Plan For Retirement Safely

 The Securities and Exchange Commission provides a webpage with a lot of information to help Seniors invest their money wisely.  This web page has links to information about what questions to ask when considering investments and how to avoid internet scams and affinity fraud. In addition, they have published a pamphlet called "A Guide For Seniors: Protect Yourself Against Investment Fraud". 

 They have also created a brochure called "Early Retirement Seminars 101: Smart Tips for Spotting Retirement Scams", This pamphlet can help you to recognize fraudulent retirement pitches, that promise much more than they can deliver. For example, here are some common tactics used by scammers:

• the "scarcity tactic" - claiming there is only a limited supply left for an investment.
• the "reciprocity tactic" - offering to give you a discount on commission if you buy now.
• the "source credibility tactic" - the broker claims to be a reputable expert.
• the "social consensus tactic" - other savvy people have invested in this product.

Another useful resource is the investor bulletin, "Social Media and Investing - Tips for Seniors". This bulletin can help you avoid online investment fraud. Finally, be very wary of "free lunch" investment seminars. These lunch seminars are advertised as "educational", but they are really geared to sell you investments. You can read more about these "free lunch" sales seminars in a previous post here.

"Free Lunch" Sales Seminars

Many financial services firms are marketing to senior investors, who are a growing segment of investors. These firms have a sales technique - they offer free lunches to seniors, if they are willing to listen to their seminar information. The Securities and Exchange Commission (SEC) is concerned with unscrupulous and abusive sales practices of financial advisers who market to older adults. The Securities and Exchange Commission published a report in 2007 called "Protecting Senior Investors: Report of Examinations of Securities Firms providing "Free Lunch" Sales Seminars".

This report found that:

• Free Lunch Seminars are advertised as "educational", but they are really geared to sell investments.
• Attendees are not informed that the seminar is presented by a company that has a financial interest in selling these investments.
• 23% of the seminars had financial advisers who recommended investments which were not suitable for particular customers.
• 57% of the investigated seminars gave exaggerated or misleading claims about the investments.
• 13% of the investigated seminars were selling fraudulent investments.
  

The AARP has a "Free Lunch" Monitor program where volunteers attend many of the free lunch style seminars and report their experiences back to AARP. There is an AARP online discussion group which provides a place to exchange stories about these free lunch seminars, which is located here.

The AARP has a good article about spotting financial scams. This article stated the the following phrases are warning signs of a financial scam:

• "There's no risk".
• "Your profit is guaranteed."
• "The offer is only available today."

The AARP recommends that you take your time investigating an investment before committing to it. For more advice on what questions to ask at a free lunch seminar, please see the AARP article "Free Lunch Seminars: Questions to ask a Financial Professional."

How to find out more about a particular investment opportunity:

• You can find out whether the investment is registered by using the EDGAR database.
  
• You can find information about an investment firm or a broker by using the FINRA BrokerCheck.
  
• You can investigate investment adviser firms on the SEC website here.