||For more information
|Free Lunch Seminars...not an appetizing event
||call the Division at (801) 530-6600
What is a Free Lunch Seminar?
A “Free Lunch Seminar” is a marketing technique financial service companies and other businesses use to solicit new clients. Sponsors often hold these
seminars at hotels or restaurants and may offer enticements such as trips, door prizes, or free meals for those that attend.
While these seminars are often promoted as educational events, their true purpose is to sell various products. At the seminars, participants are
provided with sales information and materials that describe possible investment strategies. Many times attendees are required to provide contact
information. After the seminar, participants receive a solicitation for a “free” consultation aimed at gathering personal financial information.
Free Lunch Seminars advertise through radio, newspaper, and internet ads. Seminars are also offered by invitation in hopes of attracting a particular
type of customer, often seniors.
Concerns with Free Lunch Seminars
The Division sees a multitude of problems with Free Lunch Seminars
- Targeting Seniors
- Many of seminars target senior citizens. These seminars are advertised with names like “Seniors Financial Survival Seminar” or “Senior Financial
Safety Workshop” and offer free advice by experts that specialize in retirement living, financial planning, tax strategies, trusts, inheritance issues,
and legacy planning.
- Unregistered Securities, Unlicensed Agents
- Free Lunch Seminars may sell investment opportunities that require securities registration. Sometimes these seminars pitch unregistered securities.
Aside from the registration issue, individuals who make an offer or sale of a security need to be licensed as broker-dealer agents or issuer-agents.
Investors should use the Division’s online tools to Check Out an Investment Opportunity and Verify Licenses. Investors can also call the Utah Division
of Securities at (801) 530-6600.
- Selling Unsuitable Investment
- Since Free Lunch Seminars are designed to sell, attendees may be sold investments that are not suitable for their financial situation, needs, or
objectives. Ultimately, investors should always evaluate an investment before investing. Again, investors can use the Division’s online tools to Check
Out an Investment Opportunity. Investors can also call the Utah Division of Securities at (801) 530-6600.
- Bad Sales Practices
- Investors need to be critical of a Free Lunch Seminar. Essentially, the salesperson is paying for a captive audience where they can pitch prospective
investors. Investors, particularly seniors, should be wary of any Free Lunch Seminar pitch. Realize that fancy venues, a free meal, and a great
presentation do not make a sound or prudent investment. Many Free Lunch Seminars resort to bad sales practices, such as: misleading investors,
misrepresenting products, omitting material information, and harassing attendees after the event. Be aware that such sales practices often begin with
disturbing discussions about the volatility of the market and the product being sold is then presented as the solution.