In 2007 a study was conducted by three agencies* that wanted to look at senior investment opportunities, as seniors were becoming the targets of more focused marketing attempts. The study conducted examinations of broker-dealers, investment advisers and other financial services firms that offer so-called free lunch sales seminars. The study reviewed advertisements, sales literature, customer transactions, policies and procedures.
What they found was that, even though the events were marketed as workshops or seminars, they were designed to sell. And about half of the examinations found instances of deceptive or exaggerated claims.
Free lunch seminars are common. And we have heard from many seniors who show interest in attending one or more in an effort to learn about investment opportunities. Your BBB recommends going in prepared and leaving informed. Here’s how:
BE WARY OF:
- Guarantees of high returns at no risk
- Ads for the event use scare tactics, like stating You are a target!
- Lack of transparency
- A request for account numbers and personal information
- Recommendations that you use equity from your home to purchase securities
- Statements that there are no commission fees
- Additional incentives are offered, like free gifts, if you sign up on the spot
WHAT TO DO:
- Before the event, find out who is sponsoring the event and check them by calling the North American Securities Administrators Association at 202-737-0900 or the Financial Industry Regulatory Authority at 800-289-9999.
- Recognize that these are sales seminars, not educational events.
- Know that if it sounds too-good-to-be true, it probably is.
- If the representative fails to answer your questions to your satisfaction, reconsider.
- Talk to a trusted investment advisor before signing on.
- Avoid inviting a representative to your home. Meet at their office if you wish to discuss the opportunity with them.
Lastly, you can help agencies monitor these activities by taking along an AARP checklist and submitting it to their Free Lunch Monitor Program, which aims to help older Americans avoid being scammed out of their investments. (These checklists are shared with regulators who collaborate for this purpose.)