Beware of the Free Lunch Seminar
First… There is no free lunch. A phrase my father drummed into me when I was young. This was his attempt to make me be careful and watch out for things that sound too good to be true.
Now the free lunch seminars, for the most part, are put together by financial advisors, usually with the assistance of a representative of an annuity company or a mutual fund company. Assistance meaning, they pay some or all of the cost to host the lunch or dinner.
Historically, seminars have been a great way for financial advisors to obtain new clients. By sending out invitations or advertising their event, they obtain a captive audience to talk about a scenario that gets you thinking that you need a new type of product that can protect you from these scary times. Then BAM, magically they appear with this strategy that shows how this product fits the bill perfectly. Yes, most of these products are annuities.
Now if you know me at all, you’ll know that I’m an annuity hater. However, I do acknowledge that there are some circumstances where they fit a client’s needs, however they can be promoted as a product that fits every circumstance which they do not. I wrote an article called "Annuities, the Bad, the Worse & the Ugly" that has my thoughts on annuities. Click here to access.
Here are a few more titles to be aware of before you head to a seminar that you attend with the intention of increasing your knowledge:
Retirement Workshop
Retirement Income for Life
Anything that has the term “Guarantee”
So why am I so vocal about these seminars and the ultimate sale of a product? Well firstly, I feel that the titles are disingenuous by stating some of the titles above. I think they should be made to say, “I’m trying to sell you an annuity where I get paid up front”. Secondly, I have many clients that own these products and I get the pleasure to tell them actually what they own. In my experience, at least half of my clients were under the impression that they bought a product that is very different to what they thought they purchased.
So, what to do if you have an annuity? Well that’s a whole new story, however now you are in a battle against the insurance company to maximize your return. I argue that there is more management needed in an annuity than a general investment, however I have not experienced many clients that receive that assistance. If you have an annuity, send me a copy of the policy. I’ll review it for you and explain exactly what you have. In some instances, you may be stuck with them, but you need to maximize what you can get out of it without affecting any of the benefits you’ve already paid for.
I’ll finish the way I started. There’s no free lunch out there, stay informed and educated to make good decisions. If you have any questions please feel free to give me a call.
