Free Dinner Seminar – No Sales Pressure, RSVP Now!
Jay says, “Buyer beware, dinner may cost you $20,000 or more”
How many times do you receive an invitation in the mail to a free dinner meal at a nice restaurant compliments of some financial services company? They have enticing language:
* Attractive Returns, No Stock Market Risk
* Eliminate Taxes on Your Social Security
* Guarantee Your Retirement Income
* Protect Your Assets
Sounds exciting! You get a free meal out of it and can even bring friends. What a deal! What could possibly go wrong in this situation?
It’s usually not the presentation or the food. It usually happens in the free consultation that comes from the seminar. Like the time share presentations – nothing is FREE. There is a product to be sold… and you may be the victim.
How you become a victim, you may ask. It comes in the form of a product sale. In most cases it is likely to be an annuity of some sort (fixed or index) sold not by a fully (securities and insurance) licensed professional, but rather a simple one-size-fits-all insurance annuity salesperson who doesn’t even understand the stock market, mutual funds, or investment advisory accounts. This person may be a one trick pony that has a one size fits all solution for your financial situation.
Contemplate this: A person only needs a simple, basic insurance license and no knowledge, training, or experience to sell you a product. It happens every day. I hear horror stories from around the country of people being sold inappropriate and unsuitable investments.
Time and time again I see salespeople who are not fully licensed financial planners selling products with outrageous commissions to unsuspecting seniors and other investors. These annuity products often have high commission rates, and longer surrender periods with high penalty fees.
Many fixed and index annuities offer salespersons commission rate in the neighborhood of 8% to 12% of the money invested! This means, for every $100,000 you invest into this annuity, there is an $8,000 to $12,000 commission being generated. Now you know how these companies afford to offer FREE dinners! Maybe they are not so free.
Let’s say you purchase one of these enticing annuities and change your mind a year or two down the road. How much do you pay to get out of the annuity? You may pay as much as a 20% surrender penalty to get out of the $100,000 investment you made into one of these annuities. This may mean $20,000 in penalties. You are left with only $80,000. I have also seen these “surrender penalty” may take 10 or even 20 YEARS before they are eliminated!
Now, don’t get me wrong. There are good seminars (notable ones) and often there are honest, caring advisors presenting them. My point is to know who is delivering the presentation and what they represent. Always look for an advisor who offers comprehensive financial planning and not just product sales.
Before you accept an invitation to any financial seminar, check out the firm, advisor, and financial approach used by the company hosting the event. Otherwise, you could end up spending $20,000 (or more) for your dinner that night.