Four out of five investors age 60 and over received at least one invitation to a free investment seminar in the past three years, according to AARP. The invitations promise to educate potential investors about strategies to manage money in retirement, usually with an elaborate meal provided at no cost. These seminars are advertised with catchy yet deceptive names such as “Seniors Financial Survival Seminar” and entice potential attendees by offering “free advice by experts” on how to secure your retirement, plan your estate or offer financial planning advice. These free seminar advertisements will typically imply there is limited seating or require you to make a reservation to attend. Investors concerned about recently declining 401(k) balances may be particularly susceptible given the severity of the market conditions: a group, sadly, that has probably grown to be quite sizable of late.

A recent year-long examination of free-lunch seminars conducted jointly by state securities regulators, the Securities and Exchange Commission (SEC), and the Financial Industry Regulatory Authority found that many free-meal financial seminars were advertised as educational or workshops, but most were sales presentations (100 percent), featured exaggerated or misleading advertising claims (50 percent), and involved possibly unsuitable recommendations to attendees (25 percent). “Rather than talk about the thought process of retirement planning, they focus purely on the detailed products,” warns Jean Setzfand, the director of financial security at AARP. “[Attendees] may fall prey to an aggressive sales pitch.” AARP and the North American Securities Administrators Association recently developed a straightforward checklist for consumers to bring to free investment seminars to assure that the products and promoters adhere to securities laws and regulations.

An excerpt from the U.S. Securities and Exchange Commission’s joint report:

SEC Chairman Christopher Cox said, “These findings are a wake-up call for securities regulators, the financial services industry and especially older investors. Not only were virtually all of the ‘free lunch’ seminars sales jobs in disguise, but half made misleading or exaggerated claims, and more than a third had unsuitable recommendations or outright fraud. The SEC and our fellow regulators intend to put a stop to this. We will step in whenever false claims are being made. We will sanction crooks who try to feast on the life savings of older investors. And we will work with every honest securities firm to help them do more to ensure that their interactions with older investors fully comply with the securities laws. I applaud the securities examiners whose collective work has clearly shown that there’s no such thing as a free lunch.”

This is one free meal I think would be better off missed. Readers?

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