Beware of retirement planning seminars and workshops that come with a free meal or masqueraded as an educational event at your local community college or university!

Beware of retirement planning seminars and workshops that come with a free meal or masqueraded as an educational event at your local community college or university!

Retirement planning seminars and workshops invitations arrive in your mailbox for dinner at one of the expensive or not so expensive restaurants in town and it comes with a side order of retirement planning advice or it’s an invitation for an educational event at the local college charging a nominal fee of $49.00 or less – Do you go or pass?
Here are some of the promises made within the invitation:

  • Investing in today’s market conditions without losing principal or increasing risk
  • Strategies on converting your qualified retirement accounts like 401(k) and pensions to avoid being overtaxed on your retirement income…resulting in higher income
  • Transfer the risk of potential financial losses before or during retirement
  • Strategies for maximizing Social Security benefits
  • What financial strategies can you implement now to help safeguard your financial investments from a potential market downturn

And the list could go on and on – however you get the idea!

How do these sessions work?

These events are a marketing tool for licensed insurance agents, licensed FINRA registered representatives and/or State or SEC registered investment advisor representatives looking to sell you insurance products like annuities, life insurance, long term care insurance, etc. and/or these licensed individuals are looking for asset under management from your retirement accounts that they can convince you to transfer to their custodian so they can charge you an annual fee or sell you security products for a commission.

The cost to the salesman “financial advisor” to host these events are between $5,000 – $8,000 per event which includes the invitation mailing, reservation service you call, facility rental fees, food cost, curriculum material, etc. So needless to say these individuals – salesman “financial advisor” – have a significant investment they must recover through the sale of insurance and security products. Sounds like a potential conflict of interest to me – what do you think?

Remember: there’s no such thing as a free lunch.

The Appointment after the Event:

You have now met with the salesman “financial advisor” after the event and you have been charmed and you really like the person. They move in for the close and recommend you put your money into an account that guarantees 5-8% growth each year and you can never loss any money. STOP and SLOW DOWN. This is when you should get a second opinion. Remember there is no free dinner.

You would be better served to pay someone a fee for advice based on your unique situation. Simply put, spending $500-$750 for a written retirement plan which will give you a road map outlining exactly what would be prudent for you and your loved ones. Obviously by paying an investment professional that has a fiduciary obligation to you -the chances of you receiving a recommendation that has a conflict of interest is reduced substantially.

A call I recently received in my office:

A gentlemen age 73 called and wanted some advice. He attended a free dinner investment seminar that he learned about from a mailing received in his mailbox. He decided to attend and after the event was approached by the salesman “financial advisor” for an appointment. During the appointment the salesman “financial advisor” recommended the gentlemen age 73 put all his money – $440,000 into an account (Fixed Index Annuity) guaranteeing 8% growth with no risk of losing his money.

What the salesman “financial advisor” failed to disclose – is that the annuity contract was a 20 year contract with surrender charges and the 8% guaranteed growth was an income rider with a fee of 0.60 annually and the only way to get the accumulated 8% growth out of the contract was by activating the income rider creating an income payout for the life of the contract owner.

When the 73 year old gentlemen called my office he was looking for a way to unravel the deal – however it was too late, since he had already owned the contract for about three years. The bottom line regarding this situation – the 73 year old gentlemen should have sought a second opinion before moving forward.

Do yourself a hug favor and remember if you do attend one of these events go with the understanding that you’re only going for the learning benefit. Before you decide to commit to any product purchase or transferring of your hard earned money, make sure you first pay a professional for a written plan that will specifically outline what’s in your best interest not what’s in the best interest of the salesman “financial advisor” that’s attempting to recover his or her cost in the free dinner event they have hosted.

A great place to start educating yourself is by reading the book Retirement Boom and if you’re looking for a second opinion contact Jeff Carter.

No Comments

Post A Comment