Retirees usually realize themselves with considerable nest eggs, typically tons of thousands of bucks, but little experience in the way to derive required income from their cash piles. The alternatives seem limitless: mutual funds, dividend-paying stocks, municipal bonds, bond ladders, reverse mortgages... it's no surprise that inexperienced retirees flip to any supply of advice they can find.
Investment seminars are offered across North America, and they might seem sort of a sensible idea: free investment recommendation, with a free meal kicked in. Thousands of retirees attend such seminars each year and, to be fair, many organizations supply legitimate seminars that give sound investing advice. A lot of usually than not, but, a "seminar" may be a thinly disguised sales pitch for investment products that are expensive, risky, and not appropriate for retirees who need a secure way to squeeze income out of their savings.
Some seminars are by invitation solely, however several are open to the public; they're advertised as seminars that provide objective recommendation on attaining a secure retirement, financial planning, estate planning, and alternative broad topics of interest to retirees. Typically, a sense of urgency is implied within the advertising, with tag lines such as "restricted seating on the market" or "decision currently to reserve."
But, such seminars are typically staged by insurance or investment firms, and presented by brokers seeking sales commissions. Although most seminars do not build direct sales, attendees are encouraged to book follow-up meetings to open an account and invest in an expensive product like an indexed annuity. The presenter, rather than providing objective and reasoned recommendation, will make exaggerated and misleading claims regarding the merchandise that he or she is selling, promising unrealistic returns and guarantees. Many promise annual returns of 12 % or additional on an investment, which is merely unrealistic in these days's financial environment.
Typically, the investment products hawked by seminar presenters are unsuitable for many of the retirees attending; most retirees should invest conservatively, and many are risk averse to start with. Also, the annuity merchandise promoted at these seminars are illiquid: once purchased, they can not be converted back to cash while not paying substantial penalties. But, seminar presenters "advise" all attendees to buy the annuity or other product being hawked, no matter every individual's investment needs, aversion to risk, and liquidity needs. And a few seminar practices are simply fraudulent.
The foremost common product promoted at such seminars -- the indexed annuity -- is typically not suggested by legitimate monetary advisers. An indexed annuity may sound like a smart deal: when investing a sum of money, the investor is paid a come back that's pegged to a market index, like the Normal and Poor's five hundred Index, that tracks 500 commonly traded stocks. If the market goes up, your checks go up; if the market goes down, you are still paid a guaranteed minimum. However, there are various down sides. Your gains are typically capped yet, sometimes only 7 percent. Stock dividends, a large up-side during a volatile market, are usually not included in calculating gains. If you wish to withdraw your money, there is a considerable early withdrawal penalty, beginning as high as fifteen % of your investment; "early withdrawal" will be outlined as 10 to fifteen years. And, of course, getting an indexed annuity perpetually involves paying a large sales commission -- whi ch is why brokers posing as "monetary advisers" are thus wanting to sell them to you.
The Securities and Exchange Commission has investigated the practice of disguised sales pitches and brought cases against corporations engaged in fraudulent practice. Nevertheless, these seminars still be offered. If you have a substantial nest egg and are unsure of the most effective manner to speculate it, bear in mind that there is no such factor as a free lunch. Hire a legitimate financial advisor to look at your assets and your wants, and offer you real advice.
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