Long before Bernard Madoff was arrested and charged with securities fraud, many Americans would often be invited to free-lunch seminars to learn about investments. In some cases, those free-lunch seminars were legitimate. In other cases, the motives of those sponsoring such events might have been questionable.
As part of an effort to help investors distinguish the good from the not-so good free-lunch seminars, AARP, the North American Securities Administrators Association (NASAA), and the Financial Industry Regulator Authority (FINRA) recently joined forces to create an online resource. "Invitations to free-lunch seminars can be tempting," AARP and FINRA said in a release. "But before you accept, consider these key strategies. The strategies can be employed to counter persuasion techniques and distinguish potentially good from inappropriate offers or investments."

First, take your time.  Promise yourself before the seminar that you will not purchase anything or open an account on the spot.  Be aware that the presentation could be a "soft sell" and a "harder sell" could follow in a phone call or an in-home visit.
At the free lunch seminar, AARP and FINRA suggest asking these questions:

  • What are the risks of this investment?
  • How much does it cost initially to purchase the investment?
  • What, if any, additional or ongoing costs will I have to pay?
  • How liquid is this investment? If I need to sell or cash in the investment, how
    readily can I do so?
  • Will my investment be tied up? If so, for how long?
  • What happens if I decide to sell or cash in my investment? Are there surrender charges or other fees?
  • For what type of investor is this investment a good idea? For what type of investor is this investment a bad idea?
  • Is the investment registered? If so, with which regulator?
  • Will they give it to you in writing?

If the speaker can't or won't answer your questions to your satisfaction, the investment
is not right for you.
Learn more about how to protect yourself from inappropriate free-lunch seminars at these
Web sites: www.aarp.org/money/consumer/articles/_no_free_lunch.html and

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