You know one of my favorite expressions is “Nothing’s more expensive in life than free.” I figured I would tackle the dinner seminar topic as a good portion of my time is spent protecting my clients from these scam…I mean, highly interesting “free” events.
Once you approach the Golden Buckeye/AARP target zone of 50 years old you will soon receive lots of exciting invitations in the mail. These wonderful offers are for dinner seminars. I have some time before I hit this “magical” age, however, since we bought our house from a newly retired couple we get lots of their mail. Combine this with what I ask my clients to pass on to me there are certain trends with these seminars.
The most common invitation is for a dinner seminar to be held at a local steak place. Now, you can elect to come to one of these “Complimentary Dinners” and bring a guest. The topic is almost always around how to “save on taxes, reduce risk, maximize wealth, and increase your retirement income.” If you think I’m kidding, I am copying the text from a mailer a client gave me. In my world, this giant description is code for selling a high-commission insurance product that locks you in for years. However, the advisor gets their fat commission which more than offsets the cost of the dinner, which is usually a few grand in total.
Another common dinner theme is to educate you on strategies to maximize your Social Security, how to handle rising medical costs, and once again, how to generate consistent and dependable income you won’t outlive. That final strategy is the giveaway that this seminar host will be pushing annuities your way.
A new style is to offer educational sessions at a local university. Honestly, some of these are better as their goal is to cover a broad range of financial planning topics for soon-to-be-retirees. And, no free dinners are provided. Quite a few of them actually make you pay a nominal fee to attend to cover any handouts you are given. What does catch my attention is when they offer a “free consultation for every attendee.” If what they are offering is free, how valuable is it?
Probably the worst type I’ve come across recently was a Medicaid planning session held at a local nursing home and was co-hosted by an attorney and a “financial advisor.” One of my clients attended this and we had quite the fun conversation about the presentation. The attorney was not an estate planning specialist and would create complex trusts that were wrong. An estate planning attorney I know said he has corrected three of this other attorney’s trusts in the past couple of years. Had they not been corrected the client may have been looking at breaking Medicaid rules. Sadly, it gets no better with the “financial advisor.” A quick internet search revealed the advisor was simply an insurance agent who told people she was a financial advisor. Guess what she sold? Yep, annuities, which were bought by the trust. The goal was to take most of the assets, place them in a trust and have the trust buy annuities. Talk about a hell of a payday for the salesperson!
A bonus one that is not a dinner is the mailer that offers an opportunity for a “52-minute complimentary” meeting, a signed copy of a self-published book (most likely written by a ghostwriter but with the advisor’s name slapped on it) and a $100 gift card to a business of your choice. Again, real life example and how valuable is their time if they are giving it and $100 away for free?
Some quick tips if you get invitations to these events:
- Look up the host on FINRA BrokerCheck. Here you can see if they have any complaints and if they are actually a financial advisor (I have two invitations for “financial planning” events in my possession from people not registered as financial advisors).
- See if there is any language about “financial advisors, CPAs, and attorneys are not welcome.” The Medicaid one I mentioned above said they would be charged an “educational fee of $1,500” for attending. Not sure how they are going to collect, but regardless, there’s a reason they don’t want someone there who could fact check them.
- If you see key words such as “income for life, tax-free withdrawals, protecting yourself from down markets” know you are entering the insurance sales zone. This may be more terrifying than the Twilight Zone.
Now, I’m not saying you should avoid all of these seminars forever. Heck, become a professional plate-licker for all I care (term in my industry). You could probably have a nice steak dinner once a week. However, just remember what the Deacon from The Wire said – “Nothing in the world’s more expensive than free.”