Maybe you’ve had a similar conversation.
While listening you hear, “I got a flier in the mail inviting us to a free lunch where we can hear how to get a guaranteed X% return on our portfolio.”
I also remember hearing the wisdom from my family elders how “There is no such thing as a free lunch.”
How quickly this wisdom transforms with an attractive enough offer attached.
Free Lunches Getting a Closer Look
People feel special when they are invited to an “exclusive free” meal by an investment company.
These invitations normally have words like “guarantee” & “safety’ thrown in to entice senior citizens to an offer that just can’t be missed. So much so they remind you there are limited seats available. Take a look at a few samples in this SEC report on pages 29-42 .
InvestmentNews recently published an article describing how the SEC has now found a “strong correlation” between free lunch seminars and selling high commission based products.
After conducting more than 100 examinations of the free-meal seminars, the SEC, FINRA and state regulators are now cracking down on fraudulent selling practices being used. Half of these cases , found exaggerated claims in the offers being pitched.
One of the newer concerns for regulators are the embellished credentials used by presenters. Letters symbolizing retirement income specialist among others are used to build credibility with attendees. But the SEC has discovered the more elaborate the designation, the more problems arise with the people using them.
Fighting Elderly Free Lunch Fraud
If you are a senior or know someone in your family who attends these type of meetings, make sure the potential for dishonest sales practices is understood.
Like my grandma always said, “There is no such thing as a free lunch.”