Winner, winner chicken dinner!
One of the more popular prospecting strategies for financial advisers over the last couple of decades has been the dinner seminar. While its popularity has waned recently, with new marking strategies taking hold, there are still plenty of seminar dinners still taking place.
Here are a few things consumers might want to know before they sign up for a “free” night out.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The same script
Invitations to the seminar go out to many individuals in a certain geographic area. The invite is to learn more about a certain topic, usually ones involving some aspect of retirement. Popular topics include tax-reduction strategies, retirement income, Social Security planning and asset protection.
Once you arrive at the seminar for the night, the talk usually follows a certain path. There is a problem facing you as you get closer to retirement: Taxes, re-creating a paycheck, how to take Social Security and market volatility.
Then once the presenter spends time talking about the challenges and potentially scaring the audience, they offer solutions. How nice of them! It should be obvious, but the solution is usually something they are selling. They need to recoup their costs for all the steak dinners that you and everyone else around you just enjoyed. It makes sense, but there could be some issues.
To invest or not to invest
It’s important to know who these presenters work for. As a financial adviser there are tons of investment companies that knock on the door, send me emails and reach out through phone calls to discuss their investments. I have found that if the person represents a bond investment offering, they usually talk about how overpriced the market is and how it makes sense to increase “safe” investments. If the person represents a stock investment offering, then it seems like the market is just getting going and stocks are the place to be.
In other words, to a hammer salesman, everything starts to look like a nail.
Sorting the good apples from the bad
While there are many good advisers with extremely high ethical standards who use dinner seminars to find new clients, there are also many others with less than virtuous intentions who use them, too. Here are some ways to try to sort the good apples from the bad.
- Is the presenter a licensed financial adviser? If so, look them up on the SEC’s Investment Adviser Public Disclosure website or FINRA’s BrokerCheck.
- Do a Google search of the person and see if there are any skeletons hiding in the closet.
- Look up the company they represent and search them.
Anecdotally, there used to be many great financial advisers who used this dinner invitation system to get in front of people and find clients. Around 10 years ago it seems many advisers moved on from the strategy and went elsewhere for their marketing efforts.
In order to make these expensive presentations work from a profitable business model standpoint, these dinners can often be sales tools to sell high-commissioned products. Many presenters push products that maximize the YTB. That stands for Yield to Broker, which may not end with a good result for the client.
So, be cautious of a “Free Steak Dinner” offer. It could end up being one of the more expensive meals of your life!
The opinions expressed in this material do not necessarily reflect the views of LPL Financial. Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through SFG Wealth Management, a registered investment advisor. SFG Wealth Management and Synergy Financial Group are separate entities from LPL Financial.
-
Fall Is Tax Time? Yes! Act Now to Make Needed AdjustmentsReview your withholdings, contribute to tax-saving HSA and FSA accounts, manage a bonus' impact and adjust for major life events such as weddings and job changes.
-
Board Service in Retirement: The Best Time to Join a Board Is Before You RetireMany senior executives wait until retirement to take a seat on a corporate board. But making this career move early is a win-win for you and your current organization.
-
A Financial Professional's Take on Long-Term Care Insurance: Buy or Not?Unless you have about $6,000 burning a hole in your pocket every month, you should make a plan in case you need long-term care. Luckily, you have options.
-
How to Unearth Sustainable Investment in Mining: A Financial Professional's GuideMining is likely to play a critical role in the global transition to more environmentally friendly energy resources. Here's how you can balance the opportunities and the risks.
-
Don't Be a Sucker: The Truth About Guarantor and Cosigner AgreementsThere are significant financial and relationship risks involved if you agree to be a cosigner or guarantor. Make sure you perform your due diligence, and know exactly what you're getting into, before agreeing to such a commitment.
-
The Hidden Risk Lurking in Most Retirement Plans: Human BehaviorWhat's one of the differences between a good financial adviser and a great one? The ability to use behavioral coaching to guide clients away from emotional decision-making and toward retirement success.
-
Addressing Your Clients' Emotional Side: Communication Techniques for Financial AdvisersRather than focusing only on financial plans, you can better serve your clients — and grow your business — by learning what to say and do when a client gets anxious or emotional.
-
Seven Hidden Downsides of Dividend Investing, From a Financial AdviserDividend investing could be draining your wealth with unexpected costs and limited growth potential. Here are some downsides, along with smarter strategies to take control of your retirement income.
