Lots of sellers of products are trolling for new clients, new prospects and older investors with substantial assets. They use a proven technique that could trap your client.  You can educate your clients early and often about the technique, which is the “free meal educational seminar”.  These seminars are not, by themselves, a bad thing. Perhaps you’ve even put one on yourself, or considered doing so. But too many unethical people are using these to sell inappropriate investments to older people.  The annuity scams are notorious for this.

As people age, about a third of them will develop Alzheimer’s Disease. Most of the victims of this insidious disease are women.  When the earliest signs of the disease emerge, research tells us that impairment of financial judgment is already underway.  How does that affect you?
FINRA has issued an alert for investors about “free lunch” investment seminars and you can use that as a reason to contact all of your older clients now and warn them.  Here’s the gist of what FINRA wants seniors to know.
The FINRA Investor Education Foundation researched people over 40 to find out how many have been solicited with offers for a free meal seminar.  64 percent of respondents had been solicited, which means that the odds are, your clients will be among them. What the research also showed was that half of the sales materials contained claims that were apparently exaggerated, misleading or otherwise unwarranted. Would your elderly client, getting a modest return under your watchful guidance and adherence to his long time investment philosophy, be seduced by a slick invitation leading to a claim of high rates of return?  13 percent of these seminars appeared to involve fraud, such as unfounded projections of returns and sales of nonexistent products.
Slick and unscrupulous “advisors” and sellers have been at this for years, pitching unsuitable products. They’ve stepped up their game as the population ages. They want every target they can get.
What you can do to stop anyone else from stealing away your client with promises of a free “education” seminar with its pitch and possibly false promises is to educate your client yourself.
  1. First, warn them about the prevalence of these hard sell efforts disguised as a benevolent presentation to the public. These seminars are designed to sell, no matter who puts them on or where they are done.
  2. Second, help your client understand the intention:  They want the attendees contact information, and sometimes they ask for confidential financial information. They may well be targeting seniors so that with their contact information, the sellers can hound the seniors until they buy, even if it is not at the seminar itself.
  3. Third, teach your clients about the smooth and rehearsed presentation techniques the sellers use to get people to buy.  They promise phantom riches, “guaranteed” to produce certain income.  They try to create credibility by associating themselves with a reputable sounding firm.  They tell the seminar attendees that savvy investors have already purchased this particular product they’re pitching, and they often also use the “scarcity” technique that suggests there is a limited time to buy, a limited supply, or that this is a one-time only opportunity for a special, reduced price.
If you want to head off the efforts of those who are putting on seminars to get older clients in their grasp and possibly, away from you, be proactive.  We suggest that you create a brief informational packet to be given to all of your clients age 65 and up.  Give them the fine points of this article.  Help them make responsible choices and stay in communication with you about any seminars they want to attend.  By doing so, you can improve your chances of retaining your aging clients and protecting them from unwise financial choices.
Until next time,
Carolyn Rosenblatt, RN, Attorney and Dr. Mikol Davis, Psychologist,

 

 

Dr. Mikol Davis and Carolyn Rosenblatt, co-founders of AgingInvestor.com

Carolyn Rosenblatt, RN, Elder Law Attorney offers a wealth of experience with aging to help you create tools so you can skillfully manage your aging clients. You will understand your rights and theirs so you can stay safe and keep them safe too. Dr. Mikol Davis, Psychologist, Gerontologist offers depth of knowledge about diminished financial capacity in older adults to help you strategize best practices so you can protect your vulnerable aging clients. They are the authors of "Succeed With Senior Clients: A Financial Advisors Guide To Best Practice.AgingInvestors.com offers accredited cutting edge on-line continuing education courses for financial professionals wanting to expand their expertise in best practices for their aging clients. To learn more about our courses click HERE
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