September 08, 2008


We're all familiar with the saying "There is no such thing as a free lunch." Often, what appears to be 'free' comes at a heavy cost ... ask a lot of college students about their "free T-shirt" or "free pizza." For quite some time, retirement seminars held by financial service companies have commonly offered a free lunch as an incentive to participants while floating their sales pitches. Unfortunately, when national and state regulators examined these "free lunch" seminars in 2006 and 2007, they found that 57% used misleading or exaggerated advertising and sales materials. Guarantees of high returns, risk-free rewards, and confusing products ...

Just as college students become targets of financial predators, so to do seniors. Microtargeting -- a practice that has grown in popularity during the past decade -- uses data gathered from public records, financial and other commercial transactions, and credit reports to identify individuals [that meet their desired target audience] for all types of promotions (i.e., phone, mail, and e-mail). In this case, a list of people that are elderly, living in a single-person household, having a history of opportunity seeking, become a perfect target as they are much more vulnerable to fraudulent marketing ploys.

Free investment seminars are widespread. According to a recent survey by the FINRA Investor Education Foundation, 78% of those polled got at least one invitation to a free investment seminar in the past three years; and nearly 60% got six or more offers. Nearly 25% of all those investors said that they went to at least one seminar during those three years.

Be aware that many very common financial designations - Financial Analyst, Financial Advisor, Financial Consultant, Financial Planner, Investment Consultant or Wealth Manager - are often just generic terms or job titles and may be used by investment professionals who may not hold any "real" designation! Know what the designations mean (see: Some states, (go to: such as Missouri, have established rules to stop securities brokers and investment advisers from using misleading credentials targeted at senior investors. Unfortunately, this list of states is very small (only four - MA, MO, NE, and NH).

- 2007 "Free Lunch" Investment Seminars (Missouri Report)
- Are you Vulerable? Play the Scam Game
- Avoiding the Heartburn from the Free Lunch
- Check the Background of the Investment Professional
- File an Investor Complaint
- Top 10 Threats for Investors: 2008