No Free Lunch

By: AARP.org | Source: AARP.org | March 2009

Do you receive "Free Lunch Seminar" invitations? Nearly 6 million Americans age 55 and older not only get them, but have also attended them according to a new study released by AARP, entitled Protecting Older Investors: 2009 Free Lunch Seminar Report.  The report reveals that 78% of people who attended did so thinking it was an educational opportunity but instead nearly 40% were asked to buy an investment product.  The report also has interesting findings from the checklists AARP received from hundreds of dedicated Free Lunch Monitor Volunteers, who help make the financial market place safer for all investors.

If you are looking for an exciting volunteer opportunity, you can also become an AARP Volunteer Free Lunch Monitor.

You can get involved by:

• Viewing the 'What to Listen for Checklist,'
• Attending a Free Lunch seminar, filling out the checklist and returning it to us,
• Sending us your invitations by mail or e-mail.

Why get involved?

These “free lunch” seminars are used to attract older adults who are interested in learning how to invest their money for retirement.   Most troubling about some of these seminars is that a year long examination by U.S. Securities and Exchange Commission (SEC), North American Securities Administrators Association (NASAA), and the Financial Industry Regulatory Authority (FINRA) found that 59% of these seminars reflected weak supervisory practices by firms and 23% of the advisers holding the seminars recommended investments that did not appear to be suitable for the client.

The ultimate goals are to recruit new clients and sell products. While some pitches can be easy to swallow, the consequences can be expensive. Consumers may go to the seminar with the expectation of learning how to grow and protect their investments and retirement savings.  During the seminar, however, and in follow-up phone calls or in-home visits individuals may be pressured to make unsuitable investment decisions without having done their homework.

State regulators sit in on presentations as they are able, but with small staffs and a large number of seminars offered daily, their reach is limited.

Ways to Become a Free Lunch Monitor

If you choose to attend a free lunch seminar, consider bringing our checklist along. Use our checklist to help assure that free investment seminars adhere to the guidelines set by financial regulators.

• If you have already decided to attend a free lunch seminar, download the 'What to Listen for Checklist.'
• Attend a seminar you've been invited to attend.

Instructions for the Free Lunch Monitor include:

• Do not announce that you are an AARP Free Lunch Monitor. 
• Do not wear clothing that indicates you are affiliated with AARP.
• Collect all the handouts provided during the presentation.
• During or after the seminar, fill in your observations on the What to Listen for Checklist.

Many seminar sales use a "soft sell" followed by either a phone call or in-house visit where the pressure to purchase— and do so quickly— may occur. We highly discourage inviting individuals you do not know into your home. If you get a phone call as a follow-up to the seminar, we'd like to know if the caller was more aggressive in trying to make a sale than was observed in the seminar. The back of the seminar checklist has space for additional comments.

Thanks in advance for being a Free Lunch Monitor. Let us know how you felt about this volunteer experience, and if you would do it again. Also let your friends know that they too can be Free Lunch Monitors. Using the checklist is a good way to know what to watch and listen for and not be swayed by an exciting sales pitch and a free meal.

If you're not interested in attending any of the seminars, we'd love to have you share your invitations with us.

AARP wants to see what the invitations are saying and who is sending them. The more invitations you send us the better we can work together to assure that investment professionals truly work in the best interest of each investor.