Don’t Let “Free Lunch” Seminars Give You Financial Heartburn

Gerri Walsh
May 21, 2013
Don’t Let “Free Lunch” Seminars Give You Financial Heartburn

If you decide to attend a free-meal seminar, use these four tips to avoid financial heartburn. © rayner photographer limited

Have you ever been invited to a free seminar that promises to teach you about investing or managing money in retirement—and comes with a free meal? You’re not alone. Sixty-four percent of Americans age 40 and older have been invited to so-called "free lunch" seminars, according to a FINRA Investor Education Foundation survey.

A free meal might be enticing, but in many cases the goal of these seminars is to recruit new clients or sell products. Even when they're described as purely educational, free-meal seminars typically have one aim: to sell you something. That in itself can spell problems. Other times, problems can arise after the seminar—during follow-up contacts from the speaker or sponsor.

If you decide to attend a free-meal seminar, here are some tips to avoid financial heartburn:

• Find out who sponsors the event. Even if the people who host a seminar or speak at the event are industry experts, they might not be the ones actually paying for it. At times, insurance companies or mutual funds finance these seminars, expecting the speaker to drive sales of their products.

• Check the speaker and the product before the seminar. Verify the salesperson is licensed and the investment is registered. For brokers or investment advisers, use FINRA BrokerCheck. For an insurance agent, check with your state insurance department. You can find out whether a product is registered with the SEC by using the EDGAR database. Also call your state securities regulator to find out what they know about the company that issues the investment.

• Ask questions about the investment while you're there. What are the risks of this investment? How much does it cost initially to purchase the investment? For what type of investor is this investment a good idea? Where and how quickly can you sell the investment?

• Don't buy anything or open an account on the spot. The seminar might be intended just to introduce you to the product, with a hard sell later. After the event, do some research on your own. Understand the risks. While the prospect of high rates of return might sound tempting, remember there may be additional risks or costs associated with the product.

Be a savvy investor and refuse to be rushed. A good investment will be available tomorrow or next week or next month, when you are ready and understand where your money is going. To learn more about free lunch seminars, visit

Gerri Walsh is Senior Vice President of Investor Education at the Financial Industry Regulatory Authority (FINRA).

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