Free Lunch Seminars: Questions to Ask a Financial Professional

Investors frequently get invited to lunch seminars that promise to educate them about investing strategies or managing money in retirement—often with an expensive meal provided at no cost.  Just because someone buys you breakfast, lunch or dinner doesn't mean you have to buy what they are saying—or selling.

Invitations to Free Lunch Seminars can be tempting. But before you accept, consider these key strategies.

Key strategies can be employed to counter persuasion techniques and distinguish potentially good from inappropriate offers or investments.  AARP and the Financial Industry Regulatory Authority (FINRA) recommend that you:

Take your time.  Promise yourself before the seminar that you will not purchase anything or open an account on the spot.  Be aware that the presentation could be a "soft sell" and a "harder sell" could follow in a phone call or an in-home visit. 

Consider asking these questions:

• What are the risks of this investment?
• How much does it cost initially to purchase the investment?
• What, if any, additional or ongoing costs will I have to pay?
• How liquid is this investment? If I need to sell or cash in the investment, how readily can I do so?
• Will my investment be tied up? If so, for how long?
• What happens if I decide to sell or cash in my investment? Are there surrender charges or other fees?
• For what type of investor is this investment a good idea? For what type of investor is this investment a bad idea?
• Is the investment registered? If so, with which regulator?
• Will they give it to you in writing? 

If the speaker can't or won't answer your questions to your satisfaction, the investment is not right for you.

Do Your Homework

• Check out the sellers with your state securities regulator. You can find that number in the government section of your local phone book or by contacting the North American Securities Administrators Association at (202) 737-0900.
• Is the investment registered?  You can find out whether a product is registered with the Securities and Exchange Commission (SEC) by using the EDGAR database. Also call your state securities regulator to find out what they know about the company that issues the investment.
• What are the risks? While the prospect of high rates of return might sound tempting, remember that there may be additional risks or costs associated with the product.

The bottom line is that savvy investors will not be rushed.  You have worked too hard for your money—consider carefully where and how you will invest it.  While a free meal or prize might be enticing, there are unbiased, noncommercial places to go for information about investing, including regulators such as the SEC, FINRA and state securities regulators as well as the AARP Web site.

If a Problem Occurs

If you believe you have been defrauded or treated unfairly by a securities professional or firm, send a written complaint to:

            FINRA Complaints and Tips
            9509 Key West Ave.
            Rockville, Md.  20850
            Fax: (866) 397-3290