Your gut tells you there is more to a financial adviser’s dinner seminar than just conversation and food – what do they want from you?
What an offer you received in the mail – “tickets” to a free gourmet meal and an educational workshop where nothing will be sold. The invitation uses nice stationary, pretty graphics, and a smiling adviser’s picture. It could also be the third one you got this week if you live in an attractive zip code with an attractive home value.
Seminar firms send me offers to use their invitations filled with “hot button phrases”, and I hear stories from attendees. The value to a product salesperson is obvious: $5,000 in mailing costs and dinner is recouped by the sale of one $100k annuity or the managing of $500k in assets. (You can learn more about how these firms describe you and target you by checking out this one and this one.) What about the benefit to you, the consumer?
There is the free meal (just don’t go for that reason only, lest you be labeled a “plate licker“). You will hear some information about why your current financial approach is dangerously inadequate. You will receive an offer to meet with the adviser to try and “fix” your situation. In some cases you may even get high pressure tactics that remind you of the purchase of your last car.
I do not recommend attendance at one of these functions, but if you decide to go, keep in mind:
- It is not a debate but a sales presentation. Information will be presented in a way that favors the product(s) pitched. If you are not emotionally disturbed by fear or greed, you are much less likely to take the adviser’s advice;
- NEVER commit to anything that night. Making a decision when your emotions run high is rarely advised. Learn more about the product, the adviser, and the risks involved (that were left in the small fine print on the last slide of the night). Get a second opinion, preferably from a fee-only adviser with no financial incentive to sell you the product; and
- You are free to leave. If there are any high pressure tactics or if you feel uncomfortable for any reason, LEAVE. You have no obligation to stay even if they offer you a book or something of nominal value.
To learn more about the downside of these presentations, you can read articles from AARP and the Chicago Tribune, and regulator warnings like this one from the North American Securities Administrators Association (NASAA).