By: Jack WaymirecloseAuthor: Jack Waymire Name: Jack Waymire
Email: jack@paladinregistry.com
Site: http://paladinregistry.com
About: Jack writes for the InvestorWatchdog website and Worth magazine. He worked in the financial services industry from 1976 to 2004. For twenty of those years he was the president of a Registered Investment Advisory firm and a Broker/Dealer. Jack is the author of Who's Watching Your Money? The 17 Paladin Principles for Selecting a Financial Advisor and is a co-founder of PaladinRegistry.com.See Authors Posts (87) | October 22, 2009 | Deceptive Sales Practices, Who Can I Trust?

One of the more deceptive sales tactics out there is the FREE LUNCH. Financial advisors invite investors to educational seminars that include a free lunch or dinner. This sounds benign enough, but it is a popular sales tactic that low quality financial advisors use to meet investors.

Advisors can’t sell you investment or insurance products until they meet you on the telephone or face-to-face. The latter strategy works the best because the advisors get maximum impact from their personalities and sales skills.

The SEC recently accused, Charles C. Slowey Jr. of bilking 90 elderly investors out of $12 million when he used free lunch seminars to lure them to invest. SEC Chairman, Mary Schapiro, said the alleged perpetrators of the fraud lured investors in with offers of free lunches to win their trust and sell them risky, unregistered securities that lost most of their value.

Many promoters also used scare tactics to get seniors to question their current investments, made claims of fantastic returns with no risk, and planted ringers in the audience who stood up and provided testimonials about the results they supposedly received.

Don’t be deceived by free lunches. There are no free lunches in the financial services industry.