The Bottom Line: Is an investment seminar really a free lunch?

If you're like most people nursing a retirement portfolio, you're on at least one invitation list for those educational investment seminars that come with free lunch, snacks or dinner. I’ve certainly received my share.

A few months ago I went to one of them, a free-dinner retirement planning seminar. The sponsoring firm was a tax attorney who specialized in retirement planning. He offered some great deals on tax filing for seniors ($39 or something for annual 1040s; likely the firm’s loss leader), and had a nice consulting practice based on self-directed retirement account investing (likely their highest margin service). Dinner was good, and I learned some new things, met some great people in the audience and gained some new sources for my Oregonian column. That experience was a good one for me.  

But while my experience went well, the U.S. government’s Securities and Exchange Commission says half of these types of seminars have some element of "exaggerated or misleading advertising claims." That’s according to a new Securities and Exchange Commission report referenced in RedwoodAge.com’s "Free Lunch" Scams Target Retirement Investors. 

"Unfortunately," reports the SEC's Office of Investor Education and Advocacy, too many investors go to these meetings and end up replacing "existing investments with investments that are unsuitable or have steep sales commissions, high surrender charges or tax consequences."

Before accepting a free lunch, I’d highly recommend doing what I did. Do a little research. Who's sponsoring the event? What products do they sell? Could these products have high commissions or other negative repercussions? What does your estate planner have to say about this strategy?

We all know that if it sounds too good to be true, it likely is. If you take the free lunch, don't also get taken to the cleaners.

		Jennifer D. Meacham, Gather Money Correspondent
	Jennifer's column, "The Bottom Line," is published every week to the Gather Essentials: Money channel. Jennifer covers money matters for RedwoodAge.com and self-directed retirement account investing for RISMedia. She's co-author of the best-selling retirement investing guide "IRA Wealth: Revolutionary IRA Strategies for Real Estate Investment" (Square One Publishers, New York). Keep up on the latest news and analysis into how you can take control of your business and personal financial future by joining Jennifer's "Self-Directed Investing 101" network.

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