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With the stock market and other investments under water, many investors who are looking to protect their nest eggs are being lured by con artists promoting low risk and high returns.
With the stock market and other investments under water, many investors who are looking to protect their nest eggs are being lured by con artists promoting low risk and high returns.
One of the favorite venues of these con artists is the free “educational” lunch seminar for which older investors are a prime target. According to statistics from AARP and the North American Securities Administrators Association, four out of five people over age 60 have gotten at least one invitation to a free lunch seminar over the past 3 years, and 60% have gotten six or more inviations.
If you accept an invite for a free lunch seminar, don’t expect to be educated. A recent sweep by state securities regulators, the SEC, and the Financial Industry Regulatory Authority found that 100% of the seminars were actually sales presentations and that half of them included exaggerated or misleading claims. One out of four recommended investments that could be unsuitable for those who attended.
AARP and the NASAA are helping investors fight back by providing a lunch-seminar checklist that can be used to determine whether a seminar adheres to guidelines set up by securities regulators. In addition to information about financial products presented at the seminar, the checklist asks whether presenters outlined both the advantages and disadvantages of the products being pitched, as well as the risks involved. The list also advises attendees to watch out for red-flag phrases like “you have to decide today” or “there’s a high rate of return.”