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A Free Lunch Invitation: Does It Say What It Means?

So, you've received an invitation to an investment seminar and a free meal. Here's a look at some of the come-ons used to grab your attention.

The invitations claim that you will learn the secret to how you can protect your assets from market losses, eliminate taxes, invest without risk, double or triple your interest and avoid probate fees.  You are told this is your chance to "immediately add $100,000 to your net worth."

You're urged to "call now because seating is limited." But, be sure to bring your spouse.  Most promise that "nothing will be sold," or "there's no cost or obligation" written in bold and underlined for emphasis.

But one thing is for sure, all of these financial seminars are designed to sell you a product or to get you to open a new account.

According to Office of Financial and Insurance Regulation (OFIR) Commissioner Ken Ross, "Seniors attending these seminars are often putting themselves in financial danger. We've found that seniors are often exposed to misrepresentations, high-pressure sales tactics and outright fraud."

These seminars may entice you with free food, drink, golf, entertainment, and door prizes. You'll need to sit through the sales pitch before you can get to the food. If the hard sell does not come during the presentation, it can happen during a follow-up phone call or in-home visit.

View an example of a free lunch seminar invitation that older citizens across the nation receive.

If you attend one of these seminars, experts suggest you:

  • Take your time. If you decide to go, promise yourself that you will NOT purchase or sign anything during the seminar. And don't give out personal financial information. Remember, any truly good investment opportunity will still be there next week.
  • Ask hard questions. During the presentation, ask questions and seek clarifications until you understand the answers. If you still need more information, ask for details in writing or a copy of the prospectus so you can study it on your own.
  • Be cautious. Before you attend the seminars check out the sellers with your state securities or insurance regulator. To find out who your state's securities regulator is, go to the North American Securities Administrators Association's Web site to research investment advisers.

It's also important to find out if these sellers have appropriate licenses or if they have any complaints filed against them. Watch for signs of incorrect information, exaggerated claims, or pressure to make a decision. You can check out insurance agents at the National Association of Insurance Commissioners.

Be especially cautious if they want you to sell your current holdings to purchase a new product that may not be suitable for you.

Schedule any follow-up meeting at their office instead of agreeing to an appointment in your home. They are not being gracious to want to come to your home. They know it's hard to get someone to leave once they are in your living room.

Report any concerns about unrealistic claims or unsuitable investments to your state securities regulator.

Remember there is no such thing as a free lunch.  If you want the free meal, keep in mind that there are usually strings attached. Take your time to get informed from a neutral source so you can make wise decisions about your investments.

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