.” A nice restaurant, an expensive meal, and a well-dressed presenter may be impressive, but it doesn’t mean that what they’re selling is right for you.
- Do your homework. Before you attend a seminar or meet with an insurance, financial or retirement expert, verify that the person is licensed to sell the products. You can check licenses disciplinary history on DORA’s website, and can always call us if you are having trouble and need assistance.
- Review credentials closely. Individuals offering these “free” seminars may advertise their credentials to gain the trust of clients. But some credentials may be more hype than a sign of expertise in financial matters. Some credentials require a difficult study program and a series of extensive exams. Other credentials require much less. In the worst cases, just paying a fee could earn certain credentials.
If you go:
- Keep this thought at the top of your mind – does this product or service make sense for you? Always be sure you understand what’s being sold. Insurance and financial products are complicated. Ask questions, especially if you don’t understand something. A good test: Can you explain the product in your own words to someone, other than the salesperson, in a way that makes sense?
- Never, ever make a final decision at a seminar. If you attend a seminar, you will be exposed to high pressure tactics with frightening stories about people who don’t have enough money to live in retirement, and promises of unrealistic financial returns. Decide before you go that you won’t give out any personal information, sign any documents, or make any decisions while you’re there.
- Report suspected scams. If something feels like a scam, please report it to us by calling (303) 894-2320. Anyone can find themselves the victim of a financial scam so don’t let fear, embarrassment, or uncertainty keep you from asking for help. Your report will help prevent others from becoming victims too.