That Free Dinner and Seminar Could Cost You
March 4, 2017
Did you know that there are five seasons not four? They are winter, spring, summer, fall and seminar season. As sure as spring follows winter - for a couple of months after the first of every year the seminar season begins. Some of you don’t know about this because seminar season only affects people who are over 50 years old. I am talking about those free lunch or free dinner seminars put on by brokers or insurance agents. This is the prime time to get people to come to these things because there is not much else going on right after the first of the year.
The people putting on these seminars do it because it works. They need to hide their sales pitch behind some kind of education or scare tactic. Because if they told you to come to a seminar so we can sell you an expensive annuity or investment product of course no one would come. For the last few years the hot seminar topic has been Social Security. It is so hot that sometimes the broker doesn’t even have to offer a free meal to get people to come. They pull you in by telling you that they know a secret for the best way to file for Social Security. The invitation always says “this is not a sales pitch” and you get a free meal! Couldn’t hurt to go, right?
A free meal and information can be very hard for some people to pass up. They may give out some good information that might be useful at these rubber chicken dinners but you need to be aware of the goal. I have talked to people that went to a seminar knowing what it is with the intention of not buying anything and two weeks later they own an annuity and now they regret going. Unfortunately, the average person is not equipped to resist the settle sales tactics during the seminar and the overt pressure the salesperson puts on you later. Once they establish the fact that they know more than you do at the seminar there is a good chance they can get you to buy. You just don’t have the knowledge to say this is not a good deal.
Once the salesperson has your name look out they already know you are concerned about retirement and Social Security that you are not very knowledgeable and that you are over 50. They know what buttons to push to convince you to buy, it’s their job they do it all the time. The information they gave you during the seminar, even though they never mentioned a product, all points to the product they are trying to sell you. They create a problem in the seminar and later offer you a solution.
The people putting on the seminar know that X percentage of the people attending a seminar will buy a very high commission product and that’s why they do it. To them it’s a numbers game. The cost of the meals is worth it because of the profits they will get. It is really a bait and switch. You come to the seminar for some information but there is a good chance you end up with an insurance or investment product.
I am just using Social Security as an example. For instance, in the past if the stock market was doing badly it would be a “earn huge returns without the volatility of the stock market” seminar. They always have a great seminar title as a hook. Whatever people are concerned about there’s the hot seminar topic. It works, that’s’ why they do it. But it’s funny that whatever the current problem is the solution is always the same. Buy whatever product they are selling.
All a seminar presenter has to do is sound credible and scare you a little. They prey on the fact that the average person doesn’t have the knowledge of Social Security and financial products to make an informed decision. They overwhelm you with information and before you know it you are replacing your existing investments with another investment with steep sales commissions.
You have heard the expression there is no free lunch? It implies that there is a cost to everything. A free lunch seminar may end up being a very expensive lunch indeed. Avoid the heartburn of the hard sell and instead of going to a free lunch seminar just go find something fun to do and then go out to eat and pay for your own lunch. It may be the cheapest meal you ever had.
Bill Oldfather is a fee-only financial planner and investment advisor. Oldfather Financial Services is an SEC Registered Investment Advisor based in Kearney NE. Email to firstname.lastname@example.org