Free Lunch Seminars
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. Attendees are often required to provide contact and financial information to register. After the seminar, participants receive a solicitation for a “free” consultation aimed at gathering more personal financial information.
Free Lunch Seminars advertise through radio, newspaper, and internet ads. Seminars are also offered by invitation, often sent through the mail, in hopes of attracting a particular type of customer, such as older adults.
Concerns
Targeting Older Adults
Many Free Lunch Seminars target older adults. These seminars are advertised with names like “Seniors Financial Survival Seminar” or “Senior Financial Safety Workshop” and offer free advice by experts who may claim to 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.
Selling Unsuitable Investments
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.
Bad Sales Practices
Investors need to be extremely cautious of attending of a Free Lunch Seminar. The registration process often involves disclosing personal financial information. At the seminar, essentially, the salesperson is paying for a captive audience where they can pitch prospective investors. Investors, particularly older adults, 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.
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Prepare Before Attending
Do your homework before the seminar
A legitimate securities salesperson must be properly licensed, and his or her firm must be registered with FINRA, the Securities and Exchange Commission, or a state securities regulator—depending on the type of business the firm conducts. Additionally, an insurance agent must be licensed by the state insurance commissioner where he or she does business.
Ask questions at the seminar
Don’t be satisfied with learning only what the speaker presentation is designed to communicate. Ask as many as questions as you need to understand the investment’s objectives, risks, fees/costs, etc. You should understand the product before you decide to make an investment purchase.
Before the seminar, commit to yourself to do more homework after the seminar
Don’t be lured to make your purchase decision on the spot. Whether the presentation uses a "soft sell" or “hard sell” approach take the time you need to analyze the advantages and disadvantages of the investment. Sponsors can create a sense of urgency and play on feelings of obligation to rush you on a decision.
Contact the Division with questions or concerns - 801-530-6600
