Should I attend an investment seminar after receiving a letter in the mail?
If you are a retiree, there is a good chance you have received in the mail
countless invitations to various investment seminars. These seminars often
promise a free meal, and the opportunity to learn about a new investment,
or ways to manage your retirement account better.
As the old saying goes, “There’s no such thing as a free lunch.”
Just because someone buys you lunch, doesn’t mean you have to buy
into what they are saying – or selling. There is nothing inherently
wrong with a free meal, investors should exercise caution before attending
any type of investment seminar. Remember, someone is offering you a free
meal, not out of the goodness of their heart, but rather as an attempt
to sell you something.
Here are three things you can do to help avoid being sold an investment
that’s not appropriate for you:
Do your homework before the seminar.
A legitimate financial advisor must have a securities license in order
to sell you an investment. You can find out if a person has a securities
license by going to brokercheck.finra.org. At this website, you can also
find out information about the person’s experience, work history,
and whether they have been the subject of any customer or regulatory complaints.
It’s always a good idea to know who you are working with before
you buy an investment.
While you’re at the seminar, ask questions.
Ask as many questions as you want until you are satisfied that you understand
what you are buying. What are the risks? How much does it cost to purchase
the investment? What, if any, additional or ongoing costs will you have
to pay? How liquid is the investment? If you need to sell or cash in the
investment, how easily can you do so? What happens if you decide to sell
the investment? Are there surrender charges or other fees? If the speaker
can’t or won’t answer your questions, or you don’t understand
their answers, then the investment is not right for you.
Do more homework after the event.
Remember, the free meal might be part of a strategy to soften you up.
The hard sell might come later during subsequent phone calls from the
event sponsor. If the investment has a prospectus, ask for a copy. Also,
confirm that the investment has been registered with the SEC or your state’s
securities regulator. With very few exceptions, all investments need to
Some other tips include getting other opinions – perhaps talk to
another financial advisor, or discuss the investment with friends and
family. Keeping these tips in mind before and after you attend a free
lunch seminar can help you avoid some serious heartburn later.