According to the Associated Press, "An investigation by federal and state regulators of "free lunch" investment seminars aimed at seniors has found high-pressure sales pitches masquerading as educational sessions, pervasive misleading claims for unsuitable financial products, and even fraud."
Senior citizens are big targets for investment fraud, and the free lunch seminars are very successful in attracting this sought after demographic. Among the findings of the regulators who conducted the investigation in seven states:
--The "educational sessions" advertised are generally little more than sales pitches, and attendees are often pushed to open accounts or buy products that day.
--Nearly 60% of the 110 investment firms and branch offices examined showed evidence of weak supervision of the employees running the seminars, including failure to review the seminar materials.
--About half of the seminars included false or misleading claims and 13% included what appeared to outright fraud.
--23% suggested investments that were unsuitable.
None of this is really that surprising. No one is going to buy you a nice lunch at an upscale country club unless there's something in it for them. And you certainly shouldn't expect unbiased investment wisdom with your complimentary fillet mignon. If you want an unbiased advice, seek the assistance of a fee-only financial adviser or read a book like Andrew Tobias's The Only Investment Guide You'll Ever Need or perhaps Why Smart People Do Stupid Things With Money.
And remember: there's no free lunch. Remind Grandpa, too.
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