Financial seminars are a marketing tool often used by broker-dealers and other entities to attract prospective clients. These seminars may be invitation-only or they may be advertised in local papers or on the internet. Financial seminars are often held at hotels or restaurants and may offer enticements such as free meals, books, or trips for attendees. Unscrupulous investment seminar sponsors often target seniors. At these seminars, participants are provided with a sales pitch and sales materials that describe possible investment strategies. These seminars sometimes offer unsuitable sales of securities for attendees.
As many as half of these investment seminars contain misleading or exaggerated information, and many involve outright fraud. Investors should keep in mind that most seminars are designed to sell a product, even if they are billed as educational events. The speaker is often a paid spokesperson and not the actual sponsor. The presentation is often impressive but misleading. Seminars that urge investors to act quickly due to a limited supply should raise a red flag. Investors should never substitute information received from investment seminars for their own independent research. Investors should conduct thorough research before and after the seminar, ask pointed questions, and critically assess any information offered at the seminar.
For more information, see:
- Financial Industry Regulatory Authority (FINRA): https://www.finra.org/sites/default/files/2022-07/FINRA-Free-Lunch-Investment-Scams.pdf
- FINRA’s investor alert on “free lunch” investment seminars.
- Securities and Exchange Commission (SEC): http://www.sec.gov/spotlight/seniors/nofreelunch.pdf
- SEC’s warning to seniors about “free lunch” investment seminars.
- Securities and Exchange Commission (SEC): http://www.sec.gov/investor/alerts/tradingseminars.htm
- SEC overview of potentially fraudulent investment seminars.
[Last updated in June of 2023 by the Wex Definitions Team]
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