We've all heard the phrase "there's no such thing as a free lunch." As more Missourians near retirement, it is worth remembering the truth and common sense contained in that old saying. In spite of this, offers of a "free lunch" or "free dinner" for attending a seminar on financial planning or reducing your taxes have become a popular marketing tool in the financial services industry. Unfortunately, con-artists can be among those offering these freebies to Missouri seniors and anyone else with savings or money to invest.
Be on guard for so-called financial "experts" who offer free meals for attending a seminar or workshop. Oftentimes, their presentations can look appealing, but lead investors to make ill-advised investment choices. These investment advisers may even offer to follow-up with a private financial planning session when they ask you to specify your assets and then provide misleading advice about how and where to invest your money.
Unfortunately, our office is seeing an increasing number of cases in which folks who attend these seminars sell off their sound investments in favor of new high-fee investments. In many cases, the investment advisers involved are not properly registered as investment advisers with the Missouri Securities Division.
The types of investments most commonly recommended at these free lunch events may sound attractive, but don't be fooled. Often, they'll recommend buying a variable annuity or equity-indexed annuity product. These complex investments may be appropriate for some investors, but for many people, especially older Missourians, they are not the best choice. Variable annuities and equity indexed annuities are complex and confusing investments for which the broker receives high commissions and fees, and the buyer's money is "locked up" for long periods, sometimes up to 10 years. Also, buyers may be charged high "surrender fees" if they try to access their money before the end of the lockup period.
Recently, the Missouri Securities Division issued two orders arising from "free lunch" investment seminars. Both cases involved Michael Glenn Grimes of St. Louis, Mo., and his employer Barrington Capital. Grimes, who was not registered with the Missouri Securities Division, was investigated for offering unsuitable financial advice during a seminar targeting retirement age investors entitled "More Money, Less Taxes".
Investors should watch out for seminars and investment advisers who make promises that seem too good to be true, because they usually are.
For more information regarding investments and fraud protection, or for information regarding a company or representative, I hope you will visit my website at www.sos.mo.gov/securities or call the toll-free investor hotline at 1-800-721-7996. |
